Obama Pushing Senate to Hold Up Budget Bill Over Payroll Tax Cut

WASHINGTON – President Obama is pushing Senate Democrats to use a critical year-end spending bill as political leverage to gain Republican backing for his calls to extend payroll tax cuts and unemployment benefits due to expire at the end of the year.

An administration official said the president called Senate Majority Leader Harry Reid, D-Nev., over the weekend and urged him not to let Congress pass the massive $1 trillion spending package and go on vacation until an agreement is reached on the tax cuts and the unemployment benefits.

The White House is concerned that if the spending bill were to pass, House GOP leaders could orchestrate House passage of a partisan version of the payroll tax and jobless benefits legislation that would be unacceptable to Obama and Senate Democrats -- but leave them in a political pickle -- and then leave Washington.

"They're connected politically. We need to do it all before we go home," said Sen. Dick Durbin, D-Ill.

The official spoke on the condition of anonymity in order to discuss internal administration strategy.

The spending bill had been gaining bipartisan support in a combative Congress. But Reid's White House-backed maneuvering could jeopardize efforts to approve new spending before the current government funding runs out this weekend. That means lawmakers could be faced with the prospect of passing a stopgap measure to keep the federal government operating -- or risk a partial government shutdown on Saturday.

Lawmakers had by Monday reached agreement on most issues on the $1 trillion spending bill, which cuts agency budgets but drops many policy provisions sought by GOP conservatives. It chips away at the Pentagon budget, foreign aid and environmental spending but boosts funding for veterans programs and modernizing the U.S. nuclear arsenal.

But Senate Democrats said a claim by House Appropriations Committee Chairman Harold Rogers, R-Ky., that a pact had been sealed were incorrect, citing remaining disputes over policy towards Cuba, abortions in Washington, D.C., and Energy Department rules that would ban sales of most incandescent light bulbs.

The measure generally pleases environmentalists, who succeeded in stopping industry forces from blocking new clean air rules and a new clean water regulation opposed by mountaintop removal mining interests. House Republicans were pressing hard against a White House veto threat over a provision that would roll back administration efforts to ease restrictions on Cuban immigrants on traveling to the island and sending cash back to family members there.

On spending, the measure implements this summer's hard-fought budget pact between the president and Republican leaders. That deal essentially freezes agency budgets, on average, at levels for the recently completed budget year that were approved back in April.

Drafted behind closed doors, the proposed bill would provide $115 billion for overseas security operations in Afghanistan and Iraq but give the Pentagon just a 1 percent boost in annual spending not directly related to the wars. The Environmental Protection Agency's budget would be cut by 3.5 percent. Foreign aid spending would drop and House lawmakers would absorb a 6 percent cut to their office budgets.

The bill also covers money for combating AIDS and famine in Africa, patrolling the U.S.-Mexico border, operating national parks and boosting veterans' health care.

Rogers said bargainers had struck an agreement that he hoped to unveil Tuesday. But other lawmakers insisted a handful of issues remain to be finalized.

A House vote is expected Thursday and the Senate is likely to follow in time to meet a midnight Friday deadline before a stopgap funding measure expires.

Negotiations on the omnibus had largely been smooth and businesslike, a sharp contrast with the ongoing partisan brawl over Obama's demand that Congress extend jobless benefits and a cut in the Social Security payroll tax. The House is slated to vote on a GOP-friendly version of the payroll tax cut Tuesday, and negotiations with the Democratic-controlled Senate on a compromise measure have yet to begin.

Rogers was pushing until the end to block clean water rules opposed by mining companies that blast the tops off mountains, to no avail. Top Appropriations Committee Democrat Norm Dicks of Washington, when asked if the mountaintop mining rider was still a concern, said, "It would be if it were in" the final legislation.

Dicks also predicted failure for several GOP attempts to block the EPA's authority to issue greenhouse gas regulations and new limits on hazardous emissions under the Clean Air Act.
House GOP leaders pressed riders to block the administration's 2009 policy lifting restrictions on travel and money transfers by Cuban-Americans to families remaining in Cuba, and some Democrats backing the administration policy seemed resigned to defeat.

On spending, the measure generally consists of relatively small adjustments to thousands of individual programs. Agencies like the Border Patrol and Immigration and Customs Enforcement would get a boost within the Homeland Security Department, while GOP defense hawks won additional funding to modernize the U.S. nuclear weapons arsenal. The troubled, over-budget, next-generation F-35 fighter plane program would be largely protected.

Democrats won a modest increase in funding for schools with large numbers of disadvantaged students.