Spending Bill Withdrawn in Senate

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The Wall Street Journal
By Corey Boles & Brody Mullins
December 17, 2010

WASHINGTON--In a victory for fiscal conservatives, Senate Democrats abandoned a $1.1 trillion bill to fund the federal government for the remaining nine and a half months of the fiscal year, acknowledging that there isn't sufficient support among lawmakers.

A visibly frustrated Majority Leader Harry Reid (D., Nev.) said late Thursday that he was forced to drop the bill after nine Republicans who had previously indicated they would support the measure wouldn't now vote for it.

Debate over the bill had become a proxy fight over Congress's reliance on large, multi-agency spending measures and over the adoption of earmarks, or targeted spending for lawmakers' favored projects. The spending bill contains more than 6,000 earmarks, many included at the behest of GOP senators.

Conservative organizations, tea party groups and some Republicans said they opposed the bill, partly because of the earmarks. The fiscally conservative Club for Growth predicted that any Republican who voted for the $1.1 trillion spending measure would face a primary challenge ahead of the 2012 elections.

Earlier on Thursday, as many as nine Senate Republicans, many of them members of the Senate Appropriations Committee that drafted the bill, planned to vote for the legislation, Senate aides said. But after those senators met with Senate Minority Leader Mitch McConnell of Kentucky, they reversed course and said they would oppose the bill, aides said.

Mr. McConnell said the bill was abandoned because it lacked the votes. "Members on this side of the aisle are increasingly concerned about the way we do business," he said.

Congress hasn't passed legislation to set spending levels for the full fiscal year that began on Oct. 1, relying instead on short-term measures. Lawmakers must come to agreement on a new spending bill before midnight on Saturday, or the federal government will have to shut down.

Mr. Reid said that with the failure of the $1.1 trillion spending bill, the only option left would be to pass another short-term measure, called a continuing resolution, which allows the government to continue spending at last year's levels.

Mr. Reid said he would work with Mr. McConnell (R., Ky.) over the next 24 hours to determine the length of a new, short-term spending measure.

The failure of the Senate bill could have an immediate impact on the Securities and Exchange Commission and the Commodity Futures Trading Commission, both of which gained significant new responsibilities under the Dodd-Frank financial-overhaul law.

Both were set to get big funding boosts under the Senate spending bill to add hundreds of new staff, as well as technology to implement the law. The SEC has already cut back on some enforcement activity as a result of the budget uncertainty.

To fund the government, Senate Republicans have offered a two-month spending bill that would expire on Feb. 18. By then, the GOP will have assumed control of the House and picked up several seats in the Senate.

The GOP leadership believes that would allow Republicans to influence the levels at which the federal government is funded for the rest of the year. Republicans say they want to roll back funding to fiscal 2008 levels, which they say would save $100 billion over the next decade.

Last week, the House passed a $1.2 trillion bill that would fund the federal government through September, 2011, and which contained no earmarks.

Mr. Reid said he wouldn't attempt to bring that legislation to the floor, because Mr. McConnell had also indicated that none of his party's lawmakers would support it.

--Victoria McGrane contributed to this article.

Write to Corey Boles at corey.boles@dowjones.com and Brody Mullins at brody.mullins@wsj.com

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This page contains a single entry by CFED published on December 17, 2010 8:33 PM.

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