Senate signs off on its final spending bill

The Senate approved its final fiscal 2006 spending bill Thursday, sending a $145.7 billion Labor-HHS measure to conference with the House after adding $8 billion in emergency funds to help prepare for a potential avian flu outbreak.

The actions came as the White House was preparing a fully offset hurricane aid request of nearly $20 billion to be sent to Capitol Hill Friday, containing about $1.3 billion for rebuilding New Orleans' levees to withstand Category 3 storms. Hurricane Katrina hit the Gulf Coast with a stronger force.

Tight budgets are also driving the House Agriculture Committee's $3.7 billion deficit reduction plan to be considered Friday.

Food stamp cuts are scaled back from an earlier draft, and the bill would provide $50 million in food stamp benefits for hurricane victims.

This round of hurricane aid, to cover additional costs associated with Katrina, as well as Rita and Wilma, will be paid for through reallocations of existing Federal Emergency Management Agency resources and program terminations proposed by President Bush that appropriators have not acted upon.

The White House was putting the finishing touches on the supplemental packages, with the numbers being finalized Thursday night.

About $1 billion would cover Wilma-related damages. The rest would go to Katrina and Rita relief, but additional requests are piling up, including an effort by Florida lawmakers to add as much as $1 billion for agricultural losses as a result of Wilma.

It will not cover about $5 billion in flood insurance costs, which would be handled in separate legislation.

The new money is meant to last until next June, and most of it -- in the $15 billion range -- is paid for through reallocations of previously appropriated FEMA resources.

Of the $60 billion Congress has already approved, OMB estimates as much as $17 billion will remain in FEMA's disaster response account by next June, and White House budget officers want to pay for any remaining projects by rescinding funds spent on programs Bush proposed to terminate during the last two budget cycles.

Under the evolving package, about 11 impacted Cabinet departments and agencies would receive up to $9 billion, more than half for the Pentagon, while another $10 billion or so would go toward response activities like Small Business Administration disaster loans and education, healthcare and housing initiatives Bush announced after Katrina hit the Gulf Coast.

The Army Corps of Engineers would receive $1.7 billion to cover levee rebuilding costs and wetlands restoration.

Nearly $5 billion would go toward Defense Department equipment repairs and family housing. Additional funds to rebuild shipbuilding facilities in Mississippi and Louisiana are included.

The Veterans Affairs Department would receive roughly $1.4 billion to repair damaged facilities like those in New Orleans and Biloxi, Miss.

Meanwhile, the House Agriculture panel got a reprieve from a higher, $4.25 billion spending cut instruction, in part because the House Resources Committee found about $1 billion in additional savings over its $2.4 billion target.

The House Budget Committee will consider the overall, $50 billion-plus deficit reduction plan the Budget Committee next week.

Within its $3.7 billion spending cut plan, the Agriculture panel included $50 million for food stamps for hurricane victims, offset with other reductions.

The House Agriculture plan still has 23 percent more in cuts than the Senate version, including $844 million from food stamps. The Senate bill leaves nutrition programs untouched.

Rep. Bob Goodlatte, R-Va., agreed to soften language on immigrants' eligibility, however, shortening the proposed waiting period from 10 years to seven from the current five. He also dropped language eliminating a state exemption for some able-bodied adults.

Goodlatte removed savings from crop insurance programs from an earlier draft. About $1 billion overall would be shaved from commodity programs, including $513 million up front in fiscal 2006 by reducing advance direct payments to farmers from 50 percent to 40 percent for the fiscal 2006 and fiscal 2007 crop years.