Senate backs increase in debt ceiling; hopes high for fast omnibus action

By Peter Cohn, CongressDaily

The Senate approved an $800 billion increase in the statutory debt ceiling Wednesday, raising the amount of money the government can legally borrow to $8.2 trillion.

The 52-44 vote came as the White House threatened to veto the fiscal 2005 omnibus spending bill if the total exceeds the agreed-upon spending cap of $821.9 billion or uses unacceptable gimmicks to stay within budget limits.

The House is expected to vote Thursday on the debt limit bill, a timetable that would move it to the president's desk in time to stave off default. And despite the veto threat, hopes are high that an agreement to file the omnibus conference report for floor consideration can be reached by early Friday.

House Appropriations Committee Chairman Bill Young, R-Fla., said he expected both chambers to complete work on the $388 billion spending bill Saturday.

"We're moving quickly, resolving a lot of outstanding issues," he said late Wednesday. Other lawmakers and aides said they expected negotiations to move quickly because potentially controversial riders will not be included.

There had been talk about attaching legislation ranging from the stalled energy bill to a measure authorizing billions of dollars worth of water infrastructure projects. Taxpayer groups protested the $16 billion Water Resources Development Act, and Senate Democrats took to the floor to blast the White House and GOP leaders for running up record debt levels.

"We have a responsibility to restore fiscal responsibility rather than merely voting again to raise the nation's debt limit," said former presidential candidate Sen. John Kerry, D-Mass. Bond markets praised the move, however, arguing that to delay would impose higher borrowing costs on U.S. taxpayers.

Meanwhile, Republicans are proposing cuts in many areas of the domestic budget on the omnibus, while accommodating much of the administration's requests for increased foreign assistance.

The bill represents a broad give-and-take between congressional and administration priorities. For example, while funds to hire local police officers would be reduced about $110 million, appropriators have agreed to restore about $60 million sought by the administration for the National Endowment for Democracy.

Increases are funded by a 0.75 percent across-the-board cut, which adds close to $3 billion, and by shifting public housing authorities to a calendar-year budget, which saves $1 billion.

There is also a $300 million emergency fund for the Low-Income Home Energy Assistance Program, which the White House might take issue with. In a letter to omnibus conferees, Office of Management and Budget Director Joshua Bolten said such emergency designations, designed to evade budget caps, were unacceptable.

"The president's senior advisors would recommend he veto any bill that exceeds the agreed-upon spending limits or remains within the limits only through the use of unacceptable budgetary devices that mask the true level of discretionary spending," Bolten wrote, underlining the phrase for emphasis. He also reiterated a number of policy riders that must be jettisoned to avoid a veto, such as provisions that would block new overtime rules.

The $4 billion in add-ons are spread across a number of accounts, the largest being $1.6 billion for programs funded by the VA-HUD bill. Most of that increase, some $800 million, is for NASA, a top administration priority, while the remainder is sprinkled throughout other programs.

HUD would receive close to $1 billion more than the president's request, mostly for Section 8 rent vouchers, leaving cuts in other housing programs. The National Science Foundation's budget would be reduced by $60 million from the previous year, to $5.5 billion, although research funding would be frozen.

EPA's budget would be cut $300 million from last year's totals to $8.1 billion, mostly from clean water infrastructure grants. That is $300 million more than the president's request. Veterans' medical care would be increased by $1.2 billion over the president's request.

Labor-HHS programs would see an additional $1 billion, including more funds for such administration priorities as community colleges and congressional favorites such as the National Institutes of Health. However, NIH would still be funded at only about $28.2 billion, a 2 percent increase over the previous year -- the lowest in 23 years, according to Senate Appropriations ranking member Robert Byrd, D-W.Va.

Byrd called the omnibus a "very lean, and in many areas, an irresponsible and shortsighted bill."

The U.S. Postal Service will get an extra $507 million to combat bioterror attacks, which the administration did not request, while appropriators will accommodate almost $1.6 billion for the Millennium Challenge foreign aid initiative, almost $1 billion short of the White House request.

Congress has already enacted large increases in the fiscal 2005 Defense and Homeland Security bills earlier this year. Those two bills make up more than half the $821.9 billion total allowed under the 2005 budget agreement. The $388 billion omnibus covers eight other appropriations bills and dozens of federal agencies and programs, as well as a continuing resolution to fund programs in the Energy and Water bill.