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Congress to Attack Money Woes Before Christmas

Republican leaders in Congress are hoping to complete a bill to curb the growth of student loans, Medicaid and other benefit programs before Christmas, though they may delay extending tax cuts until next year.

Staff aides and lobbyists are skeptical about the prospects of finishing work in the next few weeks on five-year spending cuts of up to $50 billion.

But failure to deliver would disappoint GOP loyalists eager to see their party burnish its budget-cutting credentials, and would push the contentious issue into January or February, muddying the agenda for 2006.

The House returns for a scheduled two-week session on Tuesday; senators do not come back until next week.

House Speaker Dennis Hastert, R-Ill., and Senate Majority Leader Bill Frist, R-Tenn., say they are "deeply committed to restraining spending" and hope to finish the cuts before Christmas.

The chances for completing an accompanying tax cut bill is more doubtful as Congress wraps up a fall agenda complicated by Hurricane Katrina.

"On the spending side I believe we will finish," Frist said. "I cannot predict on the tax side."

The centerpiece is the budget cut bill, the first attempt in eight years to check the growth of Medicaid and other benefit programs. Their costs rise automatically each year to reflect inflation and population growth, unless Congress reduces them.

The House and Senate have approved separate budget bills that take divergent approaches:

—the House would trim spending by $50 billion over five years, compared with almost $35 billion in the Senate's version.

—the Senate would put those savings into initiatives such as college aid and maintaining physician reimbursements under Medicare. The House measure contains far less spending.

—the Senate voted to go ahead with drilling for oil in a wildlife refuge in Alaska. GOP leaders in the House were forced to scuttle that idea to get the budget measure approved. Powerful senators such as Ted Stevens, R-Alaska, and Pete Domenici, R-N.M., are insisting that a final compromise bill include the drilling measure.

"Because these bills are so fundamentally different, the next two weeks will look a lot like a two-minute drill in football," said GOP lobbyist Jack Howard, a veteran of Capitol Hill and the Bush White House.

"They're going to have to drive the length of the field and a lot of things are going to have to happen very fast," he said.

Added Tom Kahn, Democratic staff director for the House Budget Committee: "I think they're going to have one heck of a time getting this thing done by the end of the year, and I would be surprised if they could do it -- very surprised. There's just too many difficult and controversial issues."

As negotiations continue between the House and Senate on the spending cuts, House GOP leaders will press ahead to garner support for a bill to preserve the tax cuts won by President Bush, but which are set to expire unless lawmakers extend.

Last month, the leaders put off an attempt to pass the tax bill because of resistance from lawmakers who were reluctant to vote for the cuts so quickly after approving reduced spending for Medicaid, food stamps and other programs aimed at the poor.

The GOP tax bill would extend the reduced tax rates for capital gains and dividends. A companion Senate plan that passed with bipartisan support does not included those provisions; it would provide relief middle-class wage earners from the alternative minimum tax.

That tax was designed to prevent wealthy individuals from avoiding taxes, but now falls on an increasing number of middle-class families.

Other items on the legislative agenda over the next two weeks are:

—the Patriot Act. The anti-terrorism law probably will be extended.

—a $453 billion defense spending bill. Lawmakers probably will send to the president the measure, which contains a $50 billion infusion for the war in Iraq.

—Bush's request to shift $17 billion already approved for hurricane relief to new purposes such as rebuilding highways, levees and federal facilities. The plan also may get a congressional OK.

Less certain is the fate of a $602 billion spending measure for the departments of Labor, Education and Health and Human Services. The House has rejected a negotiated compromise with the Senate. It would have cut spending for programs by about $1.4 billion over the levels of the prior year.

The prospects are not clear for the president's $7.1 billion request to combat a potential bird flu pandemic. Conservatives in the House oppose rubber-stamping the request without finding spending cuts elsewhere in the budget.

At a GOP retreat last week, Frist, a medical doctor, made a plea on behalf of the money.