Lawmakers aim to settle on budget blueprint soon

House and Senate budget writers are aiming to have most of the paperwork ironed out by the time both chambers get back from recess to wrap up negotiations on the fiscal 2008 budget resolutions.

The differences between the versions are minimal, as Democrats sought to hammer out details before unveiling their measures last month. "I suspect they'll finish the conference in about 35 minutes -- maybe 40," said a lobbyist and former congressional aide.

House Budget Chairman John Spratt, D-S.C., said last week it could be finished by the end of April. Lobbyists and aides are eyeing the total discretionary spending target for fiscal 2008, which will dictate spending levels for the Appropriations committees; whether the agreement includes reconciliation instructions to authorizing committees; and if the budget will chew up most of a projected fiscal 2012 surplus by assuming extensions of various tax cuts while still achieving a balanced budget.

On discretionary spending, the chambers are close, with a likely outcome to be overall spending in the $20 billion range above the White House request. Lobbyists are also watching to see if the conference agreement will include reconciliation instructions, which are used to protect legislation from Senate filibusters.

The House version includes an instruction to the Education and Labor Committee to come up with $75 million in net savings over five years. That could assume inclusion of higher education reauthorization provisions, as long as spending increases are matched by offsetting cuts.

The Senate version did not include reconciliation, but conferees could include it to reflect the broad support among Democrats in both chambers to cut subsidies for student lending companies to pay for expansions of student-aid programs.

Opinions are divided about whether it would pass muster with parliamentarians, but lobbyists also are waiting to see if Democrats might include a separate reconciliation instruction to the Senate Finance and House Energy and Commerce panels for reauthorizing the State Children's Health Insurance Program.

With bipartisan support, the Senate included an amendment by Sen. Gordon Smith, R-Ore., urging an increase of the cigarette tax by 61 cents a pack to help offset the $50 billion to expand SCHIP. Senate Budget Chairman Conrad also favors cutting overpayments to certain health providers under Medicare as a partial offset. If Medicare becomes a target, as well as the cigarette tax or perhaps other revenue increases, the House Ways and Means Committee would become involved.

The other major issue will be if Democrats assume extension of tax cuts beyond 2010. An amendment by Senate Finance Chairman Max Baucus, D-Mont., effectively used up all of Conrad's projected surplus to pay for tax-cut extensions, as well as SCHIP.

If similar language is included in an agreement, it would send a signal to the markets and to voters that Democrats are serious about at least partly extending major expiring tax provisions. But it also would make the Democrats' goal of a balanced budget tougher to achieve.