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Senate advances $54 billion transportation, housing bill

A woman walks on a path in the Berry Farm housing project in Ward 8 of Washington November 20, 2012. REUTERS/Kevin Lamarque
A woman walks on a path in the Berry Farm housing project in Ward 8 of Washington November 20, 2012. REUTERS/Kevin Lamarque

By David Lawder

WASHINGTON (Reuters) - The Senate on Tuesday advanced a $54 billion measure that increases funding for transportation and housing projects, setting up a spending clash with Republicans in the House of Representatives that threatens a government shutdown on October 1.

The Senate voted 73-26 to clear a procedural hurdle that allows for consideration of amendments and a simple majority vote on the funding bill, drawing the support of 19 Republican senators.

The funding measure for basic infrastructure projects, block grants for cities and public housing draws a sharp contrast between the spending paths laid out by Senate Democrats and House Republicans, who are considering a $44 billion measure.

The House Republicans are passing their 12 appropriations bills for the new fiscal year under a discretionary spending cap of $967 billion in an effort to keep savings from the automatic "sequester" spending cuts in place. They want to divert a larger share of that reduced spending pie to defense and security agencies, subjecting domestic programs to bigger cuts.

Senate Democrats, meanwhile, assume that the sequester cuts will be replaced by tax hikes and savings elsewhere and are applying a $1.058 trillion cap to their bills - $91 billion more than the House.

There is little chance of that difference being resolved as the September 30 fiscal year-end approaches, so Congress would need to pass a stop-gap funding measure to avoid a government shutdown on October 1.

The Senate measure would mark an increase of $2.3 billion in spending on transportation and housing - mostly urban - over the 2013 level. The House measure would cut it by $7.7 billion.

Democrats argued that delaying needed work on airports, roads and public housing will simply cost more in the future, and say such projects help the economy.

"Steel rusts, asphalt wears out, buildings need to be repaired and maintained," said Senate Appropriations Committee Chairwoman Barbara Mikulski, a Maryland Democrat. "It's not politics, it's physics. We have to make investments today so that our nation can grow."

Both Tuesday's procedural vote and an Appropriations Committee vote drew significant Republican support, indicating that the party's appetite for continuing the deep spending cuts may be waning in the Senate.

But top Senate Republican Mitch McConnell said any spending deal must maintain savings from the sequester - about $1.2 trillion over 10 years - which were set in motion by a budget deal two years ago. He dismissed Democratic demands for additional revenue.

"I have no interest in reopening the subject of additional taxes. The government in my view doesn't need more revenue," McConnell told reporters after the Senate procedural vote.

(Reporting by David Lawder; Editing by Doina Chiacu and Dan Grebler)

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