SEPTEMBER 27, 2011.

Budget Deadlock Is Broken

Senate Approves Short-Term Funding Measure After Sticking Point Is Resolved.

By JANET HOOK And KEITH JOHNSON

A budget deadlock that had raised the risk of a federal government shutdown was broken Monday, as the Senate approved a short-term funding measure and the House appeared likely to follow suit.

The Senate, on a 79-12 vote, approved a bill late Monday to fund the government through Nov. 18. The vote came after the main sticking point in negotiations between the two parties was resolved.

Tony Carr's Prattsville, N.Y., home was destroyed by the floods caused by Tropical Storm Irene on Sept. 1. Governor Andrew Cuomo declared the Catskill Mountain region a disaster area, and many residents sought aid from FEMA.
.Lawmakers had been in a stand-off over House Republicans' demands for new budget cuts as a condition for sending additional money to the Federal Emergency Management Agency to aid victims of natural disasters through the end of the fiscal year on Friday.

But that dispute vanished Monday when FEMA announced that it may not run out of money before then—giving it more breathing room than expected. FEMA's new statement about its finances cleared the way for Congress to put in place a funding mechanism for at least the start of the fiscal year that begins Saturday.

Assuming it sticks, the compromise may prove a blessing for both parties, and for the institution of Congress, all of which saw their standing in the eyes of average Americans plummet after the prolonged and unsatisfying summer squabbling about raising the nation's debt ceiling.

Under the compromise struck Monday night, the Senate approved two bills. One would keep the government running through Nov. 18, which the House is expected to pass when it returns from a recess next week. But to keep the government afloat until the House returns, a second measure was approved for funding through Oct. 4. That is expected to clear the House by voice vote before week's end. While the temporary measures are in place, lawmakers will continue work on spending bills for all of fiscal 2012.

Many conservative Republicans are likely to complain that the temporary spending measures do not cut enough money from the federal budget, but the measure is expected to draw enough support from Democrats to make up for any GOP defections.

A spokesman for House Speaker John Boehner (R.,Ohio) treated the compromise as a triumph for the GOP. ``If it weren't for House GOP efforts, the American taxpayers would have been on the hook for even more reckless borrowing by Washington Democrats," the spokesman, Michael Steel, said in a written statement.

In the Senate, Republicans were pleased that the compromise included even less disaster aid funding than the bill passed by the House. Democrats were cheered by the elimination of budget cuts in energy programs that the House GOP included to pay for more disaster spending.

For both parties, the compromise averted another round of 11th hour brinksmanship of the sort that has alienated voters in recent months. The dispute over FEMA funding had opened Congress to heavy criticism for its apparent inability to put partisan bickering aside over such a relatively small sum of money, while raising the risk of damaging real-world consequences.

"This is a compromise that is a reasonable way to keep the government operational,'' said Senate Republican Leader Mitch McConnell (R., Ky.). "This entire fire drill was completely and totally unnecessary. I'm glad a resolution is at hand.''

Senate Majority Leader Harry Reid (D.,Nev.) called the deal "a win for everyone.''

This has been an especially expensive year for FEMA, with a record number of federal disaster declarations, including severe flooding along the Mississippi and Missouri rivers, deadly tornadoes, wildfires in Texas, and floods along the Eastern Seaboard this month in the wake of Hurricane Irene and Tropical Storm Lee.

Late last week, the emergency agency feared it could run out of money as early as Tuesday. But spokeswoman Rachel Racusen said Monday afternoon that FEMA's disaster relief fund still had $114 million left. She said it likely would last until "close to the end of the week," as long as no new natural disasters strike the country.

When big natural disasters hit, FEMA's disaster relief fund has always been topped off by supplemental funding. Since 1989, Congress has approved $292 billion in supplemental disaster-assistance funding; about 40% of that was earmarked for the disaster relief fund.

In the immediate aftermath of Hurricane Katrina in 2005, for example, the disaster fund got an additional $43 billion; in late 2008, the fund received an additional $10.9 billion to pay for continuing clean-up efforts in the wake of Katrina, plus a string of other natural disasters that hit that year.

Most supplemental funding has been approved by Congress without identifying required spending offsets elsewhere in the federal budget. But the bill passed by the Republican-led House last week specified that an additional $1 billion in FEMA funding for the current fiscal year be offset by cuts to two energy programs favored by Democrats.

The House bill also included $2.65 billion for FEMA for 2012, and included funding for the rest of the government through Nov. 18.

The Senate rejected that bill last week as Democrats argued that it violated a longstanding policy of not requiring offsets for emergency relief spending.

Mr. Reid postponed a scheduled Senate recess to resolve the dispute before Wednesday, when the Senate is supposed to join the House in recess for the Jewish holiday of Rosh Hashanah.

Democrats drafted an alternative that provided the same amount for FEMA, but without offsetting cuts. That measure was blocked in a procedural vote Monday before the compromise was adopted. The vote was 54-35, falling short of the 60 votes needed to advance.

But the new budget estimates from FEMA open a new avenue for a compromise.

Write to Keith Johnson at keith.johnson@wsj.com

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