The passage of fiscal year 2009 appropriations bills for federal agencies remains bogged down due to a partisan battle over allowing amendments to the Interior, Environment and Related Agencies funding bill concerning domestic oil production. The chairmen of the House and Senate Appropriations Committees have both put a hold on further consideration of FY ’09 funding bills until a solution or compromise is reached.

Republicans are attempting to force the Democratic leadership in both houses to allow amendments to the Interior bills to permit oil drilling on the Outer Continental Shelf (OCS) and in the Arctic Natural Wildlife Refuge (ANWR). The Republicans are arguing drilling in these environmentally sensitive areas will increase domestic supply and are trying to pin the Democrats in the uncomfortable position of being seen as obstructing to efforts to lower gas prices.

Last month, when the House Appropriations Committee brought up the Labor, HHS and Education FY ’09 funding bill, Chairman David Obey (D-WI) angrily adjourned the markup when Ranking Member Jerry Lewis (R-CA) sought to offer the Republican version of the Interior appropriations bill that included oil-drilling language as a substitute amendment. Since then, Chairman Obey has refused to bring any fiscal year 2009 appropriations bills up for markup. In addition, none of the funding bills that have already passed the committee are being brought to the House floor.

In the Senate, Appropriations Committee Chairman Robert Byrd (D-WV) cancelled both the scheduled Interior subcommittee and full Committee markups of the Interior, Environment and Related Agencies funding bills. The Senate Appropriations Committee has already cleared nine of its 12 fiscal year ’09 appropriations bills.

The National Endowment for the Humanities, the National Park Service and the Smithsonian Institution are all funded under the Interior appropriations, so the fate of their budget for next year remains in limbo.

It is now highly unlikely that Congress will pass any non-defense agency related appropriations before the current fiscal year expires on September 30, 2008. It is widely expected that the federal government will operate under one or more continuing resolutions until the new president is sworn in next January. That means that federal agencies will operate at the current fiscal year 2008 budget levels until then.