WASHINGTON—A Senate deal to fund the federal government until early March doesn't include money to enact the health-care overhaul or stepped up regulation of Wall Street, boosting Republican efforts to curb key elements of President Barack Obama's domestic agenda.
Democrats last week sought $1 billion to expand federal agencies to cope with health-care demands as part of a proposed $1.1 trillion spending bill. That measure died after Senate Republicans closed ranks against it under pressure from conservative activists.
The doomed budget plan also included spending increases sought by Democratic leaders for two agencies granted new responsibilities by the Dodd-Frank financial-regulation law, passed in response to the Wall Street crisis of 2008-2009.
The $250 billion deal to pay for the government until March 4, which is expected to come to the Senate floor for a vote Tuesday, freezes spending for most government programs at 2010 levels. The deal is expected to clear the Senate and House before current government-spending authority expires that day.
The proposed short-term funding measure would kick the larger spending debate into the new year, when Republicans will control the House and have more Senate seats. It would also start the bargaining between congressional Republicans and the White House at a lower funding level than the now-defunct Democratic plan.
Obama administration officials could shift money around within federal agencies to keep health care and Wall Street regulation on track. But Republicans could try to block such moves through legislation.
"It's going to be a big political fight," said Sen. Richard Shelby (R., Ala.). "I think the odds shift toward Republicans."
Senate Finance Committee Chairman Max Baucus (D., Mont.) said he was confident Democrats could still win funding battles for health care and financial regulation. "Clearly, the fewer resources devoted to any program, the harder it is to implement it," he said.
Congressional Republicans have said they will try to defund enactment of the health-care law's least popular provisions, particularly Internal Revenue Service efforts to enforce the requirement that most Americans carry health insurance.
Republicans were also looking at cutting funds for the law's expansion of the Medicaid insurance program for the poor, and for subsidies to offset the cost of buying insurance for lower earners. Cuts were also being weighed for a new board that will recommend Medicare spending reductions and for parts of the law arguably tied to coverage of abortion services.
The bulk of the health law's provisions don't get fully under way until 2014. The Department of Health and Human Services has the power to redirect money from other operations to cover gaps in health-law funding.
"You may make it take longer for them to write regulations, but at the end of the day it's actually very difficult to defund implementation for a law that's already passed," said James Gelfand, director of health policy at the U.S. Chamber of Commerce, which opposes the law.
An administration official said the short-term funding deal wasn't ideal but wasn't fatal to implementing the health overhaul the president signed in March. It wasn't clear how the administration planned to push back against Republicans if they begin choking off long-term funding for the law.
Democrats worried the funding brawl could erode last year's landmark legislative gains and make for sloppy implementation of the laws.
"The rest of the world is waiting for us to move forward, particularly on financial reform," said Sen. Mark Warner (D., Va).
Some agencies were already raising alarms they wouldn't have money needed to do what the laws require next year. Commodity Futures Trading Commission Chairman Gary Gensler said in recent Senate testimony that his agency, which has fewer than 700 employees, would need to boost staff to handle hundreds of new registrants next summer when new rules for the derivatives market are finalized.
Securities and Exchange Commission Chairman Mary Schapiro said her agency's staffing and technology were only now reaching 2005 levels, due to meager budgets in prior years. The Dodd-Frank law authorized a near-doubling of the SEC's budget to $2.25 billion in 2015 from $1.3 billion in 2011.
The SEC and CFTC don't have much leeway to shift funds. But the proposed spending plan would give the SEC authority to set up five offices mandated by the financial overhaul law including a whistleblower office.
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