–Senate To Vote Monday Evening On New FY’12 Stop-Gap Plan
–Senate GOP Leader Says He’s ‘Pretty Confident’ Reid Plan Will Fail
–Congressional Leaders Fight Over $1.6 Billion In Offsets
–Stop-Gap Must Be In Place By End of Week; FY’12 Begins Saturday
–Fed’s Bernanke To Testify To Joint Economic Comte Panel Oct. 4

By John Shaw

WASHINGTON (MNI) – Apparently suffering from brinksmanship
withdrawal, some lawmakers on Capitol Hill seem determined to have the
largest possible fight over the smallest conceivable issue.

Both the House and Senate were scheduled to be off this week to
allow Jewish lawmakers to observe Rosh Hashana, but a standoff over
spending will have the Senate is session for the early part of the week
and may compel the House to return to Washington later in the week.

The Senate will vote Monday at 5:30 p.m. on a Democratic
alternative to end the budget stalemate.

However, Senate Minority Leader Mitch McConnell said Friday that
he’s “pretty confident” the Democratic plan will fail. In fact,
McConnell urged Senate Majority Leader Harry Reid to hold the vote
Friday, but Reid declined.

The 2012 fiscal year begins Saturday and congressional leaders have
said they must past a stop-gap spending bill to fund the government
until Oct.1.

The underlying FY’12 stop-gap spending bill is relatively
non-controversial. It keeps the federal government running until Nov.
18 as work continues on the regular spending bills for the 2012 fiscal
year.

The overall funding level for discretionary programs in FY’12 was
agreed to earlier this year by the White House and Congress. That level
is $1.043 trillion for discretionary programs in FY’12.

However, there is a continuing dispute over disaster funding which
is attached to the stop-gap bill. The House GOP leadership backs a
package of $3.65 billion in emergency relief while Senate Democrats
have supported a $6.9 billion package.

Additionally, the House bill includes a partial offset to the
disaster package by cutting $1.5 billion from an energy efficiency
program. House Republican leaders also added a provision to cut $100
million from a loan guarantee program that the solar energy company
Solyndra used before it went bankrupt.

Reid said the Senate will vote Monday on a stop-gap bill that has
$3.65 billion in disaster funds but does not include the offsets that
the House put on the bill.

“There is a compromise here,” Reid said last week, adding that it
would be useful to have a “cooling off period” for congressional leaders
to reassess their positions over the weekend and search for a solution
to the impasse.

So far, there is no sign of an agreement.

The Senate rejected Friday the House Republican leadership’s
revised fiscal year 2012 stop-gap spending billion on a 59 to 36 vote.
All Democrats and a handful of conservative Republicans voted against
the bill.

House Majority Leader Eric Cantor said Friday the House was
leaving Washington later in the day and did not say when it will
return. It is not scheduled to return until early next week, but
presumably will have to come back at some point to resolve the impasse.

Because of the expected congressional recess this week, there are
no congressional hearings scheduled in Washington. Several field
hearings are occurring in various states.

The Joint Economic Committee announced that Federal Reserve Board
Chairman Ben Bernanke will testify on Oct. 4 at 10 a.m. on the state of
the economy.

** Market News International Washington Bureau: 202-371-2121 **

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