Efforts building to find compromise on budget resolution

Negotiators will resume work on the fiscal 2005 budget resolution this week with an eye toward completing the conference report in time for floor consideration Thursday in both chambers.

The House and Senate remain at loggerheads over so-called pay/go rules requiring both new entitlement spending and tax cuts to be offset. The Bush administration and House GOP leaders oppose including tax cuts under the rule.

Top Republican aides in both chambers predicted a compromise will be reached that could garner 51 votes in the Senate -- which would require two senators to switch their votes from the 51-47 vote in March on the amendment that reinstated traditional pay/go rules for both spending and taxes.

The next two days are crucial to get an agreement that would allow floor action this week. Talks are centering on the two Maine Republicans -- Sens. Olympia Snowe and Susan Collins, as well as moderate Democrats such as Sens. Ben Nelson of Nebraska and Blanche Lincoln of Arkansas. All voted for the pay/go amendment.

Aides said conferees were still debating the scope of tax cut legislation to be included under reconciliation, which protects against a Senate filibuster. In addition to extensions of the three popular expiring middle-class tax cuts -- at a $95 billion cost -- negotiators also were considering a one-year patch to keep more taxpayers from falling under the alternative minimum tax, costing $18 billion, and a provision accelerating estate tax repeal by one year, to 2009, at a $3.5 billion cost.

Inclusion of the additional tax breaks could make it difficult for moderates such as Nelson and Lincoln -- who have supported overhauling the estate tax -- to oppose the resolution. A Nelson spokesman said today his boss "would have to carefully consider" supporting the measure if the estate tax provision were included, but that it would have to be "affordable."

As of today, aides said a plan was under discussion that would allow the Senate to act on the measure first, paving the way for quick House passage before leaving town Thursday night. If the Senate approves the measure first, it would demonstrate to rank-and-file House lawmakers that they would not have to take a politically risky vote only to have the measure die in the Senate, a House aide said. The aide said GOP leaders would be "amenable" to that plan, although it would allow Senate Democrats to offer motions to recommit the measure back to a House-Senate conference committee and to an uncertain fate.

A Senate GOP aide said the proposal was "unlikely" and "a very risky path" that would require tight party discipline to defeat potentially numerous Democratic motions that could arise. Democrats would be limited to 10 hours of debate under that scenario.