WASHINGTON DIGEST: Spending bill prevents shutdown; payroll tax cut extended

WASHINGTON -- Congress reached a last-minute deal to avoid a partial government shutdown last week, approving $915 billion in spending to cover the remaining nine months of the fiscal year.

The House voted 296-121 in favor of a multiagency spending bill for the fiscal year that began Oct. 1. More than half of the spending will cover military, homeland security and veterans programs.

The Senate followed suit, 67-32.

The measure combined nine overdue appropriations bills needed to fund the government through the fiscal year. Combined with earlier legislation, lawmakers reduced discretionary spending by $7 billion from the 2011 fiscal year.

The Pentagon's core budget will increase 1 percent to $518 million, not including $115 billion for the Iraq and Afghanistan wars. The Environmental Protection Agency will get $8.4 billion, a 6 percent cut from the president's request.

Lawmakers also cut legislative branch spending by 5 percent; their salaries are not changed by the reduction.

The federal agencies included in the bill had been operating under a short-term "continuing resolution" that expired Friday night.

Opposition to the bill came from conservatives, who said it spent too much, and liberals, who said it spent too little.

"Aside from spending levels being simply too high, this is a 1,200-page bill that we're voting on only a few hours after it was finalized. We'll be discovering for months to come what's actually in it," said Rep. Jeff Flake, R-Ariz.

Reps. Joe Heck, R-Nev., and Shelley Berkley, D-Nev., voted for the bill. Rep. Mark Amodei, R-Nev., voted against it.

Sens. Harry Reid, D-Nev., and Dean Heller, R-Nev., voted for the bill.

PAYROLL TAX CUT EXTENDED

In another late compromise, the Senate voted 89-10 for a $33 billion bill that would temporarily extend jobless benefits for the long-term unemployed and a Social Security payroll tax cut that was set to expire at the end of the year.

The deal provides taxpayers with benefits that President Barack Obama had urged Congress to pass as part of his latest job-creation strategy, although it was only a short-term fix and will be revisited before the legislation expires at the end of February.

The bill also averted -- for two months -- a scheduled cut in Medicare fees paid to doctors.

In a bid to win Republican votes, the package required Obama to make a decision within 60 days on whether to allow the proposed Keystone XL oil pipeline from Canada to Texas.

Further, Democrats dropped a demand that the benefits be offset by a tax surcharge on Americans who earn more than $1 million annually. Instead, the bill established a new fee on mortgages backed by government lenders.

Reid and Heller voted for the bill. The House was expected to vote on it before Christmas.

SENATE KILLS BALANCED BUDGET BIDS

Two measures seeking a balanced budget amendment to the Constitution fell well short of the two-thirds majority needed to clear the Senate.

Proponents, most of them Republicans, said a constitutional amendment is needed to restrain Congress, which has shown no lasting resolve to curb deficit spending.

"Absent the constitutional restraint of a balanced budget amendment, Congress and the president do not make the tough choices. Instead, they take the path of least resistance," said Sen. Orrin Hatch, R-Utah.

Opponents, most of them Democrats, argued the amendment would make it difficult for Congress to deal with economic downturns or emergency disasters. They also noted that balanced budgets had been achieved as recently as the Clinton administration.

"History has shown that Congress can balance the budget without tampering with our Constitution. We did it in the 1990s, and we can do it again," said Senate Majority Leader Harry Reid, D-Nev.

The Senate scheduled the votes to fulfill a commitment made last summer over raising the government's debt limit. The House held its vote last month, falling 23 votes short of the two-thirds majority needed.

The Republican proposal, which Hatch offered, would have required a balanced budget, limited government spending to no more than 18 percent of gross domestic product and required a two-thirds majority of Congress to raise taxes.

The Senate voted 47-53 in favor of the bill. Sen. Dean Heller, R-Nev., voted for it. Reid voted against it.

Sen. Mark Udall, D-Colo., offered an alternative that included no spending cap, did not require a supermajority to raise taxes, and would have shielded Social Security funds from being used to balance the budget.

The Senate voted 21-79 in favor of his alternative. Heller voted for it. Reid voted against it.

DEFENSE AUTHORIZATION APPROVED

The House and Senate voted in favor of a $662 billion defense authorization bill that sets military policy and spending targets for the fiscal year that began three months ago.

Passage of the bill had stalled for months over the handling of suspected terrorists. The Obama administration had threatened a veto over the issue. Negotiators were able to agree to changes that saw the veto threat dropped.

Under the legislation, foreign terrorists who attack the United States would be held in military custody. They would face a military trial unless the president signed a waiver to do otherwise.

The bill includes a 1.6 percent across-the-board pay raise for all members of uniformed services. It also elevates the chief of the National Guard to the Joint Chiefs of Staff.

Bringing the National Guard up to the same level as the Army, Navy, Air Force and Marines reflects its changed role, from principally handling state disaster relief, to more combat missions, proponents said.

The Senate approved the authorization bill 86-13. Heller and Reid voted for it.

The House approved the bill 283-136. Amodei, Berkley and Heck voted for it.

Contact Stephens Washington Bureau reporter Peter Urban at purban@stephensmedia.com or at 202-783-1760.