(STAR) By Jess Diaz - The enactment of the proposed P1.227-trillion 2008 national budget hangs in the balance due to substantial differences between the House and the Senate versions of the spending bill.

Speaker Jose de Venecia Jr. earlier promised the nation that Congress would pass the budget before the end of the year so there would be no need for the government to reenact this year’s outlay.

The two chambers began reconciling their divergent versions of the appropriations measure yesterday, but talks were suspended indefinitely after a few minutes to allow a small panel to iron out their differences.

House Deputy Majority Leader Neptali Gonzales II said Albay Rep. Edcel Lagman, who is appropriations committee chairman, and his Senate counterpart, Sen. Juan Ponce Enrile, have been authorized to discuss the conflicting provisions in the Senate and House versions of the budget.

“We will convene again as soon as they come up with an agreement. But we will try to approve the budget before our Christmas break this weekend,” he said.

Gonzales conceded that the differences between the two chambers would be difficult to reconcile.

“By and large, they (senators) want to adopt President Arroyo’s proposal almost intact, while we want to realign more than P30 billion, most of it coming from debt service,” he said.

In passing its version of the budget, the Senate restored most of the funds realigned by the House, including the huge reduction in debt service, saying the President knows best where to appropriate taxpayers’ money.

This apparently negates the constitutional principle that it is the people’s elected representatives who control the nation’s purse. This has prompted some congressmen to label senators as “more tuta of and sipsip to Malacañang than us.”

The Senate cut the budget of the Department of Health by P4.3 billion. The House had augmented it by more than P10 billion, including P2 billion in “population management” (including family planning and birth control) funds.

Senators reduced by nearly P2 billion the education outlay, which congressmen increased by more than P4 billion.

Even the Department of Social Welfare and Development suffered a cut in the Senate version. Its funds were reduced by P612 million.

The Lagman committee had taken away about P2 billion from housing agencies because of their “low absorptive capacity,” meaning they are slow in implementing projects and won’t need the money next year.

However, senators restored the amount chiefly because it is Vice President Noli de Castro, their former Senate colleague, who is supervising housing agencies.

Though he is no longer a senator, De Castro continues to be a member of the Senate’s Wednesday Club headed by Senate President Manuel Villar Jr., whose family is into the housing development business.

Lagman said his panel would insist on realigning substantial sums from debt service that would be saved “as a consequence of the continuing appreciation of the peso vis-à-vis the US dollar.”

It would also insist “on the suspension of interest payments for loans which are challenged as fraudulent, tainted and/or useless pending their renegotiation or condonation,” he said.

“We must also expunge from the budget the Executive’s premature allocations of about P5 billion for interest payments for projected program loans still in the pipeline. We must not immobilize precious funds which cannot be utilized during the fiscal year,” he said.

If Congress fails to pass the budget before yearend, approval may take place in February or March next year.

Last year, the two chambers failed to pass the spending bill for 2007 before yearend. It was approved in April or May.

Congress did not approve a budget for 2006 because the Senate and the House could not agree on the scrapping of the P8-billion Kilos Asenso and Kalayaan Barangay funds.

Congressmen initially supported the scrapping, but changed their mind when Mrs. Arroyo insisted on the retention of the funds. That sent the bicameral conference on the budget into a deadlock. The conference never resumed.

Half of the Kilos Asenso and Kalayaan Barangay funds have been restored in the proposed 2008 budget.

Chief News Editor: Sol Jose Vanzi

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