The GOP-controlled House is on track to pass $3.7 billion in disaster relief as part of a must-pass bill to avert a government shutdown at the end of the month.
House passage of the bill Wednesday would come over the opposition of most Democrats, who oppose it because it contains $1.5 billion in cuts from a government program to help car companies build more fuel-efficient vehicles. That money would pay for the most urgently needed portion of the disaster aid.
The Energy Department program 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 program could cost up to 10,000 jobs because there wouldn't be enough money for all pending applications.
"While the government has a responsibility to fund disaster response in places that were devastated by Hurricane Irene or other natural disasters, it is unconscionable to use funds designed to create jobs in manufacturing states to pay for it," Reps. Gary Peters, D-Mich., and Anna Eshoo, D-Calif., said in a letter to House Speaker John Boehner, R-Ohio.
They credited $3.5 billion of loan subsidies with supporting 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.
House GOP leaders also have to shore up support from some tea party Republicans who say the underlying stopgap measure would allow the government to spend too much. It lives within a new spending cap set by last month's budget and debt deal, but more than 50 conservatives say GOP leaders should still press for lower spending levels for the day-to-day operations of Cabinet agencies set by annual spending bills.
After the measure passes the House, a battle looms with Senate Democrats. The two sides are divided over how much disaster aid to provide and whether any of it should be paid for with offsetting spending cuts.
Senate Majority Leader Harry Reid, D-Nev., said that once the stopgap measure passes the House, he'll move to substitute the Senate's $7 billion aid package for the House's version. It will take at least seven Republicans to join with majority Democrats to win the 60 votes likely required to defeat GOP blocking tactics. Ten Republicans voted with Reid last week to pass the stand-alone disaster aid measure, but their votes can't be taken for granted now. Tea party favorites like Sens. Marco Rubio, R-Fla., and Pat Toomey, R-Pa., were among those who voted with Reid last week, but the partially paid-for House version may be more to their liking.
Senate Minority Leader Mitch McConnell, R-Ky., predicted the conflict could be worked out in time for the Senate to make a Thursday night getaway to a weeklong recess. Such a scenario probably depends on Republicans prevailing.
"Congress always responds appropriately to disasters," McConnell said. "We're having a discussion about the appropriate way to do that, and I'm confident it will be resolved."
Reid, however, is spoiling for the battle. "We're not going to cave in on this," he said.
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 that begins Oct. 1.