The cancellation of the July 15 meeting of House and Senate confeees on the TEA-21 reauthorization did not cancel the behind-the-scenes manuevering in search of an agreement on the funding level.

We are receiving widely different reports from key staffers in the House and Senate. House GOP staff are hoping that a conversation late on the 15th between Chairman Don Young and the White House produced a positive signal from the administration that they could live with a funding level around $295 billion. "Live with" under one scenario we heard could mean the President would veto the bill, but not fight an attempt to override his veto.

We continue to be skeptical the White House will back down at all on its insistence for nothing more than $256 billion. It is hard to conceive of President Bush standing by while the only veto of his administration is overridden by a GOP-controlled Congress.

Meanwhile, Senate Democratic staff indicated to us yesterday they are holding firm at nothing below $318 billion as an acceptable funding level. If they are able to stand firm on that and are not excluded from the process as it unfolds, it is clear there will be no bill before the election.

The bottom line is we end the week exactly where we started. There is no number from the House, no sign of compromise from the White House and continued pressure from the Senate for a response to their offer of $318 billion.

Rep. Jim Oberstar said yesterday that if there isn't a deal by the time Congress leaves for recess on July 23, the chances for a bill this year are slim. The man from Minnesota knows whereof he speaks.

More details to follow as the situation warrants.