How Congress could risk a government shutdown over clean-energy loans

(AP) House Republicans are demanding spending cuts for Hurricane Irene relief, proposing a $1.5 billion cut to clean-energy loans in exchange for $3.5 billion emergency disaster relief in its stopgap budget. Democrats aren’t happy about the offset — or any offset at all, in fact. Traditionally, disaster aid has not been offset in the budget, and they worry about setting a new precedent. So last week, Senate Democrats passed a $6.9 billion bill to provide relief without strings attached. All this sets up confrontation between the House GOP and the Senate Dems that could balloon into another government shutdown fight.

In a meeting with reporters today, House Democratic minority whip Steny Hoyer reiterated Democratic opposition to the House GOP’s offset for emergency disaster aid, which targets a Bush-created program that offers loans to auto companies for developing electric cars and other fuel-efficiency innovations. Hoyer defended the program as a job-creator, claiming the GOP’s proposed cut was a “mistake” that would put 30,000 to 50,000 jobs at risk. “Democrats will be loathe to support that effort...We need to pass the CR, but we don’t need to do it in this manner,” he said.

But Hoyer demurred when pressed to answer how many House Democrats would vote against the CR because of the offset. “Democrats have not yet made a decision about what to do about this,” he admitted. In fact, some leading House Democrats, including Rep. Norm Dicks, the ranking Democratic member on the Appropriations Committee, have already pledged to swallow the cut to clean energy in the name of passing the stopgap budget. As such, both the House and Senate leadership expect the House CR to pass tomorrow. And Hoyer suggested that the onus would be on Senate Democrats to go to the mat over offsets. “We’ll see what the Senate does,” he concluded.

In fact, Senate Majority Leader Harry Reid announced this morning that he plans to amend the House CR “with the language of the Senate FEMA legislation,” as he said in remarks this morning. In addition to the offset, there’s a funding difference of $3.4 billion between the House and Senate bills. Reid promised that small group of Republicans from disaster-afflicted states who crossed party lines to support the Senate disaster aid bill would support the amended bill as well. And if he does manage to hold onto most of those eight Senate Republicans, that sets up a showdown with the House Republicans that could run up against the Sept. 30 deadline, when government funding expires.

House Majority Leader Eric Cantor and Majority Whip Kevin McCarthy vowed that the Senate’s disaster aid requirements wouldn’t have a chance of passing the House. Both accused Reid of playing politics and holding up vital disaster aid funds if he follows through as promised in amending the House disaster aid provisions to match the Senate’s. “I don’t see the votes on the House floor for it,” said McCarthy, adding that “it’s shame on him” if Reid proceeds as promised. “It will be on Leader Reid’s shoulders,” Cantor concluded.

Democrats, for their part, could have a tough time if they’re forced to defend the spending that’s being cut in the House GOP’s offset. The money goes to clean-energy loans that at least one House Republican has described as government support for “other Solyndras,” referencing the scandal-tainted firm that received stimulus funds. They may, instead, push the question of funding levels, saying that the House’s $3.5 billion aid package isn’t enough. Reid suggested as much today, emphasizing that “FEMA is quickly running out of money to help American families and communities recover.”

Whether there’s a real shutdown threat will ultimately depend on how long this potential disaster aid fight will drag out. Both the Senate and House will be in recess next week — when Sept. 30 hits — which means there will be a lot of pressure for legislators to resolve their differences by Friday. If the fight spills over into next week, neither Cantor nor McCarthy would say whether they would call the House back into session to vote on an amended bill from the Senate. But the Republican leaders insist that they’re not trying to obstruct the legislative process. “No one’s intending to bring about a government shutdown here,” Cantor says.