After the huge fight over the House’s support for Electronic Government Fund, which pays for many important transparency programs like Data.Gov and USASpending.Gov, we had high hopes that the Senate would restore funding to prior levels. Our hopes have been dashed.

In a vote yesterday on legislation that has only come to light today, the Senate Appropriations Committee dropped E-Gov funding by an additional $11m below the House’s levels — and the House is already $15-20m below the FY 2010 funding level. The Senate merged the E-Gov Fund with the Federal Citizen Services Fund, and appropriated $39m for newly combined fund. The House had appropriated $50m.

By comparison, just two years ago (in FY 2010), the two funds received a total of $71m, with $34m for e-gov and $37m for the Federal Citizen Service Fund. (Last year the e-gov fund was shockingly cut to $8m, far out of line from the previous two years funding and partly the result of a strange budget cycle; the Federal Citizen Service Fund was appropriated $34m.)

What does this mean? It’s difficult to know how funds will be allocated between E-Gov and FCS programs, but we have some idea based on this letter from (former) federal CIO Vivek Kundra to Senator Tom Carper. Many programs will be terminated. Data quality will suffer. No fixes or improvements to current programs are likely.

That’s too bad. The public’s ability to see how the federal government spends money on USASpending.gov, for example, can help root out waste, fraud, and abuse, while promoting smart decisions in these tough economic times. Sharing government information on Data.gov can spur new businesses and more efficient government, if only agencies are appropriately encouraged and helped to make use of it. Senator Carper called earlier proposals to cut the E-Gov Fund “penny wise and pound foolish.” He’s right.

It’s also embarrassing. The President is about to give a speech before the United Nations on Tuesday about our new open government commitments, and this paltry funding level sends the wrong message. We risk abandoning our role as a leading advocate for open government.

Theoretically, the next opportunity to fix these funding levels is when the bill goes to the floor of the Senate. It’s unclear whether any amendments can be offered, and if so, what their likelihood of success would be. With the major differences between the House and Senate versions of the Financial Services and General Government Appropriations bill, what’s most likely is that Congress will pass a Continuing Resolution to keep the government open while dickering over these differences.

Under a CR, the General Services Administration, which administers these funds, will have to assume that the lower number — $39m — is the amount of funding allowed for the year. Programs will come to a screeching halt while Congress tries to agree upon a full year appropriations bill. (This start-again-stop-again approach also wastes tons of money.) With the upcoming election, each day will make agreement harder and harder. It is too bad that the Senate is willing to sacrifice a lot of transparency for such a small amount of money. Especially when small investments in transparency yield huge dividends.