Budget still in limbo as recess awaits

Democratic leaders will try to navigate a minefield this week and finally complete the fiscal 2008 appropriations process, all the while addressing legislation on the alternative minimum tax, heading off a scheduled Medicare physician pay cut, terrorism risk insurance, energy legislation and others.

Bringing the appropriations endgame to a close will require congressional leaders to hold together a fragile coalition of moderates from both parties.

Democrats opposed to the war in Iraq are likely to abandon ship over unfettered funding being included for the military.

On the other hand, the more conservative Republicans are likely to oppose the bill because it spends too much money and because they generally abhor omnibus bills.

President Bush sent signals Friday that he would sign the bill provided war funds are included, and if it contains no policy riders, tax increases or budgetary sleights-of-hand.

He made clear if Democrats cannot cobble together enough votes to pass the measure, he would be happy to sign another yearlong continuing resolution into law.

That would mark the second budget breakdown in as many years, dealing a serious blow to Congress's credibility in being able to set annual spending priorities.

The White House would largely dictate how the money is spent for every federal agency except the Pentagon, and lawmakers would be deprived of home-state earmarks -- a prospect Bush and some Republicans would no doubt relish.

Top Republicans such as House Minority Leader John Boehner, R-Ohio, and Senate Minority Leader Mitch McConnell, R-Ky., are institutionalists who do not want to see Congress relegated to the sidelines.

That might play to the Democrats' favor, as they will likely have to rely on GOP leaders to deliver the votes to pass the measure if anti-war Democrats balk at the inclusion of as much as $70 billion in military funding.

Democrats have largely accepted Bush's proposed budget limit for all non-Defense spending, with the exception of $3.7 billion for veterans' programs.

Neither Bush nor his aides have come out against that prospect, raising the likelihood that GOP leaders will sign on.

Some other emergency spending is likely to be acceptable, although the existing $7.4 billion package might have to be trimmed slightly to appease conservatives.

The package was in flux at presstime and aides were set to work through the weekend to put it together.

Democratic leaders had a goal of having it ready for public viewing by Sunday night, which would allow the House to consider the measure as early as tonight.

It would then move to the Senate, where the amendment to add Iraq war funding would be added, and sent back to the House for final approval.

In addition to veterans' programs, homeland security and foreign aid would still see healthy increases over last year's budget.

Domestic agencies are not nearly as lucky, as funding for job-training, education, health care and social services are largely frozen at last year's levels.

In general, Democrats are shifting funds from Bush priorities like nuclear weapons research and faith-based community services programs to their priorities, including medical research and local police forces.

Earmarks are preserved for members of both parties, which might attract more votes.

With major funding questions mostly settled, Republicans will be busy combing the text for policy riders that could not be enacted as part of other, non-must-pass bills.

Before the Senate considers the appropriations package, it will turn Monday to legislation to limit the administration's warrantless surveillance activities.

Majority Leader Harry Reid, D-Nev., said he wants a measure approved by the Senate Intelligence Committee that would overhaul the Foreign Intelligence Surveillance Act to be brought up this morning as the base bill for debate.

A Senate Judiciary Committee version would be considered as an amendment, he said.

The Intelligence panel's measure would give retroactive legal immunity to telecommunications companies that helped the Bush administration spy on U.S. citizens without warrants dating back to 2001.

The Judiciary measure is silent on the issue.

The companies face about 40 civil lawsuits, and the White House has threatened to veto any bill that does not protect the firms from liability.

But two leading opponents of the Intelligence Committee's immunity provision -- Sens. Christopher Dodd, D-Conn., and Russell Feingold, D-Wis. -- have said they will block the bill from being considered.

Reid said Friday that he expects a full debate on the immunity issue, but disclosed that Democratic and Republican leaders of the two committees were working on a compromise that "might give them [the telecommunication companies] some relief."

Judiciary ranking member Arlen Specter, R-Pa., said he will offer a floor amendment that would substitute the government as the defendant for the companies in the lawsuits.

He portrayed his amendment as a compromise that would allow the lawsuits to proceed but protect companies that acted in response to written requests from the administration.

A temporary law to overhaul FISA expires Feb. 4.

A possibly tough conference looms with the House, where Democrats pushed through a bill that does not give the companies immunity.

On energy, the House Tuesday is expected to pass a bill that had previously passed the House but was scaled back in the Senate.

Senate negotiators took a House-passed bill and removed billions of dollars in tax incentives for renewable energy and energy efficiency that were paid for mainly by repealing about $13 billion in incentives for oil and gas companies.

Senate Democratic leaders last week fell one vote short of keeping those tax provisions in the measure when they failed to break a GOP-led filibuster.

The dropping of these tax provisions was crucial to avoiding a likely veto.

Bush is expected to sign the bill, which the Senate approved Thursday.

It includes a popular 40 percent rise in fuel efficiency standards, a renewable fuels mandate for refiners, new efficiency standards for light bulbs and federal buildings and an assortment of other conservation language.

The National Commission on Energy Policy estimates that the rise in fuel efficiency standards and the renewable fuels mandate alone will reduce domestic oil use by 5 million barrels per day by 2030, save consumers $161 billion annually by 2030 in fuel costs based on $90 per barrel of oil and $3 per gallon of gasoline, and reduce U.S. carbon dioxide emissions by 320 million metric tons in 2020 and 675 million metric tons in 2030.

The group said energy savings in 2030 would have been about 11 percent greater if Senate negotiators had not dropped the renewable energy and efficiency tax incentives as well as a renewable electricity mandate for investor-owned power companies.

The Senate meets Monday at 10 a.m. to resume consideration of FISA legislation.

The House meets Monday at 10:30 a.m. for morning hour and noon for legislative business. Recorded votes will be postponed until 6:30 p.m.