Yesterday Republican members of the Senate Appropriations Committee approved the below plan to restructure the committee. The plan eliminates only one subcommittee and restructures the jurisdiction of several others. Although the plan is not as far reaching as one adopted earlier this year by the House Appropriations Committee, Senate Appropriations Chairman Thad Cochran (R-Mississippi) believes the new structure should enable the Senate and House panels to work smoothly together on the 13 annual spending bills.

AGRICULTURE, RURAL DEVELOPMENT (8-7)

Senators Bennett, Cochran, Specter, Bond, McConnell, Burns, Craig, Brownback

COMMERCE, JUSTICE, & SCIENCE (8-7) (*increased from 7-6)

Senators Shelby, Gregg, Stevens, Domenici, McConnell, Hutchison, Brownback, Bond.

DEFENSE (10-9)

Senators Stevens, Cochran, Specter, Domenici, Bond, McConnell, Shelby, Gregg, Hutchison, Burns.

DISTRICT OF COLUMBIA (3-2)

Senators DeWine, Cochran, Allard.

ENERGY & WATER (9-8) (*increased from 7-6)

Senators Domenici, Cochran, McConnell, Bennett, Burns, Craig, Bond, Hutchison, Allard.

HOMELAND SECURITY (9-8)

Senators Gregg, Cochran, Stevens, Specter, Domenici, Shelby, Craig, Bennett, Allard.

INTERIOR & RELATED AGENCIES (8-7)

Senators Burns, Stevens, Cochran, Domenici, Bennett, Gregg, Craig, Allard.

LABOR, HHS, & EDUCATION (8-7)

Senators Specter, Cochran, Gregg, Craig, Hutchison, Stevens, DeWine, Shelby.

LEGISLATIVE BRANCH (3-2)

Senators Brownback, DeWine, Allard.

MILITARY CONSTRUCTION & VETERANS AFFAIRS (6-5) (*increased from 5-4)

Senators Hutchison, Burns, Craig, DeWine, Brownback, Allard.

STATE, FOREIGN OPERATIONS (8-7)

Senators McConnell, Specter, Gregg, Shelby, Bennett, Bond, DeWine, Brownback.

TRANSPORTATION, TREASURY, JUDICIARY & HUD (10-9) (*increased from 8-7)

Senators Bond, Shelby, Specter, Bennett, Hutchison, DeWine, Brownback, Stevens, Domenici, Burns.

The House Committee on Transportation & Infrastructure today approved for floor consideration H.R. 3 - the "TEA-LU" legislation. The mark-up was speedy and no amendments were offered. The Chairman put before the committee an "Chairman's Mark" that included some minor revisions to the original version of the bill as introduced a few weeks ago. Changes to the introduced bill relating to the highway funding formula were not included in the chairman's version. It is expected a "committee amendment" will be offered on the floor of the House that will include provisions on the highway formula, Buy America in the transit program and other topics.

Here is the text of the Chairman's Mark from today. It contains a list of 3315 "High Priority Projects" in the highway program. We have the project list and are providing our clients with information on projects of interest included on the list.

Floor consideration is expected as early as March 9. We will keep our clients posted on developments.

Today the Workforce Investment Act reauthorization legislation is on the House floor. The Democratic leadership expects it to be approved on a party line vote with the Republicans voting for it and the Democrats voting against, with a possible handful of exceptions.

The measure includes two notable provisions. One is a provision that would allow "faith-based" groups that receive job-training grants to use religious preferences in hiring. Most Democrats oppose this provision, concerned that it promotes religious discrimination with the use of federal funds. This measure will likely face great opposition in the Senate.

The second provision would combine several job training programs into a single $3 billion block grant program and give governors more discretion over how such funds are spent. Some members are concerned that beneficiaries of existing programs could lose funding under the proposal.

Also in the bill is an initiative to fund partnerships between community colleges and employers in high-demand industries as well as a pilot program to provide personal re-employment accounts to unemployed workers. Congress had refused to fund the $50 million Bush voucher proposal, so the Labor Department announced in September it was using $9 million in discretionary funds to set up a pilot program in nine states. Seven states now participate in the program

Governors attending the National Governors Association conference in Washington this week met with President Bush to discuss Medicaid. Governors and administration officials expressed doubt that they could reach a quick agreement on a package of cost saving changes in the health care program.

Health and Human Services Secretary Michael Leavitt has urged governors to embrace a number of program changes to save money and has urged them to move quickly to present a united front on Capitol Hill.

The rapid growth in Medicaid has severely strained state budgets and governors of both parties say the program must be restructured to save money and provide better health care for low-income Americans.

Governors are wary of making a deal without knowing more about whether they can fend off cuts the size Bush has recommended in his new budget. President Bush has recommended $60 billion in Medicaid cuts over the next ten years.

The Medicaid issue is a bipartisan one. Both Republican and Democrats face the same problems, as rising enrollment and growing health care costs have forced state executives to squeeze the program in the past few years. Governors, however, are divided over strategy.

Governor Leavitt told the governors that “there is not as much desire in the halls of Congress for a Medicaid debate and discussion” as there is in the states and that progress will require a consensus solution from the governors and the administration.

Some governors are concerned about locking themselves into a number, rather than looking at a broad array of reform that in turn will drive the budget number.

President Bush today spoke to the nation's governors, saying that he would work with them to reduce the costs of Medicaid, which has been increasingly straining state budgets. From the Post this afternoon:

Before the White House meeting, governors said they opposed Bush's proposal to cut some $40 billion from the system. They also wanted the ability to experiment in order to lower costs. Many were encouraged by parts of the administration's budget proposal that would give states more flexibility.

"We want Medicaid to work," Bush told the governors before a brief, private question-and-answer session. "The system needs to be reformed and we want to work with governors."

But the one detail Bush emphasized was his plan to cut federal dollars in an effort to stop state Medicaid accounting practices that the administration contends cheats taxpayers.

Many state leaders say the money derived this way is essential. Federal officials say it artificially inflates health care prices to bring in more federal cash, which states sometimes use for other purposes.

Restraining the growth of Medicaid payments is a big issue for states, who have seen the program begin to take up over 20% of their budget each year.

Over on our analysis side we've got a look at the latest news surrounding the highway funding minimum guarantee provisions for the re-authorization of TEA-21. Be sure to check it out.

Here's the list of all the Appropriations Subcommittee Deadlines in the House:

The House Appropriations Committee Subcommittee on Transportation, Treasury and HUD has published the form they want filled-out for each earmark request in the fiscal 2006 cycle. Clients can go to the Analysis side to see the document itself.

Congress, governors and the new Secretary of Health and Human Services began negotiations yesterday on the future of Medicaid. Congress and the governors are trying to develop a relationship like the one that produced the changes in federal welfare law in 1996.

Sen. Grassley, (R-Iowa), Chairman of the Senate Finance Committee said that there needed to be some immediate savings in Medicaid and also enough flexibility for states to absorb the changes but it would be very difficult to reach agreement this year.

Medicaid spending has increased by 63% in the last five years, so that state and federal outlays together now total more than $300 billion a year. With no change in current law, the Congressional Budget Office predicts the cost will grow an average of 7.7% a year in the next decade.

Governors want to slow the growth of Medicaid, which they say is eating up state tax revenues they want to use for education.

Michael Leavitt, Secretary of Health and Human Services said the Bush administration wants to give states more freedom to decide who gets what benefits. At the same time, Sec. Leavitt said, the administration will crack down on what he described as abusive practices used by many states to maximize the federal Medicaid money they receive.

Governors fear that Congress, in an effort to reduce the federal deficit, will limit federal Medicaid spending without relieving the states of any of their legal or financial obligations.

President Bush proposes to cut $60 billion from projected federal Medicaid spending of $2.8 trillion in the next decade.

Leavitt has said that states should be free to provide less comprehensive benefits to “optional populations”, whom they are not required to cover.

This morning President Bush named John Negroponte to occupy the position of National Intelligence Director. Negroponte is currently serving as the Ambassador to Iraq.

The National Intelligence Director will have budgetary and operations control over the entire Intelligence Community, comprising several different agencies including the NSA, CIA, NRO and DIA. Bush named the current chief of the NSA, Gen. Michael Hayden, to be Negroponte's deputy at the new position.