Budget negotiations remain gridlocked

The odds of reaching an agreement on the fiscal 2005 budget resolution worsened Tuesday as Senate GOP moderates indicated they were not inclined to support a one-year budget plan that punts future policy assumptions on taxes and spending until next year.

The plan would allow for a one-year discretionary spending cap and tax cut reconciliation bill.

Senate Commerce Chairman John McCain, R-Ariz., said he would be a flat-out "no" vote on the proposal, which would exempt tax cuts included in reconciliation this year from "pay/go" requirements. Sen. Lincoln Chafee, R-R.I., said it was "doubtful" he would support the proposal, given that it could make it easier to pass tax cut legislation next year, such as the three expiring popular middle-class tax breaks that will be due for an extension.

Sen. Olympia Snowe, R-Maine, who had a lengthy talk with Senate Budget Chairman Don Nickles, R-Okla., Monday night, said she was still discussing the proposal, but GOP aides said she was unlikely to support it, given her previous opposition to exempting tax cuts from pay/go rules. The fourth GOP holdout, Governmental Affairs Chairwoman Susan Collins, R-Maine, could not be reached for comment.

Sen. Ben Nelson, D-Neb., who is also talking with Nickles on the budget, said he had not yet made a decision. "We're still fishing," Nickles said.

Minority Leader Tom Daschle, D-S.D., downplayed the likelihood that Nelson would break ranks with Democrats, saying Nelson "has been coming to me almost on a daily basis" to brief Democratic leadership on his discussions with Republicans. Daschle also said he has "no concern" about how Nelson will vote on the budget if pay/go provisions are not addressed to the Democratic Caucus' satisfaction.

If no deal is reached this week, it could be difficult for lawmakers to conclude work on the fiscal 1005 budget resolution before the Memorial Day recess because of a packed floor schedule in both chambers this week and next. Aides said that scenario could mean budget talks are either declared dead or put off for months, in which case the House and Senate could "deem" an fiscal 2005 discretionary spending target. That could be more difficult in the Senate because of procedural hurdles, which means Senate appropriators could be limited to $814 billion in spending for fiscal 2005 as set by last year's budget resolution. The spending cap, however, could be raised to add funds to the fsical 2005 Defense spending bill with only a majority vote, a senior Senate GOP aide said, bringing the cap back to the $821 billion total under the fiscal 2005 budget resolution. But top lawmakers and aides continue to stress that the talks are ongoing and no one is giving up yet on the budget resolution.

"People are already calling the funeral home and the patient isn't even dead yet," said Eric Ueland, deputy chief of staff to Senate Majority Leader Bill Frist, R-Tenn.

Meanwhile, McCain, Snowe, Collins, Chafee and Nelson all voted today for the amendment offered to the corporate tax bill by Sen. Maria Cantwell, D-Wash., to waive pay/go rules to extend unemployment benefits for an additional 13 weeks at an estimated cost of up to $8 billion. That amendment fell one vote short of the 60 needed for the waiver.