Talks Focus on Programs' Cuts

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The Wall Street Journal
By: Janet Hook
April 11, 2011

Republicans and Democrats continued to haggle over how to spread nearly $39 billion in cuts across a multitude of government programs behind the deal that averted a government shutdown last week.

White House officials and Democrats said that they had mitigated proposed cuts to key education and health programs, including the Head Start preschool program, Pell Grants for low-income college students and federal scientific research.

Republicans and Democrats are still putting together the details of a budget agreement reached Friday night that averted a government shutdown. But the final details of the bill remain elusive, as WSJ's Neil Hickey reports from Washington.
.House Speaker John Boehner (R., Ohio) won a final deal on an education priority of his own: legislation resurrecting a school voucher program in the District of Columbia.

For defense spending, the agreement limits proposed increases in spending, with the Pentagon getting $513 billion in fiscal 2011, up from $508 billion the prior year. But that is less than what both the GOP and President Barack Obama wanted.

A top Republican aide said the aim was to finish and introduce the bill by Monday night, and bring it to a vote by the House Wednesday and the Senate Thursday. While the broad outline of a deal was announced Friday night, the precise details remain so fluid that lobbyists and lawmakers are still working to shape final provisions that affect their interests.

For example, the deal doesn't include funding for an alternative engine for the Joint Strike Fighter--a costly defense project important to Mr. Boehner's constituents that was rejected in the House earlier this year. But Rick Kennedy, a spokesman for General Electric Co.'s engine-making unit, GE Aviation, said the company was still lobbying to allow the program to continue. A trade association of for-profit colleges, in a weekend email, also urged its members to continue pushing for inclusion of provision blocking new regulation of the industry.

Democrats initially called for a spending freeze, while House Republicans called for $61 billion in cuts. The $39 billion in cuts finally agreed to, Democratic leaders said, came in exchange for Republicans dropping policy provisions that would undercut the health-care law and aid to family-planning programs.

"The compromise, I think, is a fair compromise,'' said Sen. Charles Schumer (D., N.Y.) on CBS's "Face the Nation.'' "Both sides gained. And I think it will get broad bipartisan support.''

Although crucial details were still being worked out, aides from both political parties said they don't believe any remaining decisions would derail the agreement's passage. Momentum to pass the deal and move onto a broader budget debate mounted on Sunday, when the White House announced that Mr. Obama would be giving a speech Wednesday that would include new, broader plans for reducing the long-term deficit.

The deal is expected to cut about $13 billion from what the president requested for the Departments of Labor, Education and Health and Human Services. The White House said it would maintain current enrollment levels in Head Start and keep maximum award levels in Pell Grants, but a top Republican aide said both points were still under discussion.

Aides from both parties said State Department and other foreign-aid programs were set $8 billion below the White House requestbut would still be around the $49 billion appropriated for 2010. Negotiators found savings in other areas, including $2.5 billion in transportation funding that was likely to be used for "earmarks,'' or funding targeted by lawmakers for home-state projects.

According to one Senate Democratic leadership aide, $17.8 billion of the cuts would come from mandatory programs. Brian Fallon, a spokesman for Mr. Schumer, said that strategy would be pursued in future deficit-reduction talks because Democrats believe domestic discretionary programs have been cut to the bone.

After White House and congressional leaders reached agreement on the fiscal 2011 budget, Congress approved another short-term spending bill to keep the government funded through Thursday at midnight.

The budget deal was needed because Congress never passed a full budget for the 2011 fiscal year, which is now half over. Overall discretionary spending would be set at about $1.05 trillion--down from $1.09 trillion in 2010. Mr. Obama's initial budget request for 2011 had called for an increase to $1.13 trillion.

Under the compromise, the Senate will hold separate votes this week on two measures: one to cut off funding for implementation of the health-care law and another to turn federal aid for family-planning programs into a block grant. Neither is expected to pass, but Republicans backers are eager to at least put senators on the record on those issues.

Although Democrats fended off the broad GOP attack on funding for the health-care law, the deal did reduce funding for some minor parts of the program. It cuts $2.2 billion slated to seed new nonprofit health-insurance cooperatives, or half the budget for that program this fiscal year, and cut out a piece of the law designed to allow a subset of lower earners to buy insurance plans in new exchanges slated to offer policies in 2014.

--Corey Boles, Janet Adamy and Siobhan Hughes contributed to this article.

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This page contains a single entry by CFED published on April 11, 2011 4:03 PM.

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