Congress is expected to pass a month-long extension of current surface transportation programs before the Memorial Day break begins at the end of this week. That gives lawmakers one more month to complete the conference committee on the long-term reauthorization bill by the July 4th recess. The Republican leaders of the House Ways and Means and Senate Finance committees met yesterday, taking the first step toward reaching a compromise on funding for a multiyear transportation reauthorization bill (H.R. 3). The two are trying to compare the funding provisions in the House $283.9 billion highway, transit, and highway safety reauthorization, with those in the Senate $295 billion measure. The administration has made it clear that it will not support any measure higher than the House level.

While conferees still have not been named, the month-long extension will be voted on in the House on May 26 and possibly in the Senate on the same day.

The House passed the $29.75 billion fiscal year 2006 Energy and Water appropriations bill yesterday with a vote of 416-13. One provision in the bill may mean that future Army Corps of Engineers projects will proceed at a slower pace by limiting the agency’s spending flexibility by exerting tighter control over how the corps transfers money from one project to another and allocates federal dollars for multi-year contracts..

Under current practice for example, the corps may issue a $300 million contract with congressional appropriations of $50 million a year until the project is done. A contractor could proceed with the project that year and use its own money once the $50 million had been spent, with the expectation of being reimbursed. The corps has traditionally done this by shifting money from one project to another. The language approved yesterday could prevent work from progressing once a project passes that $50 million mark, stalling projects and resulting in unnecessary and costly project starts and stops, according to critics.

In addition, House Energy and Water Appropriations Subcommittee Chairman David Hobson (R-Ohio) and ranking member Pete Visclosky (D-Indiana) inserted a measure into the bill that would restrict the corp's ability to divert money from one project to another.

A last minute compromise by a group of 14 moderate Senators will prevent Majority Leader Bill Frist (R-Tennessee) from implenting the "nuclear option" he was seeking. Frist's move would have taken away the minority's ability to filibuster judicial nominations. Last night, seven Republicans and seven Democrats signed a "memorandum of understanding" in which the Republicans pledged not to back Frist's parliamentary attempt at the nuclear option and Democrats pledged to stop blocking three previously filibustered nominees. In the MOU, Democrats retain the ability to filibuster nominees in "extraordinary circumstances" - the definition of which is left open to each individual senator.

The Senate Health, Education, Labor and Pensions Committee will mark up a Head Start reauthorization bill on Thursday which will contain some differences with a measure passed by the House (H.R. 2123) at the beginning of the month. The House bill would require Head Start operators to align their curricula with their own state academic standards. However, at most, the Senate measure would require operators to align their curricula only with their state's pre-school standards.

Like the House bill, the Senate bill (not yet numbered) does not contain a White House proposal that some states take over their local centers. The reauthorization has been stalled for more than two years and it is still unclear if the partisan differences holding it up can be solved this year.

The House will continue to move forward on appropriations work this week as the Senate inches closer to invoking the "nuclear option" to end filibusters of judicial nominations. Tomorrow the House will vote on a $29.75 billion fiscal year 2006 Energy and Water appropriations bill that easily cleared committee last week and includes controversial provisions on nuclear waste and U.S. Army Corps of Engineers fiscal management. The legislation places new restrictions on the Army Corps process for shifting or "reprogramming" funds between projects. The bill matches the president's request and is $131.7 million below the FY '05 appropriation.

Also on the House's agenda before the Memorial Day break are appropriations bills funding military construction, veterans’ programs and military health care programs. Last week, the House passed a $31.9 billion Homeland Security appropriations bill and a $26.1 billion Interior-Environment spending bill.

The Senate Appropriations Committee does not plan to start marking up bills until June. In the meantime, Senate debate continues to focus on judicial nominations while a group of moderate Senators - led by Sens. Ben Nelson (D-Nebraska) and John McCain (R-Arizona) - scramble for a last minute compromise that is acceptable to both sides.

Assuming a deal is not reached, the Senate is expected to launch an all-night debate on the nomination for Priscilla Owen nomination and the nuclear option this evening, followed by a cloture vote sometime tomorrow. If the cloture vote fails, Frist will then immediately move to change the Senate rules.

The Senate took one step closer towards invoking the "nuclear option" yesterday when Senate Majority Leader Bill Frist (R-Tennessee) called up the nomination of Priscilla Owens to the U.S. Court of Appeals for the 5th Circuit on Wednesday morning. No one is quite clear what path this showdown might take but centrists Senators continue to try to reach a compromise to avoid having to give up on all legislative priorities for the year.

The Senate will be debating Owens's nomination for the next few days. At that point, Frist will file a motion to invoke cloture (limit additional debate on the nomination). If cloture does not receive 60 votes, Frist will raise a point-of-order asking the chair to rule on whether 51 or 60 votes are needed to end debate on a nominee. The chair -- presumably Vice President Dick Cheney -- will rule that only 51 votes are required. Democrats will then appeal the ruling and the Senate will vote on a motion to table the appeal, which is not debatable. If the motion is successful, the chair's ruling would set a precedent for all future nominees and at that point only 50 votes will be required to seat the judges.

One immediate effect on Senate business is that Republican committee chairmen will be limited to meeting for no more than two hours following Senate Minority Leader Harry Reid's (D-Nevada) pledge to block all committee activity. Reid has decided to invoke a Senate rule that is rarely followed stating that a committee must have unanimous consent to continue any hearing for more than two hours.

The Senate today passed "SAFETEA" -- its version of TEA-21 reauthorization -- by a vote of 89-11. The bill now goes to a House-Senate Conference committee. Staff meetings to begin ironing out differences will begin this week. An initial meeting of House and Senate Members will take place soon (perhaps early next week) for the ceremonial kick-off of the conference. Subsequent meetings will probably be limited to those needed to work through the thorniest issues and then to bless the final product. Most observers believe the bill will not be ready to be sent to the President before late June. This may require an extension of the programs beyond their current May 31 expiration. Discussion is underway on an extension which would not release any additional contract authority, but would only allow spending authority already approved to continue to be released. This would presumably keep the pressure on for final action on the long-term reauthorization.

We will stay in touch with you on developments in the days ahead.

Legislation (H.R. 1544) revamping the distribution of homeland security grants passed the House last week with a vote of 409-10. Reworking the formula has been a goal of Homeland Security Chairman Christopher Cox (R-California) for the past three years, but each year disagreements between the House and Senate as well as between rural and urban areas have prevented any final version. The Senate's bill has passed out of committee but no floor time has been scheduled. The House and Senate versions still differ over the minimum amount of funding each state should receive, regardless of threat with the Senate favoring a higher guaranteed baseline.

The White House came out in favor of Cox's legislation but objected to the creation of a new grants board with the Homeland Security Department and opposed new reporting requirements for state and local government. Cox's legislation also includes provisions to speed up the distribution of homeland security grants.

Senate leaders yesterday laid down a process for considering amendments to the "SAFETEA" legislation that appears to ensure passage on the Senate floor on Tuesday, May 17. Approximately 30 amendments remain in order to be offered. "Second degree" amendments (i.e. those that amend the amendments) may also be offered. The Senate will debate the amendments on Monday and hold the votes on them until Tuesday. Following votes on the amendments, the Senate will move through a few orchestrated procedural steps to get to passage of the bill.

House and Senate staff will turn immediately following passage to preparations for the House-Senate conference. Most staffers and observers believe late June is a reasonable target for completion of the conference. The programs being reauthorized by this legislation expire on May 31. It is unclear whether or not an extension will be considered. That will most likely depend on the degree of progress in conference by the time Congress departs for its Memorial Day recess.

We will keep you posted on developments.