The House of Representatives Saturday passed a continuing resolution (CR) that shaves $61 billion from the budget to fund the federal government through Sept. 30.

The CR, which cleared the Republican-led House 235-189, calls for significant cuts in spending for the Commodity Futures Trading Commission (CFTC), the Interior Department, the Environmental Protection Agency and the Low Income Home Energy Assistance Program (LIHEAP). The CR (H.R.1) now heads to the Senate. Rather than voting on the House measure, Senate Majority Leader Harry Reid (D-NV) is expected to bring a 30-day CR to the floor next week. The current CR expires on March 4.

House Republicans have threatened to shut down the federal government if their measure is not enacted into law.

The House resolution would slash the initial annualized budget of $168 million for the CFTC in the current fiscal year to about $112 million. As a result, the agency would be forced to cut its current staff of 680 to fewer than 440, which would make it difficult for it to enforce the reforms in the Dodd-Frank Wall Street Reform Act, CFTC Chairman Gary Gensler told Congress last week (see Daily GPI, Feb. 16).

It also would cut the Environmental Protection Agency's budget for the current year by about one-third, tying the agency's hands to regulate greenhouse gas emissions, The Hill reported. Interior also would have a slimmer budget for the remainder of the year, while spending for the LIHEAP program would be pared by $390 million.

The House rejected by 174-251 a Democratic amendment that sought to close a loophole that has allowed some oil and gas producers to avoid paying royalties on deepwater production in the Gulf of Mexico (GOM).

Due to an omission on Interior's part to include price thresholds in contracts that were signed in 1998-1999, producers holding those leases have been able to produce in the deepwater GOM without paying royalties -- regardless of the price of oil or gas (see Daily GPI, Oct. 19, 2006). The Government Accountability Office has estimated that the federal government has lost billions of dollars in royalties as a result. Congress and the federal government so far have been unsuccessful in efforts to get producers to pay the back royalties.

"These hugely profitable companies are tapping oil and gas resources that belong to the American people, selling it back to us and then reaping a massive profit," said Rep. Maurice Hinchey (D-NY), one of the sponsors of the amendment. "But the real kicker is that these oil companies are not paying one red cent to the public for the oil and gas they have extracted from publicly owned resources. They get it for free -- and we pick up the $53 billion tab."

©Copyright 2011 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.