The House of Representatives on Wednesday approved a slimmed-down spending bill that funds many of President Barack Obama's top priorities but denies him billions of additional dollars he had sought for government operations.
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The bill, which heads to the Senate, reflects the changed political climate in Washington.
Democrats, who have backed generous spending increases in recent years, now seek to lock in funding at current levels before Republicans, who have promised deep spending cuts, take control of the House in January.
The measure would enable Obama to move forward with tougher financial industry regulation, increased education aid and other priorities as it funds government operations through October 2011, but at a level $46 billion lower than he requested.
Many economists say the spending that Democrats approved in recent years, including an $814 billion stimulus effort, helped blunt the impact of the worst recession since the Great Depression. But voters have grown worried about the rising levels of U.S. debt and handed a big victory to Republicans in the Nov. 2 congressional elections.
The bill, which passed by a vote of 212 to 206, represents a severe breakdown in the budget process. Congress failed to pass any of the 12 spending bills that fund government operations this year and must extend last year's budget, with a few tweaks, to avoid a government shutdown.
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Congress has kept the government running on autopilot since the beginning of the fiscal year on Oct. 1, an approach which has prevented agencies from doling out new research grants and launching other programs.
The bill would fund everything from the military to national parks at roughly $1.1 trillion, the same level as the past fiscal year.
Democratic Representative David Obey, who oversees spending as head of the Appropriations Committee, said he tried to come up with the best bill possible given the strong sentiment in Washington to rein in spending.
"If you're going to be responsible you'll have to set aside your first preferences to do what is necessary to keep this government open so Congress doesn't become the laughing-stock of this country," he said.
The Senate must approve the bill before Obama can sign it into law. It does not cover Social Security and other benefit programs that account for roughly half of all federal spending.
The bill would freeze pay for nonmilitary federal workers for two years and prohibit the pet spending projects known as "earmarks" that have become a symbol of wasteful spending for many voters.
It would boost the budgets of the Commodity Futures Trading Commission, the Securities and Exchange Commission and the Treasury Department as they gear up for a crackdown on the financial industry under the landmark Dodd-Frank Act, passed earlier this year.
It would allocate $624 million to upgrade nuclear weapons, a key Republican priority, but only if the Senate approves the START nonproliferation treaty. Senate Republicans have so far blocked a vote on the treaty, which would reduce nuclear stockpiles in the United States and Russia.
Funding for the completed Census would be slashed, while the Secret Service would get an increase to begin preparing for the 2012 presidential campaign.
The bill would allow the Transportation Security Administration to buy more of the airport-security body scanners that have raised privacy concerns among travelers. It would also authorize the Navy to acquire up to 20 Littoral Combat ships.
It would bar the transfer of terrorism suspects from the Guantanamo Bay prison to U.S. soil, a blow to the Obama administration's efforts to prosecute the detainees.
It would extend the time the Interior Department has to approve an energy company's permit application for offshore drilling from 30 to 90 days. The department asked for the longer review period after the BP (BP) oil spill in the Gulf of Mexico.
The bill also includes the largest overhaul of the U.S. food safety system in decades, which has passed both chambers of Congress but needed another House vote to resolve constitutional concerns.
Republicans pushed for a shorter extension that would only last through February, which would give them greater leverage as they fight for sharper spending cuts.
"This would be the clearest signal the House could send to the American people that we got the message in November and are deadly serious about cutting spending," said Representative Jerry Lewis, the top Republican on the Appropriations Committee.
In the Senate, Democrats still hope to pass the 12 spending bills in one large package, though it remains unclear whether they have enough votes to do so.
Congress must act by Dec. 18, when the current funding extension expires.