By Corey Boles
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The U.S. Senate Thursday evening approved a measure continuing federal government funding at fiscal 2009 levels until mid-December, when Democrats hope the debate on a health-care overhaul has been completed.
Without the extension, the federal government would be forced to shut down Sunday at midnight. It is the second continuation of federal government funding at last year's levels. The move was made necessary because Congress has still been unable to complete its appropriations work from fiscal 2009.
The House voted earlier Thursday to approve the measure. It will now proceed to the White House for President Barack Obama's signature.
Both the House and Senate votes were largely along partisan lines.
Congress must pass 12 spending bills each year to keep the various departments and agencies of the federal government running. In fiscal 2009, which ended on Sept. 30, it fell short of this mark. This is in no small part due to the focus on piecing together health-care legislation, which has dominated lawmakers' attention for several months.
The legislation also continues current elevated federal home-loan-guarantee levels through 2010. In response to the housing crisis, the federal government raised the levels of loans that could be guaranteed by Freddie Mac (FRE) and Fannie Mae (FNM) and other federal housing agencies. Those levels would revert to their lower caps by the end of the year without action by Congress.
The Treasury issued a statement Thursday urging Congress to continue the elevated loan guarantees.
The bill also extends until mid-December the highway bill, which sets the formula for federal reimbursement of state road and bridge construction projects. The House and Senate are divided over whether to proceed with multi-year and costly legislation to reauthorize the highway program, or to opt for a shorter-term measure to delay the more comprehensive legislation. Both the Obama administration and the Senate want to delay the longer reauthorization until after the 2010 election.
The various continuations were attached to one of the 12 must-pass spending bills, one funding the Interior Department and related agencies in fiscal 2010. That bill allocates $32.2 billion in spending for initiatives including a program to clean up the Great Lakes and funding to combat forest fires.
Many Republicans in the House and Senate voted against the measure, citing concerns that it increases the budgets of the federal agencies it covers by 17% compared with fiscal 2009.
"The bottom line for me is the conference agreement simply spends too much money," Rep. Michael Simpson (R., Idaho) said on the House floor.
-By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com