Last week, the Senate Appropriations Committee approved approved Chairman Thad Cochran's (R-Mississippi) allocations of $842 billion in discretionary funds among the 12 subcommittees.

The 302(b) allocations depart significantly from President Bush's own budget request for FY 2006 and the spending plans developed by the House. In particular, Cochran's plan calls for moving billions from the Defense side to domestic programs, which are slated for deep cuts in the president's budget.

While the shifts Cochran has proposed are not expected to become law, Senate appropriators are hoping the plan will help them avoid some early battles over domestic program cuts that could threaten Republican leaders' goal of avoiding an omnibus for the first time in years.

According to the committee, the allocations for the 12 bills will be as follows:

Agriculture at $17.3 billion, up from Bush's $16.9 billion;

Commerce-Justice-State at $48.6 billion, up from Bush's $47.3 billion;

Defense at $400.7 billion, down from Bush's $407.7 billion;

District of Columbia at $593 million, up from Bush's $573 million;

Energy and Water at $31.2 billion, up from Bush's $29.7 billion;

Homeland Security at $30.8 billion, up from Bush's $29.6 billion;

Interior at $26.2 billion, up from Bush's $25.7 billion;

Labor and Health and Human Services at $141.3 billion, the same level as Bush proposed;

Legislative Branch at $3.9 billion, down from Bush's $4 billion;

Military Construction/Veterans Affairs at $44.4 billion, up from Bush's $43.1 billion;

State-Foreign Operations at $31.7 billion, down from Bush's $32.7 billion; and

Transportation-Treasury-HUD at $65.4 billion, up from Bush's $63.1 billion.

The House continues to move quickly on appropriations bills, having passed half of the bills it needs to move (five out of ten).

In addition to the agriculture appropriations bill passed yesterday, the House has also passed:

*Energy and Water Development

*Homeland security

*Interior-Environment

*Military Quality of Life - Veterans Affairs

All remaining bills have seen some sort of action (at least at the subcommittee level) except for the following:

*Foreign Operations

*Transportation-Treasury-HUD-Judiciary-D.C.

Also yesterday, an Appropriations subcommittee approved $142.5 billion in discretionary spending for health, education and labor programs in FY '06. The Labor-HHS-Education draft bill, which was approved by voice vote, would provide an overall total of $459.5 billion when entitlement programs such as Medicare, Medicaid and unemployment insurance are included. The discretionary funding is $164 million below the current year’s levels, a 0.1 percent decrease, but $924 million more than President Bush’s budget request.

Up on the House floor for next week: Science, State, Justice and Commerce, and Defense.

The House-Senate Conference Committee on TEA-21 reauthorization held its first formal meeting yesterday. Dozens of opening speeches by conferees were the order of the day. The sum total of all that was said made it clear that no resolution has been reached -- and little substantive discussion has taken place -- on the topic of the overall funding number for the bill.

Perhaps the most noteworthy comment of all was House Majority Leader Tom Delay's (R-TX) that the President would only support the $283.9 billion figure and that he would support nothing higher than that either. Speaking most forcefully for those (clearly in the majority) who support a higher number, Sen. Max Baucus (D-MT) said the conferees should settle on a number between the House ($283.9) and the Senate ($294.5) because "that is what we do in conference." House Ways and Means Committee Chairman Bill Thomas (R-CA) said that if Members wanted to work out a different funding level "I'm not hard to find." However, it was clear that unlike last year, Thomas was not going to take a leadership role in trying to find a workable number.

Staffs will now resume their conversations about issues in the bill that can be discussed without having settled on the overall number. Unfortunately, such issues are small in number. If the conference is to be completed in time for the reauthorization to be passed before the current June 30 expiration, a decision on the funding level will need to come next week.

We are in regular touch with staff and Members of the Conference. We will keep you posted on developments.

The 93 conferees for the surface transportation reauthorization bill (H.R. 3) will have their first public meeting this afternoon at 3:00 p.m. as lawmakers work to reconcile the House and Senate versions on the bill before the current short-term extension expires on June 30th. We will be closely monitoring today’s meeting and all future meetings.

Despite conversations between White House Chief of Staff Andy Card and key conferees regarding the difference in funding between the two bills and public comments this week from House Ways and Means Committee Chairman Bill Thomas (R-California) that he’s open to meeting the Senate about halfway on funding levels, Transportation Secretary Norman Y. Mineta sent a letter June 7 to conferees pledging a presidential veto if the legislation emerges with a price tag of more than $284 billion and criticizing offsets in the Senate bill used to increase the overall funding level. In addition, House Majority Leader Tom DeLay (R-Texas) told reporters that President Bush said June 8 $284 billion is the only funding level he will support. Restating what has been included in two statements of administration policy, Mineta wrote that if the bill carries a funding level higher than the House's $284 billion, "the president's senior advisers would recommend that he veto the bill."

The Senate Interior Appropriations Subcommittee voted yesterday to provide $26.3 billion in FY '06 for the Interior Department, Forest Service and U.S. EPA. Overall, the bill would provide $9.88 billion for Interior and $4.12 billion for the Forest Service. House cuts to EPA's Clean Water State Revolving Loan Fund were restored.

In the Interior Department, the bill would increase the operations budget for the National Park Service by $65 million to $1.75 billion, $20 million above the Bush administration's request. In addition, other agencies are funded at the following levels:

*BLM - $1.79 billion ($28 million below FY '05)

*Fish and Wildlife Service - $1.3 billion ($23 million below FY '05)

*U.S. Geological Survey - $963 million ($27 million increase over FY '05)

*Mineral Management Service - $160 million ($14 million below FY '05)

*Office of Surface Mining and Reclamation Enforcement - $110 million ($2 million increase over FY '05)

*Payment in Lieu of Taxes program - $235 million ($10 million increase over FY '05)

Most numbers are close to those in the House bill (H.R. 2361) passed on May 19. The full Senate appropriations panel is scheduled to take up the bill tomorrow.

The 93 House and Senate conferees for the surface transportation bill have scheduled their first public meeting to begin the process of merging the two versions of the bill on June 9. Now that Congress has returned, lawmakers have 19 legislative days to work on reconciling the bills. The current short-term extension--the seventh since the law expired Sept. 30, 2003--will expire June 30.

Staff for the House Transportation and Infrastructure Committee and Senate Environment and Public Works Committee have already held meetings and are expected to give lawmakers a list of lower-level policy issues to approve at the June 9 meeting. Staffers will soon reach a point where they can no longer negotiate until the biggest issue is taken care of - the total cost of the bill. At this point it is unclear as to how the debate over the differing costs of will shake out. The House passed a six-year bill at just under $284 billion. The Senate, on the other hand, passed a bill that climbs to about $295 billion - too high for President Bush who has vowed to veto the bill if it comes to his desk at that level.

Congress returns to town this week after a week-long recess with the possibility of action on some major domestic issues during the next four weeks including possible completion of the highway reauthorization bill and further action on a national energy policy.

Kicking off the action, the Senate will finally begin work on appropriations this week starting with the Interior spending bill slated for subcommittee action tomorrow and a full committee markup on June 9. Senate Appropriations Chairman Thad Cochran (R-Mississippi) will also move the process along on June 9 by unveiling his allocation of the $843 billion in discretionary spending among the 12 subcommittees.

Continuing to move faster than its counterpart, the House has scheduled the agriculture spending bill for floor time this week and will also markup both the Defense, Science-State-Justice-Commerce and Labor-HHS-Education bills.

President Bush nominated House Homeland Security Committee Chairman Christopher Cox (R-California) to lead the Securities and Exchange Commission following the resignation of the current chairman. Cox's new position will leave an open chairmanship when he departs next month. Whoever fills the position will be responsible for continuing to shape the newly permanent committee. Cox pushed hard last year to make the select committee permanent in the face of opposition by several other chairmen such as House Judiciary Committee Chairman F. James Sensenbrenner (R-Wisconsin), House Commerce and Energy Committee Chairman Joe Barton (R-Texas), and House T & I Committee Chairman Don Young (R-Alaska).

Assuming Cox is approved by the Senate, House Speaker J. Dennis Hastert (R-Illinois) will make a recommendation for chairman to the House Steering Committee. Typically, the choice to fill the chairmanship would be made from among the committee members with the most seniority. However, under House GOP caucus rules seniority is not the controlling factor.

Young is the "ranking Republican" on the panel and he would have to give up his chairmanship of the House Transportation and Infrastructure Committee, which expires at the end of the congress. Young narrowly missed being named vice chairman of the committee in February, but was a prominent critic of the effort to create a new homeland security panel.

That leaves third-ranking Rep. Lamar S. Smith (R-Texas), fourth-ranking Rep. Curt Weldon (R-Pennsylvania), who is vice chairman of the homeland security committee, and fifth-ranking Rep. Christopher Shays (R-Connecticut) who has already pulled himself out of the running.

Hastert could also recommend someone who does not currently sit on the Homeland Security Committee.