Dec 9, 2014 5:03 PM

Time runs short for $1.1 trillion spending bill

The Associated Press

WASHINGTON (AP) Time running short, Republicans and Democrats reached for elusive agreement Tuesday on a $1.1 trillion spending bill to avoid a government shutdown and delay a politically-charged struggle over President Barack Obama's new immigration policy until the new year.

As obstacles to a deal dwindled, officials said the outcome was uncertain for an emerging plan that would permit benefit cuts for as many as 1.5 million retirees at economically distressed multiemployer pension plans.

"The federal government's going to run out of money in two days. ... We've been trying to work with Republican leaders to avoid a shutdown," Senate Majority Leader Harry Reid of Nevada said in midafternoon as final negotiations dragged on.

The GOP high command said they wanted nothing of the kind, and Speaker John Boehner said he expected a vote in the House on the spending bill by Thursday. Failing that, officials said they would prepare a short-term measure to assure uninterrupted operations of government for a day or two to provide enough time for the larger bill to clear both houses.

The events coincided with the end of an era of Democratic control of the Senate. Republicans will have a majority in January after gaining nine seats in midterm elections, and newly elected GOP senators-elect participated in closed-door strategy sessions during the day.

Before time runs out on his majority, Reid said he wanted to assure confirmation of nine more of Obama's judicial nominees and approve the appointment of Vivek Murthy as surgeon general.

Also on Congress' must-do list is legislation to renew a series of expiring tax breaks, and a bill to authorize the Pentagon to train and equip Syrian rebels to fight Islamic State forces in the Middle East.

Passage of the spending bill would assure funding for nearly all of government through the Sept. 30, 2015, end of the fiscal year. The sole exception would be the Department of Homeland Security, which would be funded only through late winter.

That would give the new Republican-controlled Senate a chance in February or March to demand concessions from Obama on the issue of immigration without risking a possible government shutdown. To the anger of most GOP lawmakers, the president announced recently the administration would suspend the threat of deportation for about 4 million immigrants living illegally in the country, as long as they are otherwise law-abiding.

Not everyone agreed with the strategy. Some conservative lawmakers demanded a change in the spending measure to deny the use of federal funds to carry out the president's new policy. The leadership ruled otherwise, gambling that even with conservative defections, enough bipartisan support existed for the funding bill to assure its passage.

House Republicans removed one obstacle to passage of the spending measure by announcing they would pass legislation separately to renew a requirement for the federal government to assume some of the insurance risk in losses arising from terrorism.

In talks with Sen. Chuck Schumer, D-N.Y., Republicans led by Rep. Jeb Hensarling, R-Texas., agreed to the renewal, but said they wanted to roll back portions of the 2010 Dodd-Frank law that tightened federal regulation on the financial sector.

The stand-alone bill seemed likely to clear the House, but its fate in the Senate was uncertain.

By contrast, disagreement over an emerging proposal relating to multi-employer pension funds was not along party lines.

Officials said the talks led by Rep. John Kline, R-Min., and George Miller, D-Calif., were designed to preserve benefits of current and future retirees at lower levels than currently exist, but higher than they would be if their pension funds ran out of money.

Also driving the talks was concern over the financial fate of the fund that assures multi-employer pensions at the government's Pension Benefit Guaranty Corp. The agency said in its most recent annual report that the fund's deficit rose to $42.2 billion in the fiscal year ending Sept, 30, up from $8.3 billion the previous year, and that the likelihood of its bankruptcy is 90 percent by 2025.

Agency figures show as many as 1.5 million retirees could be affected by any change in law to permit a reduction. An estimated 400,000 of them receive benefits from the Teamsters' Central States Pension Fund.

The spending bill was a work in trade-offs carried out under strict budget caps negotiated in past struggles between Republicans and the White House.

Republicans targeted domestic agencies such as the IRS and the Environmental Protection Agency for cuts while Democrats sought to preserve Amtrak subsidies and Transportation Department "TIGER" grants to state and local governments for infrastructure projects.


Associated Press writers Connie Cass and Erica Werner contributed to this report.


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