The measure keeps a tight rein on new funding for Wall Street regulators. $1.1 trillion spending bill unveiled

House-Senate negotiators rolled out a $1.1 trillion spending bill Monday night — a giant package that fills in the blanks of the December budget agreement and promises to restore some order to government funding over the next year.

Under pressure from Republicans, the measure keeps a tight rein on new funding for Wall Street regulators and effectively freezes appropriations for President Barack Obama’s health care program at the reduced, post-sequester level.


But the White House retains the flexibility to find the financing it needs to implement the health exchanges and appears satisfied to have avoided the most contentious restrictions proposed by conservatives.

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Among his other domestic priorities, Obama secured significant new funding he has wanted for pre-kindergarten education initiatives, albeit more through existing programs like Head Start than the new format he envisioned.

Indeed, the new $8.6 billion funding level for Head Start reflects one of the biggest investments in the bill — an estimated $1 billion, or 13 percent, increase over current funding and $612 million over its initial 2013 enacted appropriation.

At the same time, House Appropriations Committee Chairman Hal Rogers (R-Ky.) came away with two coal-related riders, one affecting mountaintop mining regulations and the other challenging new Export-Import Bank guidelines on the financing of coal-fired power plants overseas.

One legislative provision that all sides embraced would exempt disability pensions for veterans from a cost-of-living cut included in the December budget deal.

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The very evident give-and-take caps more than six weeks of often intense bargaining within the Appropriations Committees and sets the stage for what the leadership hopes will be a rapid series of floor votes sending the bill on to Obama by this weekend.

“This bill is a compromise, but it reflects Republican priorities and holds the line on spending in many critical areas,” Rogers said.

His Senate counterpart, Sen. Barbara Mikulski (D-Md.), more colorfully described the deal as an end to “shutdown, slowdown, slam-down politics.” And speaking for the White House, Budget Director Sylvia Mathews Burwell suggested lawmakers get on with it. “The administration urges Congress to move quickly to pass it,” Burwell said.

To avoid any threat of a shutdown, the House will first take up a short extension of the current stopgap continuing resolution on Tuesday — moving the deadline back three days to Saturday. This should buy sufficient time for the House to act on the larger omnibus bill Wednesday. And Senate Democrats are hoping that there will be sufficient Republican support to avoid major battles over cloture Thursday and Friday.

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This remains a tight time frame, but the rewards are substantial for both parties. And there is a genuine hunger to build on the December budget deal and not risk another government shutdown akin to last October’s.

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Already, a long-anticipated farm bill has gone off the tracks since lawmakers returned from the holidays. If the omnibus were to fail as well, it would be a huge black eye for both parties.

One positive sign came from Alabama Sen. Richard Shelby, the ranking Republican on Appropriations. In anticipation of the filing, he met with his fellow Republicans on the panel. Shelby said later he would support the bill and asked his colleagues to support it as well.

“I’m on board,” Shelby told POLITICO. “If the House comes with a big vote, we’ll get a big vote, too.”

“It’s not everything anybody wanted, but we’ve been working hard at it, and it will lead us, hopefully, to regular order.”

As the former chairman of the Senate Banking Committee — and an ardent opponent of the Dodd-Frank reforms — Shelby left an imprint seen in the tight budgets for the Commodity Futures Trading Commission and the Securities and Exchange Commission. The administration appears to have avoided restrictive riders proposed in the House, but the price is far less money than the president wants.

CFTC would be held to $215 million, or $100 million less than requested. The SEC’s budget is set at $1.35 billion — $324 million less than requested.

As drafted, the package fully respects the contours set in December but adds hundreds of pages in detail, spelling out where the dollars will actually go. Literally every corner of the government is affected, and the numbers offer a snapshot of new and old priorities competing for limited funds.

Community development funds would be held to $3.03 billion, for example. The newer and popular TIGER grant program in the Transportation Department is promised a more robust $600 million — a 20 percent increase.

Despite late-breaking support from Republican business lobbies, Treasury Secretary Jack Lew lost out in his bid to secure new money to meet U.S. pledges to the International Monetary Fund. At the same time, the bill provides $3 billion for migration and refugee assistance — a big increase spurred by the flood of families fleeing the violence in Syria’s civil war.

Agencies like the Food and Drug Administration emerge more than intact after the sequestration cuts last March. FDA is slated to receive $2.51 billion, or 8 percent above its current funding level. The amount is even modestly higher than what Congress approved last spring.

Similarly, the Energy Department’s Office of Science budget grows to $5.07 billion, a number that recaptures what was lost under sequestration and adds another $205 million.

The National Institutes of Health and National Science Foundation are less fortunate.

NIH ends up with $29.9 billion, a $1 billion increase over its current funding but still $714 million below where it was before the automatic cuts last spring. NSF also falls short, with a $7.2 billion budget that is about $68 million below where it had been.

In NIH’s case, the squeeze is because it must compete in an arena where the Department of Health and Human Services needs new resources to care for poor, unaccompanied minors coming across the southern border from Latin America.

The number of these migrants has more than tripled in recent years, and the Obama administration has stepped up efforts to provide housing and place the children with families rather than assign them to detention facilities. But the costs are significant, and the $868 million in the draft bill is more than double the 2013 appropriation and significantly above the president’s initial request.

In the Interior Department chapter, there is a similar competition between added firefighting funds and the PILT program, payment-in-lieu-of-taxes for Western towns surrounded by federal lands.

Negotiators had to find a way to make room for an extra $636 million to battle fires while also restoring the Environmental Protection Agency’s budget to $8.2 billion — a $299 million increase over the post-sequester level. PILT was caught in the middle, but the Appropriations leadership said it has been assured that authorizing committees like Senate Finance will come up with an answer before the next PILT payments are due this spring.

Taken as a whole, these numbers define a new plateau — some would say realism — for the remainder of Obama’s presidency.

Nonemergency appropriations are capped at $1.012 trillion, as prescribed in December. These dollars are paired with about $91.7 billion in overseas contingency funds — chiefly for military operations in Afghanistan but also to help address the soaring number of refugees fleeing Syria’s civil war.

The so-called OCO funding meets the target set in the House Republican budget resolution last spring. But the total is about $7.2 billion higher than Obama’s 2014 request, and it shows the extra latitude House Republicans will allow to help the Pentagon adjust to the downward spiral now in its base funding.

The Pentagon’s base budget is expected to drop to $487.4 billion — $24 billion below what the House approved last July and about $20 billion above what was threatened by another round of sequestration this month.

When the OCO funding is counted, the total comes to about $572.6 billion. But that is still about $35 billion below the Pentagon funding approved for 2013 before the first round of automatic cuts last March.

What’s most telling is to compare the numbers now with spending levels six years ago for fiscal 2008 — the last full budget cycle under Obama’s predecessor, President George W. Bush.

Total discretionary spending for 2008 was $1.176 trillion, more than half of which, or $642.1 billion, was designated for the Pentagon and military operations — in Iraq then as well as Afghanistan.

That left $534.4 billion among the 11 other appropriations bills, almost exactly what will be the case now in the 2014 omnibus. The big difference is inflation. And when the Bush dollars are adjusted upward to reflect changes in the cost of living since 2008, it shows that Obama will be left with about 10 percent, or $53 billion, less than his predecessor.

CORRECTION: An earlier version of this story misstated the amount by which the SEC’s budget fell short of what was requested. The amount is $324 million.

CORRECTION: Corrected by: Andrea Drusch @ 01/14/2014 11:10 AM CORRECTION: An earlier version of this story misstated the amount by which the SEC’s budget fell short of what was requested. The amount is $324 million.