Omnibus conference cancelled while negotiations continue

House and Senate GOP leaders and appropriators met Tuesday with Office of Management and Budget Director Joshua Bolten to discuss an endgame strategy for completing work on fiscal 2004 spending bills, but they have not yet resolved the weeks-long impasse over proposed changes to Labor Department overtime compensation rules.

"Overtime is still a problem," said Senate Appropriations Chairman Ted Stevens, R-Alaska, who backs the Senate amendment to the fiscal 2004 Labor-HHS spending bill that would ensure that workers currently eligible for overtime would still get the pay after the rule changes took effect.

A scheduled conference meeting to develop a fiscal 2004 omnibus spending bill was canceled and apparently will not be held until Wednesday. Both OMB and GOP leaders are questioning how $1.2 billion in additional education funds inserted by appropriators would be paid for. Negotiations also continue on offsets for other items in the omnibus bill, including $1.3 billion in additional veterans' healthcare funding and $1 billion to finance new election reforms.

In the closely divided Senate, organized labor's support could be crucial for the re-election hopes of Senate Labor-HHS Appropriations Subcommittee Chairman Arlen Specter, R-Pa., and he has stood firm in backing the provision blocking the Labor Department's overtime regulations. That threatens completion of the omnibus bill, since the Labor-HHS measure is one of five bills it will contain.

"I think unless it's worked out to Sen. Specter's liking, there probably will not be many senators who will sign the conference report," House Appropriations Chairman C.W. Bill Young, R-Fla., said.

The AFL-CIO weighed in Tuesday with a letter to senators urging them to oppose the omnibus if the overtime amendment is stripped.

"Failure to act before adjournment could condemn 8 million workers to losing their overtime protection," wrote AFL-CIO Legislative Director Bill Samuel.

The White House has threatened to veto the Labor-HHS spending bill if the Senate provision survives, although that could be a harder decision if it is included in the omnibus spending bill. But GOP lawmakers are set to roll the White House by keeping in place the 35 percent cap on broadcast media ownership.

A Republican leadership aide said appropriators were likely to give in to a White House request to boost funding to $900 million for the Millennium Challenge Account, a favored administration initiative aimed at reducing poverty in poor nations. Appropriators cut the program to $650 million in the fiscal 2004 Foreign Operations bill, half of what the administration sought. Some reductions in MCA funds were used to offset an increase in funding to combat AIDS, tuberculosis and malaria in the foreign aid bill.

The House is expected to consider the fiscal 2004 Energy and Water conference report today. By voice vote, the Senate today passed the fiscal 2004 VA-HUD and District of Columbia spending bills, both of which will go into the omnibus. Young said he had gotten clearance from the leadership to file the fiscal 2004 Transportation-Treasury bill, after agreeing to changes on government outsourcing language sought by OMB.

Democrats are warily eyeing other provisions GOP leaders are seeking to include, such as a school voucher plan for the District of Columbia and the FAA reauthorization bill. "We have a real fear the omnibus will be a wheelbarrow full of sand and no one will know what is in the sand," said House Minority Steny Whip Hoyer, D-Md.