Senate forwards $634 billion bill for Bush to sign

Automakers gained $25 billion in taxpayer-subsidized loans and oil companies won elimination of a long-standing ban on drilling off the Atlantic and Pacific coasts as the Senate passed an extensive spending bill yesterday.

The 78-12 vote sent the $634 billion bill to President Bush, who was expected to sign it even though it spends more money and contains more pet projects than he would have liked.

The bill is needed to keep the government running beyond the current budget year, which will end Tuesday. As a result, the legislation is one of the few bills this election year that simply must pass. Bush's signature would mean that Congress could avoid a lame-duck session after the Nov. 4 election.

The Pentagon is in line for a record budget. In addition to $70 billion approved this summer for operations in Iraq and Afghanistan, the Defense Department would get $488 billion, a 6 percent increase. The spending bill also offers aid to victims of flooding in the Midwest and recent hurricanes across the Gulf Coast.

Such a huge bill usually would dominate the end-of-session agenda on Capitol Hill. But it went below the radar screen because attention focused on the congressional bailout of Wall Street.

The bill settles dozens of battles that have brewed for months between the Democrats who run Congress and the White House and its GOP allies.

The administration won approval of the defense budget. Democrats wrested concessions from the White House on $23 billion for disaster-hit states, a doubling of low-income heating aid, and $24 million more for food shipments to the elderly.

The loan package for automakers would reward them with $25 billion in below-market loans, costing taxpayers $7.5 billion to subsidize the retooling of plants and development of technologies to help U.S. automakers to build cleaner, more fuel-efficient cars. Companies would not have to begin repaying the loans for five years, drawing objections from Sen. Jon Kyl, R-Ariz., who predicted they would return for more help when the money is due.

Republicans made ending the coastal drilling ban a central campaign issue this summer as $4-plus-a-gallon gasoline stoked voter anger and turned public opinion in favor of more exploration.

The action does not mean drilling is imminent and still leaves the oil-rich eastern Gulf of Mexico off limits. But it could set the stage for the government to offer leases in some Atlantic federal waters as early as 2011.

Also in the bill is money to avert a shortfall in Pell college aid grants and solve problems in the Women, Infants and Children program delivering healthy foods to the poor.

In addition to the Pentagon's budget, there is $40 billion for the Homeland Security Department and $73 billion for veterans' programs and military base construction projects. Combined with the Defense Department's spending, that amounts to about 60 percent of the budget work Congress must pass each year.

Democrats came under criticism from the GOP for short-circuiting the normal process for a spending bill after it became clear that Republicans would force difficult votes on the drilling ban.

Democrats also wanted to avoid an election-year clash with Bush that would have played in his favor. They are willing to take their chances that Democrat Barack Obama will be elected president in November and permit increases for scores of programs squeezed by Bush each year.

Bush had threatened to veto bills that did not cut the number and cost of pet projects in half or cause agency operating budgets to exceed his request. Democrats ignored the edict as they drafted the plan, and the White House has apparently backed down.

Taxpayers for Common Sense, a watchdog group, discovered 2,322 pet projects in the bill totaling $6.6 billion. That included 2,025 in the defense portion alone that cost a total of $4.9 billion.

Spending bill highlights

Highlights of the spending bill sent to President Bush yesterday that would end a freeze on more offshore oil drilling and provide money for federal agencies in the budget year that begins Wednesday.

• OFFSHORE DRILLING: Lift 25-year ban on drilling for oil off the Atlantic and Pacific coasts but keep in place restrictions on drilling in the eastern Gulf of Mexico.

• TEMPORARY SPENDING: Keep most domestic agencies operating at current levels through March 6 unless Congress separately enacts their budgets.

• SECURITY SPENDING: Combine $603 billion for the 2009 budgets for the departments of Defense, Homeland Security and Veterans Affairs. Pay for a 3.9 percent raise for military personnel, provide a 10 percent increase for veterans' health programs and boost the homeland security budget by 6 percent.

• DISASTER AID: Provide $23 billion in emergency aid for victims of recent hurricanes and summer floods in the Midwest. That includes $2.8 billion for flood-control projects in New Orleans and the Midwest, $8 billion for the Federal Emergency Management Agency's disaster relief fund, and $6.5 billion in community-development grants to speed relief to flood and hurricane victims.

• AUTOMAKER LOANS: Provide $25 billion in low-interest federal loans to help Detroit automakers retool factories to produce automobiles that would meet new emissions and fuel-efficiency standards. Loan payments would be deferred for five years. The subsidy would cost taxpayers $7.5 billion.

• HEATING SUBSIDIES: Double, to $5.1 billion, money for heating and air-conditioning subsidies for the poor. People earning up to 75 percent of a state's median income would be eligible, compared with the 60 percent under current law.

• PET PROJECTS: Finance 2,322 pet projects totaling $6.6 billion sought by legislators for their home districts and states. That included 2,025 in the defense budget alone costing $4.9 billion.