Congress back to drawing board on massive spending bill

Democratic leaders headed back to the drawing board this week on a massive spending bill covering every Cabinet agency except the Pentagon, after a White House veto threat this weekend scotched chances for a deal.

House Appropriations Chairman David Obey, D-Wis., says he wants to reduce fiscal 2008 spending bills to the president's overall $933 billion target, while eliminating all lawmakers' earmarks, as well as President Bush's own budget priorities, such as additional funding for the Iraq war.

"We might as well simply go down to the president's levels on those bills so that at least if we're going to lose, we might as well lose with clarity, so that people understand who's responsible for those inadequate investments," Obey said.

"And if you take those bills down to the president's level ... it is very hard for me to understand how earmarks could survive. It's not a threat. It's a reality."

The new plan could prolong the session until around Christmas, given the time it would take to put the bill together and get it through both chambers and to Bush for his signature.

"If anybody thinks there's any longer a chance for getting out of here by the 14th, they're smoking something," Obey told reporters. "I think the question is do we get out of here by the 22nd."

Democrats had been planning to file a roughly $523 billion package Monday night for House consideration Tuesday.

It would have added $11 billion for domestic programs to Bush's budget request -- about half what the Democrats initially proposed -- plus emergency funds for other domestic needs, while allowing Senate Republicans later this week to add as much as $70 billion in unfettered funding for the wars in Iraq and Afghanistan.

Senate Majority Leader Harry Reid, D-Nev., met with Minority Leader Mitch McConnell, R-Ky., Monday to try to salvage an agreement.

Reid would not comment directly on Obey's plan, but later his spokesman hinted leaders would have no choice but to concur if there is no deal soon.

"When Americans wonder why there are fewer police on their street, fewer agents on our borders and fewer teachers in their children's classrooms, the answer will be painfully clear: The president and Bush Republicans are unreasonable and unwilling to negotiate in good faith," said Reid spokesman Jim Manley.

A Pelosi spokesman declined to comment, other than to note Obey briefed her on his plan before he announced it.

Democratic leadership aides described the situation as in flux, but that leaders are clearly upset at Bush's veto threat.

One aide called the veto threat irresponsible and characterized Obey's plan as an option.

Like Reid, Senate Appropriations Chairman Byrd, D-W.Va., is still pressing for a deal.

"The White House should cease its political posturing and work with the Congress to complete the appropriations process. It is time to govern, Mr. President," Byrd said in a statement.

McConnell has been involved in the negotiations, and sources said he had considered the Democrats' split-the-difference offer at least the starting point for a compromise.

But his position also firmed up over the weekend, labeling their offer "unacceptable."

Up for re-election next year, McConnell has been under scrutiny by conservatives including influential groups such as the Club for Growth.

Even more firm are House GOP leaders, although there is an undercurrent among moderates pushing for some accommodation.

Obey accused House Minority Leader Boehner, R-Ohio, of a deliberate strategy to deprive Democrats of any legislative achievements this year.

An OMB spokesman portrayed the White House position as unbending, while the Democrats continue to bicker.

"Our priorities have not changed -- fund the troops without strings and fund the federal government within the reasonable and responsible spending levels proposed by the president," he said.

Sources said White House Chief of Staff Josh Bolten and OMB Director Jim Nussle continue to keep the lines of communication open and did not rule out the possibility a deal at slightly lower spending levels than what is on the table.

If the talks fail, Obey's plan still faces significant hurdles. Eliminating all earmarks for the second year in a row would be a tough sell to members of both parties in both chambers.

The White House is still demanding war funding, and Democrats facing re-election next year dislike the prospect of pre-Christmas furlough notices going to thousands of civilian employees the Pentagon says it will issue without a cash infusion.

Given Bush's opposition even to Democrats' relatively smaller domestic increases, Obey said it is not worth it if the tradeoff means tens of billions of dollars more for an unpopular war in Iraq.

"In my view, it's time to fish or cut bait. I'm tired of debating table scraps, and it's clear to me that the White House does not intend to compromise; they intend to sit back like Buddha and keep expecting us to compromise with ourselves. I'm done with navel-gazing," Obey said.

"I'm not going to sit here and enable them to chisel domestic money down, down, down, down, so you wind up getting $5 billion bucks in return for $50 [billion] or $90 [billion] or whatever the hell it is they want for the war."