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Tax deal and spending plan face a hectic finish for Congress

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President Barack Obama says a deal he has struck with congressional Republicans on renewing Bush era tax cuts keeps his 2008 promise to protect the American middle class from an increase in tax rates.

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Washington Post Staff Writer
Wednesday, December 8, 2010; 12:14 AM

With a massive bipartisan tax-cut package edging closer to final agreement, Congress now will attempt to pass two major items before the end of the year: a $1.1 trillion bill to keep the government running and a nuclear arms treaty.

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Both will be difficult to achieve before the end of next week, when congressional leaders plan to go home.

Senate Democrats are planning to put the 12 spending measures that fund the government into one giant bill, a different approach from their House counterparts and one that Republicans oppose. They also plan to bring the New START agreement to a vote even though some leading Republicans in the Senate want to push it into next year.

Republicans vowed Tuesday to oppose efforts to package the dozen spending bills into one. But Senate Democrats are moving ahead with such a proposal and House Democrats expect to pass an alternative spending plan by Wednesday that could add billions of dollars to key programs.

Getting down to basics

"That's complete denial of the message of the last election," Sen. John McCain (R-Ariz.) told reporters, saying he was "absolutely opposed" to a "pork-barrel" bill that led to large increases in federal spending.

Instead of a comprehensive bill, Republicans prefer a stopgap measure that would keep funding level, or even decrease it, through September. They are hoping that President Obama - who declared "an end to the old way of doing business" when he reluctantly signed a similar 2009 omnibus spending bill just two months into his presidency - will urge Democrats to strip down the legislation to the most basic levels.

Some Republicans, including Sen. Jon Kyl (Ariz.), their No. 2 leader, have suggested that the vote on New START wait until next year. But Democrats said they believe the bipartisan deal on taxes would leave enough time to approve the arms treaty with Russia next week.

Senate Democrats also will hold test votes Wednesday on several favored items that are expected to fail, including legislation that would help children of illegal immigrants and a cost-of-living adjustment for Social Security beneficiaries.

Increasingly in doubt is legislation that would repeal the military's "don't ask, don't tell" policy that prohibits gays from serving openly.

The annual end-of-year crush is standard fare inside the Capitol, with the government spending bill almost always one of the final measures to be considered.

What makes this year's logjam different is that not a single one of the 12 appropriations bills that fund the government has been approved. They are supposed to be passed individually and signed into law by Sept. 30, but political pressures from a public that grew skeptical of government spending led Democrats to set them aside until after the November elections.

Republicans did a similar thing in 2006, when they were kicked out of the majority. They bypassed the appropriations process altogether, passing a so-called continuing resolution that kept government funding mostly at the previous year's levels.

Now, Senate Democrats find themselves orchestrating a complicated maneuver in a difficult effort to approve all 12 bills in one swoop.

Rather than passing that massive legislation, House Majority Leader Steny H. Hoyer (D-Md.) told reporters that the House will take up a stopgap measure Wednesday, which would continue funding for most federal agencies at 2010 levels.

However, Democratic and Republican aides said that there will be additional "anomaly" spending items attached to that resolution. Those could include funding for such things as implementing portions of the Wall Street overhaul earlier this year and a national broadband program that was started in the stimulus program approved in early 2009.

As of late Tuesday, the Congressional Budget Office still was estimating the cost of the legislation.

Debate on pricey add-ons

One outstanding issue is what to do about building a second engine for the Joint Strike Fighter. The engine dispute has turned into a heated lobbying battle between Pratt & Whitney, which is constructing the first engine for the Pentagon jet, and General Electric and Rolls-Royce, which are building the second one.

Despite objections from Defense Secretary Robert M. Gates, who views the second engine as wasteful spending, a bipartisan collection of lawmakers has kept it alive. Supporters read the language stating that programs shall be continued at 2010 levels to suggest that the second engine, which received $465 million last fiscal year, should continue in production.

Sen. John Thune (S.D.), a potential GOP presidential candidate, criticized this approach and instead called for a "clean" stopgap bill without the add-ons. He said the spending legislation must recognize that "we get our fiscal house in order."

House Democratic leaders think they have the votes to send their spending plan to the Senate with the tacked-on items.

Once that happens, Sen. Daniel Inouye (D-Hawaii), chairman of the Appropriations Committee, plans to swap in the legislation that combines all 12 spending bills. It also would include thousands of line-item measures, known as earmarks, that Republicans have vowed to eliminate next year because they think they are wasteful spending often inserted by a single lawmaker.

Several Senate Democrats declared their opposition to earmarks last week, so Inouye needs to find a handful of votes from Republicans. The likeliest targets are retiring GOP senators who might see this legislation as their last chance to deliver for their states.

If those votes do not materialize, the Senate is expected to take up the House version of the spending bill, but not without a battle.



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