Congressional leadership is busy trying to figure out how to squeeze more funding into this year’s budget. But concerns about the deficit are giving lawmakers pause before they spend tens of billions more in fiscal year 2010.

An annual rite of passage, the supplemental spending bill for years has been propelled by the need for additional cash for the wars in Afghanistan and Iraq. It’s well past time for this funding to be included in the regular budget so we don’t have to go through this rigmarole year after year. The must pass nature of these supplementals make them a honey pot for all sorts of pet initiatives, driving up the cost.

After some skirmishes, the Senate passed a bill ( See Chairman Inouye May 24 Floor Statement ) that is largely clean, totaling $59 billion, which includes $40 billion of war-related spending (Defense and State Departments), $13 billion in mandatory spending for Vietnam veterans exposed to Agent Orange, and $5 billion for disaster relief.

The Defense Department wanted the additional funds before Memorial Day. Now, Secretary Gates has indicated they have to have the funds by the 4th of July recess or he will have to do “stupid things” to keep DOD afloat.

But things have gotten bogged down in the House. Back in late May, Appropriations Committee Chairman David Obey (D-WI)announced a bill that included the items in the more recent Senate version, but also added $23 billion to fund teachers and another $1.7 billion for police and firefighters. There was also more than $5 billion for additional Pell education grants. There was a litany of other non-emergency spending. For example, the bill dumped an additional $18 billion (half of which is slated for default-prone nuclear reactors) into a largely untapped $50 billion energy loan guarantee program.

The administration has been complicating the situation. They wanted the energy loan guarantees to be added and most recently demanded that the $23 billion Education Jobs Fund be included in the package. But the president forgot to include an offset with his demand, which has left House Democrats in budgetary pickle. Reportedly, the cost has been whittled down to $10 billion, but that’s still a reach.

As the November elections approach, lawmakers are hearing deficit footsteps and are wary of adding to the vat of red ink by tacking on tens of billions in new spending. After months at a dull roar, the chorus to tap unspent stimulus funds as an offset is growing, while some argue that every dime of stimulus money should be spent as originally intended. But in reality, budgeting is about priorities, and you can’t have everything.

If forestalling teacher layoffs is a critical issue for the administration, then shaking the stimulus couch cushions for a few billion lying around shouldn’t be such a hard decision. Avoiding layoffs is stimulative. And considering a year and a half has gone by since the stimulus passed, shifting funding to teachers would just reflect updated priorities by providing further support in a shaky economy.

But this debate also raises another issue. In part because the federal government can run a budget deficit – most states cannot – Uncle Sam has been sending billions to the states to help with their budgetary challenges. At some point, the gravy train has to stop, and states need to balance their own books. Like the college graduate living in the parent’s basement, the time will come in the not too distant future when states will have to move on and give up the federal allowance.

It’s time to get the supplemental spending bill done. Congress and the administration should offset any extra spending with real cuts elsewhere. And it shouldn’t be too much to ask to adequately budget for these so-called emergency items in the pending FY2011 spending bills so we don’t find ourselves in the exact same spot a year from now.