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Slight Movement But No Resolution in Omnibus, Payroll Tax Fights

Let’s try to get our heads around what’s happening in the government shutdown/payroll tax cut/unemployment insurance Congressapalooza fight:

• The House seems prepared to move forward on their omnibus spending bill, passing it and throwing it in the Senate’s lap. However, they will need to pass it entirely with their own members, because Nancy Pelosi basically intimated she would whip Democrats against it. Because many conservatives want to fund the government at lower levels, this could cause problems for John Boehner.

• One way that the House plans to get around this is by turning it into a three-bill process. Conservatives really don’t like the $8.1 billion in emergency disaster funding included in the omnibus, above and beyond the spending cap agreed to in the debt limit deal. So that would get its own vote, which Boehner presumes Democrats would support. The rest of the package could garner more conservative support.

Here are some details in the bill:

A $233 million cut from Environmental Protection Agency almost perfectly matches a $237 million increase for the Indian Health Service. Room is made for new science investments in the Energy Department as well as the National Institutes of Health, which is promised $30.7 billion, an almost $300 million increase over current funding. And behind the spending freeze for education are multiple, often difficult choices for Democrats.

Pell Grants for low-income college students survive, for example, at the maximum award level of $5500 but also substantial reforms are written into the bill to come up with savings. Obama’s “Race to the Top” public school reform program is cut to $550 million, a 21 percent reduction from current funding and far below his request. But new flexibility is allowed for carrying out the initiative so that large metropolitan school districts can now compete on their own—without being subject to their state’s governor.

On balance domestic non-emergency discretionary spending would continue to fall even as the Pentagon ekes out a $5.1 billion increase, bringing its budget to $518.1 billion for 2012. And both here and in the case of the State department and foreign aid, the bill makes liberal use of about $126 billion in overseas contingency funds to pad security-related spending—also capped under the August accords.

This is one major reason why capping overseas contingency funding is not a “gimmick.” It’s being used as a slush fund.

• There are still plenty of unrelated riders in the conference report, including the rollback of new travel and remittance rules for Cuba. For that reason, the White House has said that the omnibus is unresolved, even though it came out of a bipartisan House-Senate process.

• Boehner’s way forward goes this way:

“There’s an easy way to untangle all of this,” Boehner said in introductory remarks. “First I think Democrats should join Republicans and sign the conference report [on appropriations legislation] to fund our government. House and Senate appropriators have done their jobs. There’s an agreement on a bill that would keep the government open. They’ve worked out all the details and shook hands, and the bill’s done. It’s bipartisan, it’s bicameral, Democrats and Republicans in the House and Senate are both ready to vote on this.” […]

“Similarly I think there’s an easy way to resolve our issues on the payroll tax cut bill. The Senate should proceed with an open process — allow amendments and work its will on the House-passed bill. If Senators have their voices heard in an open way, I think it would help us get to a resolution much more quickly.”

Boehner added that he would bring the House back into session to act on an amended version of the payroll tax cut bill. So that defuses the threat of jamming the Senate. But the Senate Democrats don’t want to use Boehner’s bill as a baseline; there’s too much in it to which they object.

• The Senate leadership has lowered their voices relative to yesterday, and the endgame appears to include a negotiation between Harry Reid and Mitch McConnell on some set of bills that could clear a filibuster and get the President’s signature, which the House would then pass in its own right.

However, the only outstanding feature of this is an actual way forward that meets those requirements. We’re still waiting on that.

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David Dayen

David Dayen