Congress left with few easy paths on spending bills

After the November elections, Democrats promised to restore order to a budget process many had thought broken down.

After they took power in January, Democrats pushed through nine spending bills from the previous year that Republicans had failed to pass; passed a budget resolution for the next fiscal year that Congress had failed to pass in three out of the last five years, and said they would move 12 new spending bills for fiscal 2008 individually and on time.

The last part of that equation is highly unlikely. The end of the fiscal year is less than three months away, and most government agencies are likely going to have to operate on stopgap appropriations well into the winter if current trends hold up.

The backlog of work remaining -- the House still must pass six spending bills, the Senate has all 12 to go -- summons up visions of the dreaded "O" word that many in both parties had vowed never again to utter.

"Massive, massive omnibus appropriations bill, with both sides giving a little, everybody unhappy, everybody blaming the other," is the result one former veteran appropriations aide predicted. "I think it's just written on the wall like the Ten Commandments -- thou shalt wait until the end of the year, thou shalt wrap everything up in one big ball, thou shalt pass it, then complain about it."

President Bush is threatening to veto every spending bill except for the Military Construction-Veterans Affairs bill -- which provides generous increases in health benefits for veterans -- and the Legislative Branch measure.

The biggest reason is spending levels -- Democrats want to provide about $23 billion more than Bush wants overall, while shifting another $3.5 billion from the Pentagon budget to domestic programs. But there are also contentious policy differences, such as abortion rights and sanctions against Cuba.

In his Saturday radio address, Bush chided Democrats for spending too much money and for delaying the process.

"No nation has ever taxed and spent its way to prosperity. And I have made it clear that I will veto any attempt to take America down this road," Bush said.

"Democrats in Congress are also behind schedule passing the individual spending bills needed to keep the federal government running," he added. "By failing to do the important work necessary to pass these important bills by the end of the fiscal year, Democrats are failing in their responsibility to make tough decisions and spend the people's money wisely."

Iraq will also dominate attention this fall, as it did this spring. Protracted negotiations are likely that could divert attention away from the other fiscal 2008 spending bills and, as in the spring debate, Iraq might serve as leverage for both Congress and the White House on domestic spending.

"I think Iraq's going to be pretty contentious this year the second time around. I don't expect to see the Democrats walk off the field this time. I think that gives you a reservoir of ill-feeling that will then carry over into solving the rest of the stuff," said the former appropriations aide, who is now in the private sector.

There are really only four options: Negotiation, an omnibus bill so big the president could not sustain a veto, government shutdown, or another long-term continuing resolution like the one Democrats passed this year.

The last option is attractive to the White House, as a CR gives the administration broad latitude to decide how taxpayer money is spent.

Conservatives also like the idea, as it would spend money at current-year levels, rather than with the roughly $83 billion, or 9.5 percent, increase Democrats would provide for fiscal 2008.

A CR would also be bereft of earmarks, the local projects that garner the most attention in the spending process -- although even in their highwater mark of fiscal 2006, according to Citizens Against Government Waste, the $29 billion in total earmarks amounted to 1 percent of the overall $2.7 trillion federal budget.

But Democrats are not about to flatline spending -- or zero out earmarks -- this time around. "There's not going to be a CR. That's not going to happen," said Senate Labor-Health and Human Services Appropriations Subcommittee Chairman Tom Harkin, D-Iowa, who is seeking roughly $12 billion more than the president wants for programs within his jurisdiction. That would be about $9 billion over the current year, a 6.2 percent boost commensurate with the bill the House Appropriations Committee is taking up Wednesday.

Although Democrats are vowing to avoid a CR, the omnibus option is also highly unattractive to both sides.

After the last massive spending measure in fiscal 2005, the practice was intensely derided because members had too little time to read it, the bill was stuffed with earmarks that had not been debated in either chamber, and mischief worked its way in -- such as a poorly worded provision that would have allowed lawmakers and staff to inspect IRS tax-return facilities.

That was caught at the last minute, but to critics it represented how badly the process had gotten out of whack.

Last year, Senate conservatives blocked even the popular and relatively earmark-free Military Construction-VA spending bill from going to conference, fearing it would become the vehicle for an omnibus.

They are threatening similar procedural tactics this year. "Senate conservatives will be very hesitant to allow an omnibus to go through," a Senate Republican aide said.

Then there is the government shutdown option, which both sides agree would be catastrophic. Republicans were pilloried for forcing that outcome in 1995-6, which boosted then-President Bill Clinton's approval ratings.

"The group that took the biggest hit on that was the Congress," said Bill Hoagland, a longtime GOP budget aide who was most recently an adviser for former Senate Majority Leader Bill Frist, R-Tenn. "I think it was a black mark on government in general one year out from the elections. I think it would not behoove any elected official, whether Republican or Democrat, to wish that on anybody."

Office of Management and Budget Director Portman, who is leaving his post at the end of this month, echoed that sentiment recently, telling reporters that the White House does not want to see "a paralysis of the appropriations process."

But Portman's would-be successor, former House Budget Chairman Jim Nussle, R-Iowa, is facing an uphill struggle to be confirmed by Democrats, who think he is highly confrontational and will be unwilling to negotiate.

"Going from Portman to Nussle is the equivalent of going from an elegant character like the Speed Racer to the caveman from GEICO [insurance]," joked one lobbyist.

Even praise from Democrats like House Budget Chairman John Spratt, D-S.C., who said Nussle was "fair and honorable" while chairman, was not overly laudatory.

"It was positive, but positive the way you talk about your mother-in-law," the lobbyist said.

What happens with Nussle is yet to be determined. In the interim, Democrats are trying to demonstrate to enough Republicans that their spending bills are worthy of support. Indeed, in the House they have come close to veto-proof majorities on two bills -- the Homeland Security and Interior-Environment measures.

It takes 146 votes to sustain a veto; 150 Republicans voted against the Homeland Security measure and 155 voted against the Interior-Environment bill. The bills would spend a combined $4 billion above the president's request.

A senior House Democratic aide said those were almost like free votes because neither bill will be sent to the president's desk until the Senate passes its versions and conference committees meet to hammer out final agreements.

"Once we start getting into real numbers and real bills and it's moving closer to the end, I don't know that you can hold 147 Republicans on it no dime over the number," the aide said.

House Appropriations Chairman David Obey, D-Wis., knows he will need more GOP support in the end. While a feisty partisan who often raises his voice in anger at the other side of the aisle -- and even his own at times -- Obey said he is trying not to pick fights and instead wants to focus on the substance of his bills.

"Believe it or not, there are some major changes that are occurring in the policy of these bills. In the environmental area we've had a major thrust on global warming, in the [Commerce-Justice-Science] bill we will have a major policy difference from the administration on law enforcement, in the Labor-HHS bill we are certainly going to have a different set of priorities from the president on education and health care, so there are big policy differences," Obey said.

"The way we put together the Labor-HHS bill in a bipartisan way, I'm trying to give Republicans opportunity to stay on board, and obviously there are people who are trying to prevent them from getting on board," he said.

Obey will have a busy week, marking up the Transportation-HUD and Labor-HHS bills Wednesday, while considering the Commerce-Justice-Science measure and earmarks in the Energy and Water bill Thursday.

Defense and Agriculture subcommittees also might move their bills, although that had not been decided late last week.

The Senate Appropriations Committee has picked up the pace, voting out eight of the 12 bills and considering two more this week -- the Financial Services and Transportation-HUD bills -- and is on pace to complete them all by the August recess.

The House is on track to pass all 12 bills by that time, but Senate floor time is uncertain. Senate Majority Leader Harry Reid, D-Nev., has not committed any time this month to appropriations, although it is possible one or two non-controversial bills could sneak through, like the Military Construction-VA or Legislative Branch measures.

A Reid spokesman said that this month the floor will be crowded with the defense authorization bill, which will take two weeks, and possibly reauthorization of the State Children's Health Insurance Program, also contentious.

As for the rest of the year, appropriations "will depend on getting bipartisan cooperation from the Republicans," he said.

Many Republicans, for their part, see little reason to cooperate, given the way Democrats hammered them last year for not getting their work done and because of the lengthy lists of earmarks in the Senate bills.

"Obey will pass all the bills eventually, and then do we have a conference? That's a good question. We don't know today if the Senate's going to pass appropriations bills, and if they don't, then Obey loses out on what he wants to do and that's have all the bills finished individually by the end of September," said House Defense Appropriations Subcommittee ranking member C.W. (Bill) Young, R-Fla., who was full committee chairman for six years.

The last time all the bills were passed individually and on time was 1994, when Obey and Senate Appropriations Chairman Robert Byrd, D-W.Va., were last chairmen.

"It's a big challenge. See the last time Obey was chairman, he had about a 60-vote majority. Today he doesn't have that," Young added.

Harkin said he believed in the end, both sides would get down to serious negotiations. "We're always willing to compromise, that's the art of getting things done. There may be compromises that can be made with the president, we'll do what we have to do," Harkin said. "I assume at some point we'll start compromising -- but not now. They always say, a good lawyer doesn't compromise until the courthouse steps."

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