Senate Budget Chairman Judd Gregg (R-New Hampshire) and House Budget Chairman Jim Nussle (R-Iowa) have been in informal talks this week to bridge the gap between the House and Senate version of the FY2006 budget resolution. Gregg is under pressure from House conservatives to produce far larger cuts than the Senate included in its budget resolution. Gregg has indicated to Nussle that the Senate will consider cuts of up to $43 billion over five years which is the halfway mark between the House and Senate budget resolutions. However, Gregg is not guaranteed support at this number and it is bound to anger House conservatives who would rather see a number closer to the mandatory cuts in the House resolution of $69 billion.

Cuts to Medicaid continue to remain a big issue. During debate on the budget resolution, the Senate adopted an amendment offered by Senator Gordon Smith (R-Oregon) to strip instructions to the Finance Committee to produce $15 billion in budget cuts (the bulk of which was to come from Medicaid). More recently, 43 House GOP members signed a letter circulated by Congresswoman Heather Wilson (R-New Mexico) protesting up to $20 billion in Medicaid cuts.

House conferees for the conference committee will remain unnamed as the informal discussions between Gregg and Nussle continue.

Next week the House will consider a comprehensive energy bill while the Senate will continues to debate the fiscal 2005 supplemental spending bill (HR 1268), which has stalled over immigration-related amendments. Following passage of the supplemental, the Senate could consider bills related to welfare, child custody, and the conference report on the fiscal 2006 budget resolution, if an agreement is reached.