If you have Aperture 3.3 or later and iPhoto 9.3 or later you can merge libraries with Aperture.
Otherwise the only way to merge Libraries is with the paid ($20) version of iPhoto Library Manager
isn't it true though that if the backup drive is large enough that there wouldn't ever be a loss of data?
If the backup drive never fills up, then Time Machine will never remove older files from it. However, the way Time Machine works, the drive will eventually fill up. Don't make the mistake of thinking that you will catch it before that happens. That's a dangerous assumption to make. And even if you decide to make that assumption, any files deleted from the hard drive and stored only in the Time Machine backup are not backed up anywhere else. If something were to happen to the backup drive (fire, theft, drive failure, etc), those files would be irrevocably gone.
If your iPhoto library has grown too large to fit on the internal hard drive, the only reasonable solution is to get an external hard drive or larger internal hard drive and store your library there. (And keep that data backed up somewhere, even if that requires also buying a larger backup drive.)