By Larry Jones
March 7, 2011

Members of Congress, with the March 4 expiration date on spending authority fast approaching and with Democrats and Republicans deeply divided over government spending, agreed on a compromise that will keep the federal government operating through March 18. This gives the Administration and Congressional leaders more time to work out an agreement on a long-term spending measure that will fund federal programs through the remainder of Fiscal Year 2011, which ends September 30. Just two days before the current spending bill was set to expire, President Barack Obama signed into law another short-term continuing resolution on March 2, averting a government shutdown.

The measure calls for $4 billion in cuts, mostly from eliminating $2.7 billion in earmarks and $1.24 billion from cuts in eight programs targeted by the Administration for termination in its 2012 budget proposal. Savings from earmarks include $996 million in energy and water projects, $994 in labor, health and human services and education programs, $513 million in transportation and housing programs, and $265 million in Homeland Security. Savings from terminations include $650 million in highway funds, $250 in the Striving Readers program, $88 million in Smaller Learning Communities, $75 million in Election Assistance grants, $66 million in Even Start, $664 million in LEAP Student Grants, $30 million in the Smithsonian Institution Legacy Fund and $29 million in the Broad Band Direct Loan Subsidy.

Action on a longer-term spending measure has been stalled due to partisan disagreement over spending cuts and policy riders. The House passed a long-term continuing resolution on February 19 that would fund federal operations through September 30, but the President and Democratic leaders in Congress strongly oppose the $62 billion in cuts called for in the bill (H.R. 1), and policy riders that would block the use of funds for implementation of the new health care reform law, planned parenthood and environmental regulations.

The Conference of Mayors strongly opposes the significant cuts called for in H.R. 1, including a 62.5 percent cut (from $3.99 billion to $1.5 billion) in the Community Development Block Grant program; zero funds for the Energy Efficiency and Conservation Block Grant program; elimination of the high speed rail program that amounts to a $1 billion cut; a cut in one Transit account from $2 billion to $1.57 billion; a $1.4 billion reduction in the Clean Water State Revolving Fund; elimination of all new funds for Workforce Investment Act programs; a $758 million cut in the Women, Infants and Children program; a $400 million cut in the Low-Income Heating and Energy Assistance Program; and a $405 million cut in the Community Service Block Grant program.

The President and Democratic leaders in Congress have voiced strong opposition to the cuts in H.R. 1. The President indicated on March 3 that he would be willing to consider an additional $6.5 billion in cuts over the $4 billion recently approved in short-term continuing resolution. This is nowhere near the level of cuts Republican leaders are seeking and it is unclear how negotiations will play out over the next two weeks. Also, the President has made it clear there is no chance of reaching a bipartisan compromise on the policy riders that would block spending on health care reform, planned parenthood and environmental regulations. These policy provisions are very important to Representatives, who were elected last November on a promise to work to repeal the health care reform law.

The White House will play a key role in negotiating a long-term continuing resolution. President Obama recently called on Congressional leaders in both parties to begin negotiations on a long-term spending bill. He asked Vice President Joseph Biden, who led tough negotiations on the tax cut legislation and brokered a deal that was finally approved last year, to lead the talks.