With the House still mulling an overhaul of the Appropriations Committee, the Senate is facing a major hurdle in reorganizing its own spending panel because of confusion over how to hand out money for intelligence activities.

The Senate is increasingly likely to jettison the already-approved plan to create an Appropriations subcommittee devoted solely to intelligence activities — one of the major internal reforms it adopted last fall regarding the oversight of the spy community.

According to interviews with Senators as well as House and Senate aides, the plan to adopt an intelligence subcommittee is in peril largely because of laws requiring that the intelligence budget remain classified.

When the Senate debated its overhaul of the CIA and other intelligence agencies last fall, it also passed by an overwhelming margin a series of internal reforms that included the creation of an Appropriations subcommittee solely devoted to intelligence.

But after the House and Senate reached a compromise on their competing intelligence measures, they passed a sweeping law in December that contained a provision requiring that the overall intelligence budget remain classified.

Those who are opposed to the new subcommittee point to the fact that creating an intelligence panel would make the spy network’s budget impossible to hide. Since a well-publicized overall discretionary spending budget would presumably be produced, anyone interested could simply add up the total of the other 12 subcommittees to determine how much the 13th panel was spending.

The new Appropriations chairman, Sen. Thad Cochran (R-Miss.), said in a brief interview Thursday that he doesn’t feel the October resolution bound the committee to organize in any certain way.

“There’s some question whether that really amounts to an expression of sentiment or whether it’s a law,” he said.

The House is moving ahead with its own reorganization plan and has not shown any interest in creating the intelligence subcommittee.

“It looks very unlikely the Senate is going to set up the intel subcommittee,” said one aide familiar with the discussions.

Cochran said last week that he’s open to the discussion and would talk it over with leadership — a discussion that could come at the bicameral GOP retreat this weekend, following some staff-level meetings on the subject this week. “We’ll just have to talk it through,” he said.

Those who support creating the new subcommittee are quick to point out that with some digging, observers can already assemble a pretty good estimate of how much money is spent on intelligence — so creating its own subcommittee should not result in a big disclosure of classified material.

If the Senate sticks to its plan and organizes Appropriations to include an intelligence subcommittee, it could set off a chain reaction of jockeying for a panel that would control an estimated $40 billion in intelligence spending and create a series of openings down the line of subcommittee chairmanships, the positions frequently referred to as the “college of cardinals.”

The most intriguing possibility would be if Sen. Richard Shelby (Ala.) — the seventh-ranking Republican on Appropriations — claimed the intelligence gavel. That would set up a confrontation with his longtime rival, CIA Director Porter Goss. Goss chaired the House Intelligence Committee at the same time Shelby served as the top Republican on Senate Intelligence, and the duo frequently sparred in public.

After a leak in summer 2002 from a joint House-Senate inquiry into the Sept. 11, 2001, terrorist attacks, Goss and his Senate counterpart, then-Chairman Bob Graham (D-Fla.), ordered the Justice Department, CIA and National Security Agency to conduct a criminal inquiry into the leak. The investigation focused on Shelby, but Justice never brought charges and instead handed over its case to the Senate Ethics Committee, which has yet to begin its probe.

Shelby, who chaired the Transportation, Treasury and general government subcommittee in the previous Congress, may be loath to give up such a desirable panel just as Congress is prepared to pass a massive highway bill. Shelby’s office declined comment on his intentions.

The more senior members of Senate Appropriations are expected to stay in their current cardinal positions.

While aides said that no pressure to maintain the status quo was exerted by former Chairman Ted Stevens (R-Alaska), Stevens would likely be a big winner if the current slate of subcommittees remains intact. Most of the intelligence budget is tucked away inside the Defense appropriations panel, which Stevens will continue chairing now that he has been term-limited out of leading the full committee.

With the continued uncertainty over how the Senate organizes its subcommittees, it looks more likely that the two chambers will end up with a potentially unwieldy set of subcommittees that do not line up in jurisdiction or size.

Re-designing Appropriations has been a pressing item on the House agenda since December, when Majority Leader Tom DeLay (R-Texas) floated a proposal to reduce the number of subcommittees from 13 to 10 while also changing which panels oversee which federal agencies.

Newly crowned House Appropriations Chairman Jerry Lewis (R-Calif.) has expressed a desire to push forward with a significant reorganization, though he has not yet settled on any one plan for moving forward, Republican aides say.

“It’s very much an unsettled question,” said a House GOP aide.

Lewis huddled with the top four GOP leaders last Wednesday to begin the discussions, and more meetings on the subject are expected this week.

Despite current uncertainty over the details, several senior Republican aides said they were confident that Appropriations would adopt some kind of restructuring plan.

“I think it’s very likely something is going to change,” said a GOP leadership aide. “If you can’t do it when you’ve got a new chairman coming in, when can you do it?”

Significantly, Lewis and the leadership appear poised to move forward even if Cochran doesn’t mirror their changes on the Senate panel.

While there is no rule that requires both chambers’ Appropriations committees to have the same structure, the two panels have historically organized in parallel fashion. Aides said it certainly is possible that the two committees could wind up with different subcommittee jurisdictions.

“I think that our side is prepared to go forward with something if it’s achievable and you’re not breaking too much china,” said another leadership staffer. “If the Senate can’t join us and get it done, so be it. We’ll figure out the conferences a different way.”

If the House does move forward without waiting for the Senate’s agreement, it would mark a repeat of the Appropriations reorganization at the start of the last Congress.

In February 2003, then-House Appropriations Chairman Bill Young (R-Fla.) pushed through a plan to carve out a new Homeland Security subcommittee without waiting for the Senate’s assent.

At the time, House Republicans calculated that the Senate would never move forward on reorganization without a push, and the Senate spending panel soon adopted the same changes the House had.

On a parallel track, the House Republican Steering Committee must convene soon to formally interview subcommittee chairmanship candidates.

Steering is scheduled to meet Tuesday afternoon to fill remaining vacancies on so-called “B” committees. Cardinal interviews are not currently on the agenda and it is not clear whether Steering will have time to meet again before House and Senate Republicans depart Thursday for their bicameral retreat at the Greenbrier Resort in West Virginia.

The new-look Appropriations panel could simply redistribute jurisdiction, or it might actually follow DeLay’s suggestion and reduce the number of subcommittees.

If that occurs, Republican aides said Rep. Ernest Istook (Okla.) appeared to be the current cardinal most likely to lose his gavel.

“If somebody was going to lose out, he would be the top candidate,” said an aide to a senior Steering Committee member.

While he has more seniority than four other cardinals, Istook — the chairman of the subcommittee on Transportation, Treasury and independent agencies — angered many of his colleagues last year when he wrote several GOP lawmakers’ projects out of his spending bill in response to their support for increased Amtrak funding.