The Senate Budget Committee finished its markup of the FY 07 Budget Resolution yesterday. The bill will be on the Senate floor next week. It passed out of the Budget Committee along party lines, following the President’s overall funding request level of $873 billion for discretionary programs. However, Chairman Judd Gregg shifted $5 billion from Defense and Foreign Operations to domestic spending including an additional $1.5 billion each to education and health programs.

Gregg’s additional funding will help replace a portion of the $7 billion shortfall in the Administration’s FY 07 budget request for programs in the Labor-HHS Appropriations Subcommittee. This additional funding is still inadequate for Labor-HHS Chairman Specter and Ranking Member Harkin, who will seek to add more funding to the bill on the Senate floor for programs within Labor-HHS, including WIA. We will alert you as soon as the details of a Specter/Harkin amendment become finalized.

Many close to the Budget debate believe that this amendment, which will add significant funding for domestic programs, will have a realistic chance for passage despite needing 60 votes for passage because it will break the budget caps. Support is expected to come from a number of Senate Republicans, particularly among those up for re- election cycle, uneasy with the proposed funding cuts for domestic programs in the Bush budget request.

Consideration of the House Budget Resolution has been delayed until the end of the month, as a markup would not likely have passed out of Committee this week. House Republicans are in the midst of a difficult fight within the party between the conservative branch of the party called the Republican Study Committee (RSC), which is comprised of over 100 House Republicans, and moderate Members. The RSC introduced a budget proposal yesterday to cut nearly $650 billion over the next five years, while moderates, who comprise about 50 House Members, are concerned that the Bush budget proposal already cuts too deeply in key domestic priorities. Moderates tell NWA that they believe they can lose control of the House if the Bush budget is passed.

Senior House Members tell NWA that the House leadership is leaning toward the wishes of the Republican base, which are encouraging even bigger cuts than in the Administration’s budget proposal. The leadership will work over the next couple of weeks to rally a majority of the Republican Conference behind a budget proposal, the precise dimensions of which are unclear at this time.

However, NWA is hearing in both the House and Senate very little optimism that a House-Senate Budget Conference will be completed this year. This would be good news for the workforce system, the Senate will likely produce significantly higher funding levels for WIA than in the House if it breaks the budget caps and a bigger gap between the two chambers could mean a higher funding level when the Labor-HHS Conference in negotiated in the fall.

The Senate Labor-HHS Appropriations Subcommittee will accept letters from your individual Senators requesting funding for their priority program in the Subcommittee until April 3rd this year. The House deadline for program letters is March 16th. If your Senator is a Republican, his/her letter should be addressed to Chairman Arlen Specter, if your Senator is a Democrat, his/her letter should be addressed to Ranking Member Tom Harkin.