Negotiators aim to finish budget blueprint next week

The top House and Senate budget negotiators said Thursday they are working through disagreements and should have the $2.9 trillion fiscal 2008 budget resolution wrapped up by late next week.

On an overall fiscal 2008 discretionary spending cap, House Budget Chairman John Spratt, D-S.C., indicated negotiations were headed in the direction of the House's $955 billion figure. That is $6 billion above the Senate number, and $22 billion above President Bush's request.

Previous assumptions had been that the two sides would simply split the difference, but Spratt hinted the number was edging up higher. "We're trying to get a little bit better deal than that," he said.

House Appropriations Chairman David Obey, D-Wis., has made the case that the extra money in the House version is the minimum necessary to begin erasing the cuts and freezes of recent GOP appropriations bills. "We're trying to get there," Spratt said. "We've made pretty good progress on non-defense discretionary. We're moving towards convergence, I can say that."

The overall number assumes full funding of Bush's Pentagon request, meaning the additions will go to homeland security, veterans' benefits, worker safety, education and other domestic programs. Senate Budget Chairman Kent Conrad, D-N.D., would not comment other than to say: "Nothing is agreed to until everything is agreed to."

If he acquiesces on non-defense spending, Conrad will require other concessions. One of those could come on the question of including "reconciliation" instructions that would enable the relevant committees to pass a filibuster-proof higher education bill later this year.

The House included a provision requiring the Education and Labor Committee to come up with $75 million in net savings, ostensibly through cuts to student-lender subsidies coupled with expanded spending on college-aid programs.

Conrad has derided that approach as producing negligible savings and an abuse of the reconciliation process.

But Spratt said Thursday that one idea on the table was to increase the amount of savings anticipated. That compromise could satisfy Conrad's desire for deficit reduction while still enabling House Education and Labor Chairman George Miller, D-Calif., and Senate Health, Education, Labor and Pensions Chairman Edward Kennedy, D-Mass., to draft a filibuster-proof higher education bill.

"That's not settled yet," Spratt said.

There is also the possibility conferees might drop reconciliation altogether, which Conrad has sought. Miller and Kennedy had wanted it as an option in case a bipartisan bill was not possible. But sources said Kennedy has been in talks with HELP ranking member Michael Enzi, R-Wyo., about a compromise higher education bill that could move outside reconciliation and garner the needed 60 votes.

Conrad and Spratt are also trying to work out an accommodation on tax-cut extensions. An amendment by Senate Finance Chairman Max Baucus, D-Mont., would assume several expiring tax cuts are extended beyond their 2010 expiration date, at a $180 billion cost. That amendment passed 97-1, more than enough to clear the 60-vote "pay/go" hurdle. But House Democrats are wary of waiving pay/go and would prefer to find offsets.

The House budget blueprint assumes expiration of all the Bush tax cuts, unless they are paid for through other revenue increases or entitlement spending cuts.

Spratt and Conrad said they are toying with the idea of a "trigger" that would only apply in the House, and ensure that tax cuts could go forward without offsets if surpluses were to materialize.

"We've got to work out some sort of dual process," Spratt said. "I don't want to get too explicit. We're just swapping ideas right now."

Conrad said he could see "conceptually" how such a trigger would work, but he declined to characterize exactly how "at this delicate moment" in the negotiations.

Spratt said conferees could meet as early as Wednesday, and Democratic aides said the House could approve a final conference report by the time the House adjourns either late Thursday or early Friday. The Senate would then follow suit, making it only the third time in the last six years Congress was able to agree on a budget.

"This experience has shown me why we haven't had a budget three out of the last five years," Conrad said. "This is extremely difficult to do."

The House will appoint conferees Monday, after it passes a special rule that was required because GOP leaders objected to naming conferees by unanimous consent Thursday.

The UC was required because of a paperwork snafu that arose upon Senate passage of its version. "We're not going to make it easy for them to pass the largest tax increase in history," a GOP aide said.