Congress Not in a Spending Mood as the Holidays Near

The nomination of Robert M. Gates to be defense secretary is one of the pressing issues facing the Senate this week.
The nomination of Robert M. Gates to be defense secretary is one of the pressing issues facing the Senate this week. (By Alex Wong -- Getty Images)
By Shailagh Murray
Tuesday, December 5, 2006

A pile of unfinished business awaits the Republican-led Congress when it returns today, and a pile of unfinished business is likely to remain when lawmakers adjourn for the year, presumably on Friday.

Lawmakers have all but given up on completing any of the nine remaining spending bills and will instead leave it to the new Democratic leaders to work out the new government spending levels when they take charge in January.

Republican leaders will try, however, to pass a package of tax breaks, including several provisions that have expired or are scheduled to die Dec. 31. The list includes a research-and-development credit that is popular with manufacturing companies, individual deductions that benefit parents of college students and teachers who spend their own money on classroom supplies, and a sales-tax deduction for people who reside in states with no income taxes.

One urgent task before the Senate this week is confirming President Bush's choice of Robert M. Gates as the new defense secretary. Gates, a former CIA director, would succeed Donald H. Rumsfeld, who resigned Nov. 8, the day after Republicans lost control of Congress. Senate Majority Leader Bill Frist (R-Tenn.) said he expects Gates to be approved no later than Friday.

Frist also announced yesterday that final House-Senate negotiations would begin immediately on the U.S.-India Civil Nuclear Cooperation bill, hailed as a cornerstone of a broader strategic initiative between the two countries. The bill would allow American companies to export nuclear technology, equipment and fuel to India, which is vastly expanding its nuclear energy program.

But the Senate version of the bill contains restrictions that reflect an unease among some lawmakers that the India agreement would weaken international nuclear nonproliferation rules. Secretary of State Condoleezza Rice has urged that the Senate language be removed, warning that it could jeopardize support for the bill by the Indian government. Supporters believe chances for passage would plummet in a Democratic-led Congress, with lawmakers likely to insist on tougher nonproliferation terms.

Republicans hope to deliver a long-promised expansion of domestic oil and gas drilling, and the House will attempt today to pass an offshore-drilling bill allowing limited increases in oil and gas production in the Gulf of Mexico. The House had sought new access to waters along the East and West coasts, but Senate Democratic Leader Harry M. Reid (Nev.) warned that Democrats will filibuster a final bill unless expansion is restricted to the relatively small slice of the eastern Gulf that the Senate bill identified.

The future of a Vietnam trade-liberalization bill looks bleak. One possibility is attaching it to the tax-break package, but that high-priority measure has become a magnet for all sorts of straggler provisions. One is a Frist favorite that would block a scheduled Jan. 1 reduction in Medicare physician payments.

Another is a Medicaid provision backed by a coalition of long-term health-care providers and state government officials. They want to force Bush to rescind an August order that would reduce the amount of Medicaid funding available to public hospitals and nursing homes. Currently, state governments can charge providers a 6 percent tax, which is matched by federal funds and then returned to hospitals and nursing homes as government payments. The administration said the federal matching grants were too costly and ordered the maximum tax cut in half. Congress had earlier rejected such a plan.

The Vietnam legislation, which would establish permanent normal trade relations with the Asian country, ran into unexpected trouble last month in the House from lawmakers concerned that it would further damage the U.S. textile industry. Frist said the Senate would consider the bill "if the House can act," but House leadership aides said yesterday that the bill is a long shot.

Democrats have lambasted the GOP Congress for months about its skimpy list of accomplishments this year, including its failure to complete work on most of the annual spending bills to operate the government. Just two of the 11 fiscal 2006 appropriation bills have been completed. The nine remaining measures would fund about $460 billion of government programs and have been hung up by internal Republican feuds, in addition to the usual partisan squabbling.

Incoming House Appropriations Chairman David R. Obey (D-Wis.) said that if Republicans, as expected, seek to pass a resolution that would continue current funding levels through Feb. 15, Democrats will face two choices. They may seek to pass the remaining bills when they take over in January -- a daunting exercise that would coincide with the writing of next year's budget -- or pass a long-term continuing funding resolution.

"Either of those scenarios would represent lousy outcomes, but they would have been made unavoidable by Republican inaction today," Obey said.

Staff writer Charles Babington contributed to this report.

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