Senator Kay Bailey Hutchinson (R-TX) plans to propose an amendment to the FY 2003 Supplemental Appropriations Bill, intended to assist the struggling airline industry.

First, the amendment will reduce the federal passenger ticket tax from 7.5% to 5% for one year. The Department of Transportation general fund will reimburse the airline trust fund for lost revenues. Such a reimbursement is expected to cost about $1.8 billion.

Hutchinson’s amendment would also provide the airlines with $1 billion to cover security costs accrued since 9/11. Air carriers will work individually with the Department of Homeland Security to determine how much money each carrier is entitled to.

The amendment also extends the availability of federal war-risk insurance for another year. The policy was supposed to end on December 31, 2003.

Finally, Hutchinson’s amendment would make permanent the $100 million limitation on airline liability for third party damages from acts of terrorism. The amendment may be considered when the Senate beings mark-up of the supplemental appropriations bill on or about April 1st.

On the Senate side, the committee with jurisdiction over the airline industry is the Commerce, Science and Transportation Committee chaired by John McCain (R-AZ). McCain recently chided Delta Airlines for providing executives with million-dollar bonuses, while simultaneously laying off thousands of workers. McCain told reporters at that time that an airline aid package “might be in danger”.

In the House, Democratic Whip Steny H. Hoyer (MD) and House Transportation and Infrastructure Committee Ranking Member James L. Oberstar (D-MN) met with airline representatives March 27. Hoyer feels, "a healthy airline industry is key to a strong economy and our nation's security, so it is the responsibility of Congress to be a part of the solution--to not act is not an option." Oberstar stressed the need to relieve the great security burden placed on the airlines after 9/11. The Minnesota Democrat also feels the federal government has a responsibility to mitigate the adverse affect that rising fuel costs have had on the airline industry.

On the Republican front, an aide to Speaker of the House Dennis Hastert (R-IL) confirms that the Speaker supports some form of direct aid to the airlines in the supplemental appropriations bill, but did elaborate on specifics. House Aviation Subcommittee Chairman John Mica (R-FL) also supports some form of aid, but has advised lawmakers not to strip the airline trust fund of revenue to finance such aid. Mica feels the trust fund must remain intact to fund key airport infrastructure projects funded out of AIR-21.

The Senate just passed their $2.2 trillion budget resolution by a margin of 56-44. In the resolution, the administration's proposed tax cuts are cut in half from $726 million to $350 million. It also does not include another administration favored amendment that would call for the commencement of drilling in the Arctic National Wildlife Refuge.

The House passed their resolution last week by three votes. Both sides will meet for conference to resolve differents in both chamber's bills. The tax cut is expected to land somewhere in the middle: about in the $500 million dollar range.

The only Republican to vote against the bill today was Senator John McCain (R-Arizona) who is against any discussion of tax cuts during the ongoing war against Iraq.

Medicare officials are now estimating that because Medicare spending surged unexpectedly last year, Medicare beneficiaries will face a 12.4% increase in their premium. In addition, doctors' fees for treating Medicare patients will be cut by 4.2%.

This cut in doctors' fees comes just after President Bush signed legislation to increase Medicare spending for doctors' services by $54 billion over ten years. The prospect of a pay cut for doctors creates a political problem for President Bush and Congress. Medicare cut the average doctors' fee 5.4% last year, and many doctors say they cannot afford to take new Medicare patients if the government cuts their fees again.

In addition, members of Congress from both parties have promised to provide Medicare coverage of prescription drugs. However, even without new benefits, the cost of the program is growing rapidly.

Some of the increases in Medicare spending last year include the following:

• Inpatient hospital care, up 10 percent, to $104.9 billion
• Outpatient hospital services, up 10 percent, to $15.4 billion
• Skilled nursing homes, up 9 percent, to $14.6 billion
• Home health care, up 14 percent, to $10.5 billion
• Durable medicare equipment, including wheelchairs, up 20 percent, to $6.5 billion
• Hospice care, up 24 percent, to $4.6 billion

Yesterday, House Republicans tried to bring a bill to the floor that would establish a fund to compensate workers who become ill from smallpox vaccinations. The bill, introduced by Rep. Richard Burr (R-North Carolina), mirrors the administration proposal and a Senate bill (S 15) by Senator Judd Gregg (R-New Hampshire).

In attempting to bring the bill to the floor, they bypassed the House Energy and Commerce Committee. The bill is stalled in the Rules Committee, as Republicans and Democrats offered competing proposals for compensating lost wages. The Rules Committee adjorned last night calling for more amendments and postponing to today a decision on how to move forward.

President Bush called for 500,000 first responders to volunteer to be inoculated from a potential smallpox threat in light of heightened terrorist threats. As of mid-March, a little more than 20,000 workers have volunteered. The low response reflects concerns over the side effects and the lack of a federal compensation. Rep. Burr's bill would award a $262,000 lump sum to survivors in the event of death or permanent or total disability. It would reimburse individuals two-thirds of their salary up to a $50,000 lifetime limit for lost pay beyond the first five days of work missed.

Senator Gregg's proposal stalled last week in a dispute with Sen. Edward Kennedy (D-Massachusetts). The House Democratic proposal would increase compensation for lost pay to an annual payment of 75% of a worker's salary, up to $75,000. Democrats want the fund to be designated as mandatory spending. Republicans want to make any payments from discretionary funds.

Today, the full House Education and the Workforce Committee will consider H.R. 1261 which would reauthorize the Workforce Investment Act. The bill was approved by the panel's 21st Century Competitiveness Subcommittee on a 15-12 vote last Thursday.

The bill would eliminate some job-training programs and focus on math and reading skills for recipients. It consolidated 60 job-training programs into block grants allocated to states. It allowed adults seeking training to use vouchers to pay for services such as classes. It also creates personal re-emplyment accounts for unemployed individuals up to $3,000.

The Senate just voted 51-48 to cut the President's tax cut plan to $350 million dollars. Three Senate Republicans crossed party lines. Last week the House voted for the President's full plan estimated at more than $700 million dollars. The House and Senate will now meet in Conference to work out a compromise.

Senate Democrats were able to delay the adoption of the budget resolution until the Administration told Congress how much the war with Iraq would cost. In a supplemental being sent to Capitol Hill today, the Administration has indicated a nearly $75 billion price tag.

Today, the Senate is considering more than 50 amendments, the majority from Democrats in anticipation of Wednesday afternoon's adoption of the budget resolution (S Con Res 23). Once it is adopted, it will trigger a conference with the House who has already adopted its version of the measure.

Because of the large size of the supplemental, Senate Republicans are unlikely to try to reverse the adoption of an amendment introduced by Senator Russ Feingold (D-Wisconsin) to reduce the President's economic stimulus package by $100 billion.

Senator Kent Conrad (D-North Dakota) will offer an alternative budget blueprint. Senate Budget Committee Chairman Don Nickels (R-Oklahoma) will offer a number of amendments directed at increasing the tax cut number.

Today, President Bush is sending to Capitol Hill, an emergency funding request for nearly $75 billion dollars. The money, according to the President, is directly related to winning the war in Iraq.

The supplemental consists of $63 billion for defense which consists of military operations against Iraq, restocking ammunition, aid to coalition partners, extinguishing oil well fires and for intelligence. It consists of $8 billion for foreign aid and reconstruction which includes aid to Jordan, Israel, Turkey, Egypt, Afghanistan, the Philippines and Columbia, as well as money for Iraqi relief and reconstruction. The final $4 billion is targeted toward homeland security which includes aid to state and localities and federal operations.

Congress will likely act quickly on the President's request. But Democrats are bound to use the size of the supplemental to support their view that the proposed tax cuts are too large. For their part, the administration has asked lawmakers not to add money to the bill to fund their own priorities.

On March 21, the Senate passed an amendment to the budget resolution that would increase highway and transit spending over the next six years.

The amendment, introduced by Christopher S. Bond (R-Missouri), chairman of the Senate Environment and Public Works Committee Transportation and Infrastructure Subcommittee, would add $50 billion to highway spending and $10 billion to transit spending over the next years. Bond’s amendment, which passed by a margin of 79-21, amounts to a 28.9% increase in highway and transit spending over the original budget blueprint, which funded highway programs at $206 billion and transit programs at $44 billion over six years.

The Bond Amendment was co-sponsored by 18 senators, including Sen. Harry Reid (D-Nevada), the ranking member on Bond's subcommittee, Environment and Public Works Committee Chairman James M. Inhofe (R-Oklahoma), ranking member James M. Jeffords (I-Vermont), Senate Banking Committee Chairman Richard C. Shelby (R-Alabama) and ranking member Paul S. Sarbanes (D-Maryland).

One prominent opponent of the amendment was Senate Budget Committee Chairman Don Nickles (R-Oklahoma), who objected to highway and transit spending exceeding revenues generated by user fees. Nickles added that dipping into the general transportation fund for such programs would be a mistake. Senator Bond countered that Congress should allow the highway trust fund to capture more revenues like the ethanol tax, spend down the balance and be able to retain the interest on trust fund balance. According to Bond, "the administration's 2004 budget provides allocations that remain wholly inadequate for conquering the ever growing needs of the people who use our nation's transportation infrastructure". The Missouri Republican also cited a statistic that every $1 billion in transportation spending equals 47,500 jobs.

Finally, the Senate passed an amendment introduced by Senate Appropriations Committee ranking member Robert Byrd (D-West Virginia), which would more than double the administration's request of $900 million for Amtrak and bring the total allocation to just more than the 1.8 figure, which is what Amtrak had initially requested. The amendment passed by a 51-49 margin, with Zell Miller (D-Georgia) being the only democrat in opposition. Republicans Lincoln Chafee (R-Rhode Island), Arlen Specter (R-Pennsylvania), Olympia Snowe (R-Maine) all broke party line and supported the amendment. Senator Byrd said the money will "allow the railroad to make some long-deferred capital investments to improve Amtrak's reliability and ensure the continuation of safe and timely rail service".

Upon Senate passage of the budget blueprint, the resolution will head to Conference, where differences between the Senate and House versions will be ironed out.

Early this morning, voting primarily along party lines, the U.S. House of Representatives approved President Bush's budget plan that would provide large tax cuts. It is a $2.2 trillion budget for fiscal year 2004 and includes $726 billion in tax cuts.

The Republican majority in the House approved the budget plan by a vote of 215-212.

The Senate intends to vote on a completely different version of the budget measure later today. A group of moderates who want to limit the tax cut to about half of what the president wants seemed to lack the votes to prevail because they could not bring around a small group of senators who refuse to vote for any tax cut at all. If it fails, then the full tax cuts will be part of the Senate plan.

Neither the House nor the Senate resolution allocates funds to meet the cost of the war against Iraq or its aftermath. But there is no doubt that at least this year, Congress will approve spending as much money as the president asks for in a supplemental which the Administration is expected to send to Capitol Hill as early as next week.

In a report released yesterday, rising health care costs have helped speed the projected insolvency of the Medicare program, but changes in the nation's payrolls have extended the solvency of the Social Security program by a year. It was part of an annual report issued yesterday by the trustees who monitor the fiscal health of the Medicare and Social Security system.

Medicare will exhaust the money in its trust fund by 2026. Last year, it was reported that it would have enough money until 2030, but its solvency has been harmed as medical costs have risen and revenue from payroll taxes has dwindled.

Social Security is largely unchanged because of lower growth in wages and more immigrants working and paying payroll taxes.

Both political parties have used the forecasts as ammunition to for their views on how Medicare and Social Security systems should function.

Republicans who favor a larger role for private insurers are likely to say the worsening finances mean that Congress should move to stop increased government spending. Democrats will probably argue that since Medicare is still solvent until 2026, Congress should be in no rush to make major changes.

Senate Republicans and Democrats began the budget debate yesterday and the impact of the impending war stood front and center. At issue were whether the cost of the war should be factored in the discussion. Democrats, including Senator Edward Kennedy (D-Massachusetts) called for cutting the size of President Bush's 11-year, $726 billion economic growth package, in part to accomodate the potential cost of the war.

Senator Michael Enzi (R-Wyoming) felt the war should be treated as "a one-time emergency" and not part of the baseline budget.

Senate Republicans are aiming to complete debate on their version of the budget resolution and vote on some amendments this week. They also expect that a final vote will have to wait until the week of March 24.

The House will begin debating its draft budget resolution March 20, but the schedule is likely to change if the war commences.

If war breaks out, the Administration is expected to send up a supplemental spending request to the Hill. While there are no precise figures of how large the supplemental will be, there are estimates that it will be as large as $100 million.

It appears that Republicans in the Senate do not have the votes to block a Democratic amendment to strip language in the budget resolution that would allow drilling in the Arctic National Wildlife Refuge (ANWR)

If, as expected, Democrats are successful removing the ANWR language, it also appears that Republicans will not attempt to place language in the Senate version of energy legislation which is expected to be prepared next month.

If both of these events occur, it will signal the end of the debate on oil drilling in ANWR, a big priority for the Bush administration. Republicans were hoping to push this through via the budget process because it would be filibuster-proof and require fewer votes to pass.

Opponents to ANWR are not claiming success yet as they still see a fight in the House and in conference.

On March 13, DOT Inspector General Kenneth M. Mead testified before the House Appropriations Committee Transportation and Treasury Subcommittee.

In his lengthy testimony, Mead informed lawmakers that Amtrak would likely face another financial crisis later this year. While Amtrak received its grant request of close to $1.2 billion in FY 2003, Mead alerted the subcommittee, "lower-than-predicted revenues for the first 4 months of FY 2003 combined with more aggressive budget targets in the second half of the year means that Amtrak faces a significant challenge to avoid another cash crisis similar to the one experienced last summer."

Mead did however offer much praise for Amtrak President and CEO David Gunn. While lauding some of Gunn's initiatives aimed at improving efficiency and transparency, the inspector general warned that Amtrak's financial projections would not be realized in FY 2003. In addition, Mead told subcommittee members that the FY 2004 budget request of $1.812 billion would fall short of meeting Amtrak's short-term needs. Mead exhorted lawmakers that Amtrak's FY 2004 budget request is based on two contingencies: productivity enhancements from work rules changes and $206 million in additional savings from actions as yet undefined. According to Mead, it is unclear at this moment what kind of concessions Amtrak will receive from labor in contract negotiations. Finally, Mead attempted to disprove the myth that cutting long-distance routes will save Amtrak significant money in the short-term: "because of labor severance payments and other shutdown costs, it is unlikely there would be any short-term savings."

The DOT Inspector General sees FY 2003 as another difficult year for Amtrak, which has already lost $73 million more in the first 4 months of FY 2003 than in the first 4 months of the prior fiscal year. Mead also mentioned the substantial growth in debt over the past 5 years and the continued deferment of track maintenance and equipment repairs as additional burdens for Amtrak in the coming year.

New regulations enacted in the FY 2003 omnibus appropriations law require DOT to oversee the finances of the embattled rail corporation. Also, Amtrak must now apply to DOT for grants that would cover operating losses for long distance routes. Finally, by May 1, Amtrak must submit to Congress a business plan, which details how operating and capital costs will be funded in FY 2003.

After admonishing legislators that an Amtrak crisis would likely occur later in the year, Mead advised Congress to "get on with the reauthorization process".

Republicans may scale back tax cuts or abandon many of the spending cuts they had hoped would fund them due to an open revolt from moderate House and Senate Republicans.

Both chambers are scheduled this week to vote on the adoption of the budget resolutions which are the blueprints that would establish the size of any tax cut and limits on federal spending for 2004 and beyond. Last year, these resolutions failed to be adopted, eventually causing a delay which forced most FY03 spending bills to be passed this January.

It is unclear whether either body can pass the plans that were approved last week by their respective budget committees. Moderates of both parties have been bolstered because of concern surrounding the prospects of war and its unknown costs.

Both resolutions fund nearly all of the $1.6 trillion in tax cuts proposed while giving special treatment to the economic growth plan to help it pass through the Senate. Lawmakers expressed concern in both Houses about the deficit - both resolutions call for a balanced budget in 2010 in the House plan and 2013 in the Senate plan. This is different from the President's plan which does not address the issue of deficits.

Neither plan discusses funding for any upcoming war.

House leaders have been trying to get the votes needed to pass their resolution. But simulataneously, they have been trying to come up with an alternative plan which might re-write parts of the the resolution - particularly the Medicare cuts. One plan may be to allow the House plan to be defeated on a procedural vote and then order the Senate version to the House floor as a substitute. That way, House Republicans won't be forced to take politically sensitive votes on key potential cuts.

Senator Zell Miller (D-Georgia) has offered legislation that would lower the threshold of a filibuster on successful cloture votes.

Currently 41 Senators can block just about any piece of legislation or nomination moving on the Senate floor. Last week, Senator Miller introduced legislation that would keep the 60-vote requirement intact on the first cloture vote. But on the second cloture vote, it would decrease to 57 votes and on the third vote, only 54 votes would be needed to break a filibuster. If a fourth vote is called a simply majority, or 51 votes, is all that would be needed.

Senators Tom Harkin (D-Iowa) and Joe Lieberman (D-Connecticut) made a similar effort in 1995, but were defeated soundly. The filibuster is the most potent weapon Senate Democrats currently have in their arsenal.