Senate blocks House disaster aid bill (AP)

WASHINGTON – The Democratic-led Senate blocked a House bill Friday that would provide disaster aid and keep government agencies open, escalating the parties' latest showdown over spending and highlighting the raw partisan rift that has festered all year.

In a tit-for-tat battle, the Senate used a near party-line vote of 59-36 to derail the measure passed earlier by the Republican-run House. That bill would fund federal agencies and provide $3.7 billion in disaster assistance, partly paying for that aid with cuts in two Energy Department loan programs that finance technological development.

With the support of 10 GOP senators, the Senate had voted last week to provide $6.9 billion in disaster aid and no cuts to help pay for it.

Senate Majority Leader Harry Reid, D-Nev., offered a compromise Friday that would accept the House's lower level of disaster spending but lacked the loan program cuts. Republicans refused to let the chamber approve it, but the Senate will consider it Monday, when Republicans seem likely to prevent Democrats from getting the 60 votes they would need to prevail.

The dispute pitted GOP objections that the disaster spending would worsen the government's budget problems unless savings were included against Democratic complaints that cutting the energy loan programs would stifle the economy and cost jobs.

The fresh round of brinksmanship came with lawmakers facing two deadlines. The Federal Emergency Management Agency's fund for disaster victims could run out of money early next week, even as claims from Hurricane Irene and other recent disasters continue to accumulate. And Congress has completed none of the 12 annual spending bills for the federal fiscal year that begins Oct. 1, meaning agencies would have to close their doors that day without fresh funding.

"We've agreed to their number on FEMA," Reid said. "I mean, do they want the government to shut down? Do they want FEMA to close?"

Senate Minority Leader Mitch McConnell, R-Ky., said Democrats want to continue the Washington custom of financing emergency spending by adding to colossal federal deficits.

"If there's any lesson we can draw from the debates we've been having here over the last six months, it's that the American people won't accept that excuse anymore," McConnell said. "The whole, `that's the way we've always done it' argument is the reason we've got a $14 trillion dollar debt right now."

Besides its emergency aid, the measure the House passed early Friday would temporarily prevent a federal shutdown by financing government agencies from the Oct. 1 start of the new fiscal year through Nov. 18. It was approved by a near party-line 219-203 vote.

White House spokesman Jay Carney faulted House Republicans for the deadlock, saying they had passed legislation knowing it would die in the Senate, just as they had during last month's fight over extending the federal debt limit.

"The fever hasn't broken — the behavior that we saw this summer that really repelled Americans continues," Carney said.

Republicans blamed Democrats, saying the House-passed bill had enough money for the Federal Emergency Management Agency and that Democratic opposition to it was all about politics.

"The American people are sick and tired of political games," said House Appropriations Committee Chairman Harold Rogers, R-Ky. "Shutting down the government and cutting off essential programs that our people rely on is bad enough, but leaving disaster-stricken families and communities in the lurch in their hour of greatest need is simply reprehensible."

It was unclear how the standoff would be resolved. The House and Senate had both planned to take next week off, but neither seemed likely to risk accusations of ignoring the thousands of Americans victimized by natural calamities or of allowing the government to shut its doors.

House passage represented a reversal from an embarrassing setback the chamber dealt its Republican leaders on Wednesday. On that day, the House rejected a nearly identical measure, shot down by Democrats complaining its disaster aid was too stingy and conservative Republicans upset that its overall spending was too extravagant.

The bill the House approved Friday morning contained just one change — an additional $100 million in savings from cutting a second Energy Department loan program, this one aimed at sparking new energy technologies.

That is the same program that financed a $528 million federal loan to Solyndra Inc., the California solar panel maker that won praise from President Barack Obama but has since gone bankrupt and laid off its 1,100 workers. The Obama administration had praised Solyndra as a model for green energy companies, but now Congress is investigating the circumstances under which the government approved the loan.

The gridlock over the spending bill was the third time this year the two parties have clashed over legislation whose passage both sides considered crucial.

In April with just hours to spare, the two sides reached agreement on a bill that averted a federal shutdown and provided money for government agencies through September. Then this summer, they battled for weeks before finally approving legislation extending the government's borrowing authority and narrowly preventing a historic federal default.

Against a backdrop of the 2012 presidential and congressional elections and angst over the country's dismal job market, this year's clashes have been intensified by the infusion of dozens of tea party Republicans who often show little inclination to compromise.

Wednesday's defeat of the spending bill was only the most recent time they have made life difficult for House Speaker John Boehner, R-Ohio. And it underscored the challenges ahead this fall as Congress tackles efforts to fix the economy, create jobs and try to control the $14 trillion national debt.

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Associated Press writer Laurie Kellman contributed to this report.

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House kills spending bill with disaster aid (AP)

WASHINGTON – In a rebuke to GOP leaders, the House on Wednesday rejected a measure providing $3.7 billion for disaster relief as part of a bill to keep the government running through mid-November.

The surprise 230-195 defeat came at the hands of Democrats and tea party Republicans.

Democrats were opposed because the measure contains $1.5 billion in cuts to a government loan program to help car companies build fuel-efficient vehicles. For their part, many GOP conservatives felt the underlying bill permits spending at too high a rate.

The outcome sends House Speaker John Boehner, R-Ohio, and his leadership team back to the drawing board as they seek to make sure the government doesn't shut down at the end of next week. It also raises the possibility that the government's main disaster relief program could run out of money early next week for victims of Hurricane Irene and other disasters.

Earlier Wednesday, Rep. Eric Cantor of Virginia, the No. 2 Republican in the House, had confidently predicted the measure would pass.

The Federal Emergency Management Agency has only a few days' worth of aid remaining in its disaster relief fund, lawmakers said. The agency already has held up thousands of longer-term rebuilding projects — repairs to sewer systems, parks, roads and bridges, for example — to conserve money to provide emergency relief to victims of recent disasters.

The looming shortage has been apparent for months, and the Obama White House was slow to request additional money.

The White House, a vigorous advocate of greater fuel efficiency for U.S.-made cars, welcomed the result of Wednesday's vote.

"We are pleased that the House of Representatives today rejected efforts to put politics above the needs of communities impacted by disasters," the White House communications director, Dan Pfeiffer, announced on his Twitter account.

The underlying stopgap funding measure would finance the government through Nov. 18 to give lawmakers more time to try to reach agreement on the 12 unfinished spending bills needed to run government agencies on a day-to-day basis for the 2012 budget year.

Forty-eight Republican broke with GOP leaders on the vote; six Democrats voted for the measure. Some of the Republicans also came from manufacturing states like Michigan, which benefit from the loan program.

The measure was originally designed by GOP leaders to pass with bipartisan support. Last week, Democratic Whip Steny Hoyer of Maryland and Rep. Norm Dicks of Washington, the top Democrat on the House Appropriations Committee, said publicly that they would vote for it reluctantly.

The underlying stopgap measure was opposed by conservative Republicans unhappy with the spending rates set by the measure, which are line with levels set by last month's budget and debt pact with President Barack Obama. That measure provides about 2 percent more money for Cabinet agency budgets than Republicans proposed when passing a nonbinding budget plan in April. More than 50 Republicans recently wrote to Boehner calling on him to stick to the earlier GOP budget.

"This bill was designed to pass with Democrat votes, in part based on assurances from Reps. Dicks and Hoyer," said Erica Elliott, spokeswoman for GOP Whip Kevin McCarthy of California. "Frankly, it's shocking as many Republicans voted for it as did."

Senate Democrats, who muscled through a stand-alone $6.9 billion disaster aid measure last week, called upon House GOP leaders to add additional disaster funding to whatever future stopgap measure rises from the rubble of Wednesday's vote. Unless Congress passes stopgap legislation by midnight on Sept. 30, much of the government will shut down.

"Consider making the disaster relief more robust" in the next bill, said Sen. Mary Landrieu, D-La. "Please talk to the Democrats."

Landrieu said FEMA Director Craig Fugate told her Wednesday that the agency's disaster relief fund may run dry on Tuesday. That would mean that there's no money to provide shelter, cash assistance or other help to victims of Irene, thousands of fires across Texas and northeastern states flooded by Tropical Storm Lee.

In the House, Democrats rallied against the measure because of the accompanying $1.5 billion in cuts to an Energy Department program that subsidizes low-interest loans to help car companies and parts manufacturers retool factories to build vehicles that will meet new, tougher fuel economy standards.

Democrats say cutting the loan program could cost up to 10,000 jobs because there wouldn't be enough money for all pending applications.

They estimated that $3.5 billion of loan subsidies has supported loans totaling $9.2 billion that created or saved 41,000 jobs in Tennessee, California, Indiana, Michigan, Delaware, Illinois, Kentucky, Missouri and Ohio. Ford Motor Co. and Nissan Motor Co. have already received loans; Chrysler Group LLC is awaiting final approval of a loan.

Republicans countered that $4 billion remains in the loan fund, plenty to tackle the 11 loan applications closest to being approved. They also noted that Democrats didn't complain loudly when identical cuts sailed through the House when it passed the FEMA budget in June as part of a homeland security spending bill.

"The loan program ... has had excess funds for years," said House Appropriations Committee Chairman Harold Rogers, R-Ky. "All entities in final loan stages will still get the funding they've worked for."

For his part, Dicks said he was persuaded by fellow Democrats that fighting against the loan program cuts was worth the risk of taking down the must-pass stopgap measure.

"Our people feel very strongly about it. It has created jobs," Dicks said in an interview. "It's working, and so they want us to fight against (the cut)."

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