Yesterday, the Senate rejected both the House-passed FY2011 year-long Continuing Resolution (CR) and an alternative proposed by the Senate Appropriations Committee (SAC).  Neither bill attracted the 60 votes required for passage under an agreement between Senate Democrat and Republican leaders.  The House bill garnered only 44 yes votes, while the SAC bill could achieve only 42.  The House-passed bill would cut the president’s FY2011 request by $100 billion and be about $60 million below the enacted FY2010 level.  The SAC bill would be about $51 billion below the president’s request, but be only about slightly lower than FY2010.  The Senate votes underscored the partisan gap between the two proposals as no Democrat voted for the House bill and no Republican voted for the SAC proposal. 

However, the votes also provided a glimmer of hope that progress might be possible.  Now that a majority in the Senate has decided that a Republican backed bill cuts federal spending too deep and the Democrat-sponsored bill doesn’t go nearly deep enough, it might be possible to move toward a serious agreement to fund the government for the rest of the fiscal year.  And, the ticking clock may also provide some impetus for resolution.  The current CR runs out on March 18 and many believe that the next short-term CR, expected to be about a month, offers the best chance of finding some common ground.  By then only six months will remain in the fiscal year and federal agencies, defense and nondefense, will be facing serious budget execution issues.   Defense Secretary Gates has warned Congress repeatedly of the detrimental effect that continuing short-term CRs have on defense readiness and acquisition programs, as well as support for operations in Afghanistan.

Vice President Biden has been meeting with House and Senate leaders to try resolve the FY2011 budget deadlock.  The decision to hold Senate votes on the House bill and a Senate alternative to try to move the process forward was hammered out in this group.  Now that the Senate vote signals the sparring between the two sides may be over, discussions are expected to begin in earnest.  However, because there is little chance of agreement by next week and  there is almost no support for a government shut down, the House is already preparing the next short-term CR.