In switch, Senate to move first on omnibus spending bill

In an effort to jump-start the stalled omnibus fiscal 2008 appropriations bill, the Senate will move first, perhaps as early as Thursday, on what Democrats had been putting together for several weeks -- a roughly $523 billion bill funding 15 Cabinet agencies, some interim financing for the Pentagon and other emergency needs.

The House had been planning to consider the bill as early as Tuesday. House Appropriations Chairman David Obey, D-Wisc., abruptly scrapped that plan after the White House issued a veto threat over the weekend arguing the measure would spend $18 billion more than President Bush requested.

Obey was still smarting Tuesday, and wants to just trim spending back to Bush's $933 billion overall limit while eliminating all home-state projects.

Senate leaders see the current plan as the best way to get the process moving and make the original bill a vehicle for further negotiations.

Senate Minority Leader Mitch McConnell, R-Ky., intends to offer one amendment for an across-the-board cut to get back to Bush's levels, and another to provide a total of $70 billion for the wars in Iraq and Afghanistan.

That would be a more judicious way to handle cutting the bills back down to the president's budget caps from $944 billion, an aide said, which was the previous spending target to which House-Senate Democrats had agreed.

Obey would prefer his plan, which would drop all war spending. "I am perfectly willing to lose every dollar on the domestic side of the ledger in order to avoid giving them money for the war without conditions. That's my personal opinion; that doesn't mean that's what we produce," Obey said.

The situation is still at an impasse, but several sources indicated there is potential for agreement at a budget cap that adds between $7 billion and $9 billion to Bush's budget and drops policy riders Republicans oppose.

The change in Senate strategy came after Obey's plan fell flat in the Senate.

"I just don't think that's a good outcome," Kent Conrad, D-N.D., said after the Democrats' weekly policy luncheon.

Commerce-Justice-Science Appropriations Subcommittee Chairwoman Barbara Mikulski, D-Md., was even more unequivocal: "I don't like it. It removes our Democratic priorities."

Majority Leader Harry Reid, D-Nev., who discussed the matter with Obey Monday and appeared initially receptive to it, seemed to backpedal Tuesday.

"Anything that Dave Obey says I'm happy to listen to," Reid said, adding that he thought Obey was "sending a message to everyone that the legislation to get things done takes cooperation from both sides."

But, underscoring his views as a longtime appropriator, Reid noted that "I think that I have as much right -- in fact, far more, because I know more -- than [OMB Director] Jim Nussle has to determine what money should be spent in the state of Nevada."

Another longtime appropriator, House Speaker Nancy Pelosi, D-Calif., indicated greater willingness to go along with Obey's plan. "I think it's great," she said as she walked into a meeting with Reid.

For his part, Obey appeared to see the writing on the wall. "I can tell you when bills will move and I can tell you when the Senate will sell us out," he said. "You know what I mean."

In the meantime, Obey has directed his subcommittee chairmen to find cuts within their jurisdictions, sources said, instructing them to find significant savings in a handful of areas rather than small nicks here and there.

McConnell, fearful that GOP earmarks and other priorities are on the chopping block, is countering with his own plan to impose across-the-board cuts of what could be around 2.5 percent to all non-defense programs. "It ought to pass 100 to nothing," McConnell said.

His move to preserve earmarks has only emboldened House Democrats who think it would be a good move politically to cut earmarks altogether for the second year in a row.

McConnell tried to sell Reid on his plan, which would still preserve emergency funds for border security, foreign aid, wildfires and other popular items.

Democrats dislike the idea of across-the-board cuts.

"I hope we don't have to do that. I think it would be extremely difficult for government agencies, including the FBI, and others, to do their job with these cuts," Reid said. Such cuts fall heavily on administrative accounts, such as salaries and expenses, that are smaller but crucial to agency management.

House Minority Leader John Boehner, D-Ohio, regarded as Bush's strongest advocate for keeping spending limits at $933 billion, said he would be willing to accept some emergency funds outside of war-spending, including for border security.

Democrats interpret that as wiggle room, particularly if they agree to drop some policy riders.

Mikulski said the impact of reducing spending bills to the president's budget could be felt in the Commerce-Justice-State measure.

Democrats had committed to reducing the measure by about $1.4 billion from an initially agreed-to $54 billion; Bush's budget would require another $1.4 billion in cuts.

That could force the FBI to choose between counterterrorism and law-enforcement tasks, and the DEA to choose between fighting Taliban drug-running and the proliferation of drugs at home, for example. "Frustration is at a high level," Mikulski said.

Senate Appropriations ranking member Thad Cochran, R-Miss., an early advocate for the split-the-difference approach, declined to criticize Obey's or McConnell's plan.

"Anybody who has a proposal has a right to have it considered," he said.