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Congress passes spending package, but bigger money issues still loom

By David Lightman And William Douglas, McClatchy Newspapers

WASHINGTON — The House of Representatives on Friday approved a $915 billion spending package that will keep the government running through Sept. 30, but a separate agreement aimed at avoiding a Social Security payroll tax increase Jan. 1 remained elusive.

The Senate is expected to approve the spending plan as soon as Saturday.
Without congressional action, many government agencies would run out of money as of midnight Friday, but any closings would be avoided as long as the plan is passed this weekend.

But Republicans and Democrats remained at odds over how to overcome differences on three other money issues.

The Social Security tax paid by employees, now 4.2 percent, is scheduled to revert to its 2010 level of 6.2 percent on Jan. 1. Also due next month: A 27.4 percent cut in Medicare payments to physicians and a cutoff of unemployment benefits to long-term jobless workers.

Congressional leaders continued negotiating Friday and remained optimistic that a deal would be reached.

In the meantime, there was little rancor over the spending plan, which was passed by a 296-121 vote.

“This bill has been worked on carefully,” said House Minority Whip Steny Hoyer, D-Md., who called it a “positive step for our country.”

“This is a good bill,” added Rep. Tom Cole, R-Okla.

There was, nonetheless, some sharp rhetoric.

House Minority Leader Nancy Pelosi, D-Calif., blasted Republicans.

“And now, by again taking this up to the last minute, it is up against the wall, but the timing is theirs,” Pelosi said. “We do not want to shut down government. … I think this is a made-up crisis by the Republicans. This could have all been done a long time ago.”

The legislation is significant because it affects a wide range of federal programs and incorporates many of the cuts lawmakers agreed to earlier this year.

The Department of Homeland Security, for instance, will get $39.6 billion from the bill, $2 billion less than last year and $4 billion less than President Barack Obama’s request.

Among the cuts are Federal Emergency Management Agency grants to first responders. The money was cut by $1 billion to $2.4 billion.

In addition, the measure bars money to transfer, release or assist in the transfer or release of Guantanamo Bay detainees “to or within the United States or its territories.”

Also cut were a number of labor and health and human services programs.

The Employment Training Administration will get $10.7 billion, $68 million below last year’s amount and $118.9 million less than Obama sought. The low-income energy assistance program, which helps poor people pay their utility bills, is due for $3.5 billion, $1.2 billion less than last year.

But several programs will see increases, notably defense, up $5.1 billion to $518.1 billion, including a 1.6 percent military pay raise and more money for health programs for troops and their families.

On the domestic front, special education funding and education grants to local school districts to help children with reading and math will go up slightly.

A separate measure will provide $6.4 billion for the FEMA Disaster Relief Fund, funded by an across-the-board 1.83 percent cut to certain programs.

The mood was one almost of resignation Friday toward the budget package.
“These grants cuts will require states and communities to delay or abandon vital preparedness efforts; we simply have to do better next year,” said Rep. David Price, D-N.C., of the homeland security cuts.

But, he added: “While this is an imperfect bill, under the circumstances we know it could have been much worse. It’s the product of bicameral and bipartisan decisions about how best to allocate scarce resources.”

Attention now turns to what’s likely to be the final congressional struggle of this already-contentious year, a struggle involving these issues:

KEYSTONE PIPELINE: House Republicans added to their package expedited review of the 1,700-mile project, designed to bring oil from oil sands in Canada to the U.S. Gulf Coast. The Obama administration delayed a final decision until 2013.

Environmentalists howled at the House effort, saying extracting and producing the oil produces more greenhouse gases than conventional oil. The dispute over the pipeline appeared to be the biggest obstacle to reaching an overall agreement.

SOCIAL SECURITY TAX: Without any congressional action, workers would pay 6.2 percent next year on the first $110,100 of wages. The agreement keeps the 4.2 percent rate next year.

While some conservatives and liberals were concerned that the $111 billion tax break drains money from the Social Security trust fund, support for continuing a tax cut in the midst of a sluggish economy — and with an election year looming — was overwhelming.
MEDICARE: The “doc fix” has become an annual, expensive event year after year. Both sides promised close looks at Medicare payment policies as part of the agreement — but then again, they do that every year.

EMPLOYMENT INSURANCE: Regular benefits are available for up to 26 weeks, but in states with higher unemployment rates, the jobless can get more aid. Currently, authority for a total of 99 weeks expires at the end of the year, and an estimated 2.1 million people could lose benefits through mid-February.

House Republicans wanted to gradually reduce the maximum number of weeks to 59.
©2011 the McClatchy Washington Bureau

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