Panels drafting 'split-the-difference' budget package

The White House reacted coolly to a proposal from Democratic leaders to split the difference between their budget proposals, even as the House and Senate Appropriations committees began drawing up a spending outline based on a reduced $943.5 billion target.

Minus the fiscal 2008 Pentagon spending bill President Bush signed into law this week, Democratic leaders next month will put together an omnibus package consisting of 11 remaining spending bills totaling $484.2 billion.

That is $10.6 billion less than Democrats anticipated before Bush's veto threats forced them to reconsider, and they are aiming for enough moderate Republicans to tire of the fight in December to either persuade Bush to negotiate or override a veto.

Senate Majority Leader Harry Reid, D-Nev., said White House Chief of Staff Josh Bolten brushed off his offer to sit down and negotiate a compromise Thursday.

A spokesman for OMB Director Nussle said Democrats ought to pass the bills individually at "reasonable and responsible spending levels."

He took a shot at Reid's announcement of the plan in a briefing with reporters, arguing that the Democratic leadership "should concern itself less with capturing political news cycles and more on their fundamental responsibility to fund the federal government," said spokesman Sean Kevelighan.

Reid's comments came hours before the House attempted an override vote on the president's veto of the $150.7 billion Labor-HHS measure, appearing to undercut its chances even as House Appropriations Chairman David Obey, D-Wisc., was preparing for the debate.

A perturbed Obey declined to comment initially: "I'm not saying a word until after the override vote."

House leaders were also surprised by Reid's letting the plan slip.

"It was not a coordinated PR campaign," a senior Democratic aide said.

Before the vote but after the first round of media accounts came out, Obey put out a statement saying that if the veto is overridden "the best that could happen is we wind up splitting the difference with the president's wholly inadequate budget."

If Republicans do not support that idea and "continue to follow the president's budget priorities like lemmings, the result is likely to be even worse," Obey said.

Earlier in the day at a closed-door Democratic Caucus meeting, sources said Obey and Democratic leaders implored the rank-and-file to lobby Republican members of their delegations to back a compromise, as the alternative would be to go back down to the president's $932.8 billion budget, with earmarks eliminated.

The split-the-difference idea appears to be gaining traction among Senate Republicans, who from the start have appeared more amenable to compromise than their more militant House counterparts.

"We are exploring our options," said Senate Appropriations ranking member Thad Cochran, R-Miss., leaving a meeting with Senate Minority Leader Mitch McConnell, R-Ky., Thursday night.

"I think the president is quite serious about his number," McConnell had told reporters earlier, but Cochran said it was his impression upon leaving the meeting that McConnell would take up the issue with the White House.

House Appropriations ranking member Jerry Lewis, R-Calif., who thus far has sided with Bush in voting against most of the spending bills, also said "I think we'll be back to the negotiating table" after the Labor-HHS override vote. The override attempt failed, 277-141.

Under new proposed subcommittee allocations distributed Thursday and obtained by CongressDaily, the individual spending bills would share the pain differently. On the Democrats' signature bill, the new Labor-HHS spending allocation would be almost $147.2 billion, about $3.5 billion less than in its current form -- but still much closer to its original allocation than Bush's budget request of $140.9 billion.

The new allocation is 2.4 percent below the original but about a 1.8 percent boost above current Labor-HHS spending -- not enough to keep up with inflation, demonstrating how steeply Bush's proposed cuts would hit.

Some House Republicans such as Rep. Tom Latham, R-Iowa, had even opposed the initial conference report because it had cut $1 billion from the original House version this summer.

He said he did not like the bill's reductions to low-income home energy assistance while boosting earmarks by about 1,000 from the original version. For Republicans like Latham, the new Democratic plan could be far more palatable than cutting all the way down to Bush's bill.

While most of the subcommittees would see cuts of between 2 percent and 3 percent below original spending allocations, as expected, Military Construction-VA spending would be reduced less sharply.

The new allocation would be $64.2 billion, about $500 million less than the original, or less than a 1 percent cut -- more likely to be felt in the military facilities accounts than veterans' benefits, which are considered sacrosanct.

Another subcommittee where the pain would not be felt as much as others is the Legislative Branch panel, which funds Congress' own operations, which faces about a 0.1 percent cut from the original House-passed version.

State-Foreign Operations, an area important to Bush, would be cut 2.5 percent from the House and Senate-passed versions to $33.9 billion.

That is a $2.1 billion boost above last year but $1.5 billion less than Bush wants.

The GOP-controlled Congress would regularly propose steeper cuts to Bush's foreign aid requests than the Democrats.

Meanwhile, another December battle was shaping up over bridge funding for military operations in Iraq, as the core Defense bill can only sustain the war until about March. Congress generally does not enact a supplemental until the spring, however, and the $50 billion measure headed for a Senate vote as early as Friday does not appear to have the votes for passage.

Many Republicans will not support the bill's conditions, such as a timeline for withdrawal by Dec. 15, 2008, rest and training requirements and stricter anti-torture safeguards.

But nor is a "clean" bill providing $70 billion for the war to be offered by Republicans likely to pass.

Senate Defense Appropriations Subcommittee ranking member Ted Stevens, R-Alaska, who drafted the GOP alternative, said it was not a matter of being for or against the war but rather about keeping troops supplied with food and body armor.

"These people who are in the field now have to know we will not break faith with them," said the octogenarian, who was a pilot in World War II.

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