WASHINGTON, Sept 28: Tied up with debates over homeland security and Iraq, the US Senate is now unlikely to renew budget rules credited with helping restrain federal deficits over the last decade before they expire on Tuesday.

But key lawmakers still insist Congress will put the pay-as-you-go, or PAYGO, rules — which make it harder to pass new tax cuts or expand social programs such as Medicare — back in place before it adjourns in the next few weeks.

We have bipartisan agreement to do that, said Senate Republican Leader Trent Lott of Mississippi. I think that an overwhelming bipartisan majority will vote to put the PAYGO provisions back in there.

Those rules require 60 votes in the 100-member Senate for any tax cut or permanent increase in spending on entitlement programmes that would increase the US budget deficit. That forces lawmakers to find ways to pay for such proposals by cutting spending elsewhere in the budget or by raising taxes.

With the United States facing mounting budget woes, advocates of fiscal responsibility — including Federal Reserve Chairman Alan Greenspan — have expressed alarm at the prospect of the rules being allowed to lapse.

Failing to preserve them would be a grave mistake, Greenspan warned earlier this month.

After four consecutive years of surpluses, the US government will run deficits of around $150 billion this year and in 2003, and the federal budget will not come back to balance until 2006, the Congressional Budget Office predicts.

At the same time, Congress’ annual budget and spending processes are deadlocked ahead of November’s high-stakes elections — where small swings could shift party control in both the House of Representatives and Senate.

The Senate failed to agree on a formal budget blueprint this year for the first time since 1974. And Congress has so far not cleared a single one of the 13 annual spending bills required to fund government agencies in 2003.

The PAYGO rules were used this year to block several major legislative proposals which could be resuscitated if they lapse, including efforts to add a prescription drug benefit to Medicare and to permanently repeal the estate tax.

Also expiring on Tuesday are the so-called budget caps which help enforce limits how much money Congress can spend each year to directly fund government agencies. Those are not expected to be renewed because of a continuing stand-off between the White House and Congress over government spending.—Reuters