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Congress Poised to Keep U.S. Government Operating With $1 Trillion Budget

The U.S. Senate is poised to complete congressional passage of a $1 trillion spending bill to avert a U.S. government shutdown as leaders reached a proposed agreement to prevent a payroll-tax cut from expiring.

The House voted 296-121 for the spending measure yesterday, sending it to the Senate. It would replace a stopgap plan that kept federal agencies operating through the work week. With much of the government closed for the weekend, agencies won’t be affected even though the Senate didn’t plan to complete work on the legislation until today, Majority Leader Harry Reid said on the eve of the planned vote.

Lawmakers hailed the budget plan as a rare bipartisan compromise on spending in a year otherwise dominated by partisan and inconclusive debates over the budget deficit.

“After weeks of arduous negotiations on this package with our Senate counterparts, we’ve struck a fair, bipartisan compromise,” House Appropriations Committee Chairman Hal Rogers, a Kentucky Republican, said. “No party got everything they wanted.”

The spending panel’s top Democrat endorsed the plan, calling it the sort of compromise demanded by divided government.

“It reflects the fact that neither party can pass this bill on its own in either the House or the Senate,” said Representative Norm Dicks, a Washington Democrat.

Eighty-six House Republicans voted against the bill; 149 Democrats supported it.

Funding Government Operations

At issue is a 1,200-page measure funding the day-to-day operations of hundreds of government programs across 10 Cabinet agencies. The bill had been snarled in a dispute over how to extend a payroll-tax cut into 2012 as well as expanded unemployment benefits, which also would expire at year’s end without further legislation.

Democratic and Republican leaders in the Senate said last night they had agreed in principle to a plan to extend the payroll tax cut through February.

“It’s an agreement I can recommend to my conference,” said Senate Minority Leader Mitch McConnell, a Kentucky Republican. He said the Senate plans to vote on the agreement, which also extends jobless benefits, this morning.

Last-Minute Changes

On the separate spending bill, lawmakers made some last- minute changes, including killing provisions targeting President Barack Obama’s Cuba policies. Republicans had included language blocking his decision to loosen restrictions on travel and sending money to the Communist country.

Florida Republicans such as Senator Marco Rubio blasted the decision, saying it would only shore up the Cuban government. “It limits access to hard currency to a really tyrannical regime,” said Rubio. Representative Mario Diaz-Balart said it would “sell out the long-suffering Cuban people to appease the ruthless Castro dictatorship.”

Representative Jose Serrano, a New York Democrat, said “the U.S. government should not be in the business of restricting travel to any country, no matter what the issues we have with their government.” He said, “It is surreal to think that five decades after he took power, Fidel Castro is still a driving force in our national conversation.”

1,200-Page Bill

Some House members complained Republicans gave them two days to review the 1,200-page bill and didn’t release more than 1,000 pages of additional explanatory documents until late in the week.

“Not one of us has read every page in this bill,” said Representative Steny Hoyer, the chamber’s second-ranking Democrat. Representative Jeff Flake, an Arizona Republican, said, “We’ll be discovering for months to come what’s actually in it.”

Though lawmakers were unable this year to cut entitlement programs or raise taxes to reduce the budget deficit, they agreed to cut the roughly 40 percent of the federal budget that must be approved each year by Congress.

“Make no mistake -- there are real cuts here,” said Representative Rosa DeLauro, the ranking Democrat on the appropriations subcommittee with jurisdiction over education, health care and labor programs.

Pell Grants

The bill cuts funding for Pell grants, which help 10 million Americans from low-income families attend college. Though the legislation maintains the current $5,550 maximum grant, it tightens eligibility standards by requiring recipients to have either a high-school diploma, GED or be homeschooled.

It cuts the maximum number of semesters students may receive grants to 12 from the current 18. Those changes may affect 250,000 Americans, according to a preliminary estimate by the American Council on Education, a Washington group that advocates for colleges and universities.

The bill also eliminates the six-month grace period students receive after they leave school during which they don’t have to pay interest on their student loans.

The administration’s Race to the Top program, which awards competitive grants to schools, would be reduced by 20 percent.

Foreign aid would decline, with the U.S. Agency for International Development’s budget cut by 17 percent, according to the Republicans’ summary. The Environmental Protection Agency would be cut by 3 percent, on top of reductions approved earlier this year. The Government Accountability Office, the investigative arm of Congress, would see a 6 percent reduction. The Internal Revenue Service would be cut by 2 percent.

Environmental Regulations

Democrats fended off a number of Republican initiatives, including proposals taking aim at environmental regulations and cutting federal funding for Planned Parenthood and NPR, the syndicator of public radio stations.

Republicans prevailed with language barring public funding of abortions in Washington, D.C. They also killed a Democratic proposal to increase the security fees charged to airline passengers. Airlines are charging more for checked baggage, Democrats complained, which was prompting more travelers to bring carry-on luggage and increasing the workload for the government’s security screeners.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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