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updated 12/8/2010 6:52:21 PM ET 2010-12-08T23:52:21

Democrats controlling the House muscled through legislation Wednesday night that would freeze the budgets of most Cabinet departments and fund the war in Afghanistan for another year.

The bill would cap the agencies' annual operating budgets at the $1.2 trillion approved for the recently finished budget year — a $46 billion cut of more than 3 percent from President Barack Obama's request.

It includes $159 billion to prosecute the wars in Afghanistan and Iraq next year.

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The 423-page measure, opposed by Republicans, conservative Democrats and some anti-war lawmakers, narrowly passed by a 212-206 vote. The budget-freeze bill wraps a dozen unfinished spending bills into a single measure.

The bill, combined with a massive measure to extend the Bush-era tax cuts, extend unemployment benefits and cut the payroll tax, represents the bulk of Congress' unfinished work as the lame-duck session approaches its close.

A widely backed food safety bill is hitching a ride on the legislation. The measure passed the Senate by a 73-25 vote last week but got caught in a snag because it contained revenue provisions that, under the Constitution, must originate in the House.

Story: Obama facing tough sell in own party on tax deal

Exceptions to the freeze
There are many exceptions to the freeze. Health care programs for veterans and the military would get a boost, and the measure adds $5.7 billion to the Pell Grant program for low-income college students to maintain the maximum grant at $5,550. People serving in the military would get a 1.4 percent pay raise, but civilian federal workers would have their salaries frozen, as requested by Obama last week.

Senate Democrats are working on a different approach that would provide slightly more money and would include thousands of pet projects sought by lawmakers. It's unclear whether that measure can get enough support from GOP old-timers to survive a filibuster by party conservatives. The House bill is free of such "earmarks."

The measure passed over Republican protests that it still spends too much money and that it caps an unprecedented collapse of the federal budget process in which not a single one of the 12 annual spending bills has yet passed Congress. Ten of 12 House bills haven't even been made public.

House Republicans wanted a short-term measure to punt the unfinished budget business into next year, when they will assume the majority and have more leverage to seek concessions from Obama on spending.

House Appropriations Committee Chairman David Obey, D-Wis., said the legislation would "salvage some investments which over the long haul just might create more jobs than a tax break for millionaires."

Obey was able to find money for some Democratic priorities because other accounts were cut, especially for the census and military base closings, which are $11 billion below fiscal 2010 levels.

That allowed Obey to maintain increased federal air marshal presence on international flights, add money for the Indian health Service, and provide $550 million for Obama's signature "Race to the Top" program that provides grants to better-performing schools.

The budget for high-speed rail would take a cut as would Obama's budget for construction of new federal buildings. But housing subsidies for the poor would get an increase, as would grants to localities to shelter the homeless.

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The underlying bill would provide the Pentagon $513 billion for core operations, which is a 1 percent increase to cover pay and health care, but $17 billion less than requested by Obama in February.

The Homeland Security Department would see its budget frozen rather than rising almost 3 percent as Obama sought.

Foreign aid programs, however, would receive a $2.2 billion — more than 4 percent — increase to fund counterinsurgency programs by the Pakistani government, help stabilize Iraq and meet long-standing commitments to Israel and Egypt.

The bill also contains $624 million to implement the nuclear weapons treaty with Russia, known as New START, that's pending before the Senate.

'Omnibus' measures
In the Senate, Appropriations Committee Chairman Daniel Inouye, D-Hawaii, backed by Democratic leaders, has fashioned an "omnibus" spending measure — providing almost $20 billion more than the House bill — that he wants to substitute for the measure being passed across the Capitol.

Such omnibus measures have been a routine but oft-criticized way for Congress to wrap up its unfinished work. Only two spending bills have passed the House and not a single one has passed the Senate.

Senate Minority Leader Mitch McConnell, R-Ky., opposes Inouye's move, but GOP members of the Appropriations Committee, such as Sens. Thad Cochran of Mississippi and Lisa Murkowski of Alaska, are open to the idea.

It's not clear how strongly McConnell will push against the omnibus measure, however, and key McConnell ally Robert Bennett, R-Utah, says he prefers an omnibus to Obey's approach of "locking in" most of last year's policies and funding levels and predicted several Republicans would break with GOP leaders to advance it. But some Democrats may join with GOP conservatives to oppose the omnibus measure.

Obey said he supports an omnibus measure rather than his more austere bill, but said he's not sure the Senate can pass it.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Obama riles Dems in battle over Bush-era taxes

  1. Transcript of: Obama riles Dems in battle over Bush-era taxes

    BRIAN WILLIAMS, anchor: Now we turn to the battle over taxes. Taxes at Bush -era rates that President Obama wants to extend as part of a deal, which has riled some fellow Democrats . Kelly O'Donnell following this all day, with us tonight from the Capitol . Hey, Kelly , good evening.

    KELLY O'DONNELL reporting: Hi, Brian. And Democrats are really in turmoil over this, and the White House is turning up the pressure. The vice president was back here today to face angry House Democrats who say they will not vote for it because they believe it gives away too much to high earners and wealthy families who are planning for estate taxes. Now, the White House says if this doesn't pass the country could slip into double-digit recession. That is a big worry. And the White House is using a new PR offensive, using its e-mail list to send out notices today from mayors and governors, people all across the country who favor this, as a way to try to turn up the pressure on Democrats here who do get to vote.

    Brian: Kelly O'Donnell on the Hill tonight. Kelly , thanks.

    WILLIAMS:

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