Same Budget, Different Year

Funding for almost half the government is teetering on a partisan brink in Congress, with its fate thrown into question by disputes over a motley array of issues including meat safety, overtime pay and media ownership.

Resolving the budget problem is the first order of business as Congress returns from a six-week recess Tuesday. It is also the first test of how hard it will be for Republican leaders to move President Bush’s top priorities through Congress in this election year.

Approval of the $328-billion spending measure for dozens of government agencies is at risk because of opposition to controversial Bush-backed policies slipped into the bill -- including a delay in meat-labeling requirements that has become especially contentious after the recent mad cow scare.

The House has passed the bill, but Republican leaders are scrambling to avoid its defeat in the Senate. Failure would embarrass the Republicans on the opening day of a session in which they hope to finish work on major Bush initiatives in energy policy and legal reform.

Heading into the election, congressional Republicans have incentives to back Bush, who will lay out his agenda in the State of the Union address Tuesday.

But the political interests of a president running for reelection and congressional Republicans may not always coincide. The president’s plan to increase the ranks of legal immigrant workers, for instance, is bitterly opposed by many Republicans and is unlikely to get far in Congress this year.

Republicans in the House and the Senate are seeking more money for highway construction than will be requested by Bush, who has been under fire from some conservatives for being tolerant of big spending on Capitol Hill.

Jim Dyer, staff director of the House Appropriations Committee, said the real test of Bush’s resolve on spending will come in how much he proposes for the highway bill.

“There is going to be a lot of pressure from the Hill to take it higher,” Dyer said.

At a presession Republican retreat on the Eastern Shore of Maryland last week, White House political advisor Karl Rove reassured House leaders that Bush would not pursue his own reelection victory at the expense of House and Senate Republicans.

“Bush does not want a lonely victory,” said a House strategist at the retreat.

Congress must finish the budget business left over from last year before it can plunge into its 2004 agenda.

At issue is legislation that would provide funding for most domestic programs for the fiscal year that began Oct. 1. Due to congressional inaction on regular budgets, those programs have been running on stopgap funding that expires Jan. 30.

The $328-billion catchall bill got hung up in the Senate late last year because of changes made at the last minute at Bush’s behest. Especially controversial were changes that -- over bipartisan opposition -- cleared the way for Labor Department rules curbing overtime pay and Federal Communications Commission rules allowing big media companies to get even bigger.

Also in dispute was an administration-backed provision to delay for two years a requirement that beef products carry “country of origin” labels. The delay was sought by big beef producers, who said the labeling requirement would be a costly bureaucratic burden.

But the issue took on new life after the mad cow disease scare raised public concern about meat safety. The cow diagnosed with the disease was born in Canada, fueling demands for labels showing which beef products are “Made in the U.S.A.” Senate Minority Leader Tom Daschle (D-S.D.) has threatened to block the entire bill if the labeling rules are not reinstated.

It is not clear how many other Democrats would join him in a filibuster. Democrats could return in a combative mood because of Bush’s recent decision to circumvent two years of Senate opposition and install a controversial conservative, Charles W. Pickering Sr., as a federal judge, by using the presidential power to make appointments while Congress is in recess.

The spending bill dispute will come to a head Tuesday, when lawmakers vote on whether to end debate and bring the measure to a final vote. In the 100-member Senate, it takes 60 votes to cut off debate. Late last week, a senior aide said GOP leaders did not have the votes to prevail.

“We’re not there yet,” said Eric Ueland, senior advisor to Senate Majority Leader Bill Frist (R-Tenn.). “It will go down to the wire.”

Joel D. Kaplan, deputy director of the Office of Management and Budget, warned that the alternative to approving the funding bill would be to stick with current spending levels for the rest of 2004, which would shortchange many programs slated for increases, including the president’s international initiative to combat AIDS.

“There’s any number of programs like that,” Kaplan said.

Frist sent a letter to senators last week detailing the programs that could suffer -- including the $200-million effort to help California recover from recent wildfires.

Senate Appropriations Committee Chairman Ted Stevens (R-Alaska) earlier sent a more pointed message in letters to individual members detailing the home-state projects they could lose if the spending bill died.

Democrats hope to show muscle in Tuesday’s vote, then win concessions from Republicans on meat labeling and other issues. Republicans calculate that critics cannot block for long a bill that finances so many popular programs.

Once the money issue is settled, Congress will move on to other unfinished business from last year. A broad energy policy rewrite fell two votes short of passing late last year. GOP leaders are scrambling -- so far without success -- to round up the votes to bring back the bill, which is a top Bush priority.

The Senate also plans to revive a bill to make it harder for plaintiffs to prevail in class-action lawsuits. The bill, which would force many such suits out of plaintiff-friendly state courts and into federal courts, which corporate defendants prefer, stalled last fall in the face of opposition from consumer groups and trial lawyers. But late last year, key senators reached a bipartisan compromise that cleared the way for Senate approval. That could be the first big victory for Bush’s broader legal reform effort to cut back on lawsuits critics say are frivolous and burdensome.

Debate on the budget for 2005 opens Feb. 2, when Bush unveils his request. It is expected to call for tight curbs on spending in areas other than defense and homeland security, but still project big deficits for years to come. A key question is how hard Republicans will push for a fourth round of tax cuts. House GOP leaders are eager to press Bush’s proposal to make permanent the tax cuts first enacted in 2001. But tax cuts will run into more opposition in the Senate, where Republicans’ control is more tenuous and deficit-conscious moderate Republicans hold more sway.

Congress may be forced to act on another tax front. The World Trade Organization has ruled illegal existing U.S. tax credits for exporters, and European leaders have threatened $4 billion in trade sanctions if the law is not changed. Congress is set to repeal the export tax credit, but is squabbling over what tax breaks to replace it with. The legislation is politically sensitive because it has big effects on the ailing manufacturing sector -- an important barometer of the nation’s economic health.