Budget talks go nowhere, raising fear of federal shutdown

McClatchy NewspapersApril 5, 2011 

WASHINGTON — President Barack Obama and congressional leaders failed to agree Tuesday on a plan to keep the government funded past Friday, heightening fears that many federal activities could shut down this weekend.

Obama met for an hour and 20 minutes at the White House with House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., who’ve been trying for weeks to iron out a compromise.

“We’re now closer than we’ve ever been to getting an agreement,” Obama said after the meeting. “The only question is whether politics or ideology are going to get in the way of preventing a government shutdown."

At the Capitol, that appeared to be happening, as the public rhetoric grew harsh. If Reid and Boehner, who later reconvened for private talks, don’t reach a deal Tuesday night, Obama wants them back at the White House for more talks Wednesday.

“And if that doesn’t work, we’ll invite them again the day after that,” the president said, “and I will have my entire team available to work through the details of getting a deal done."

Government spending authority runs out Friday. If no agreement is reached on providing new funding for the rest of the fiscal year, through Sept. 30, many federal activities are expected to begin shutting down Saturday, such as museums, monuments and national parks.

Obama and his aides refused again to give specifics of their contingency plans for a shutdown. In the past, hundreds of thousands of “non-essential workers” across the country have been told not to report to federal work during budget shutdowns, while others deemed essential did go to work. So far, the Obama administration isn’t saying which workers will be told to stay home and what federal functions won’t be performed.

White House Press Secretary Jay Carney said the federal budget office would start sending agencies memos in coming days about which operations to close if necessary. He said that the uniformed military would continue to get paid, but he referred questions about details to the White House Office of Management and Budget, which didn’t respond to questions, as it hasn’t for days.

Boehner offered a tentative solution Tuesday: extending the funding deadline another week while cutting $12 billion from current spending and funding the Pentagon for the rest of the fiscal year.

Forget it, Obama said.

“We’ve already done that twice,” he said, referring to previous short-term budget extensions. “That is not a way to run the government. I can’t have our agencies making plans based on two-week budgets.”

Democrats are willing to cut $33 billion from spending for the final six months of this fiscal year. The House of Representatives, on a party-line vote, approved $61 billion in cuts on Feb. 19 and added dozens of social-policy changes, such as cutting funds that would implement the 2010 health care overhaul legislation.

Privately, people close to the budget talks say that most of those social changes are likely to be dropped. But in return, Republicans want to cut more than $33 billion.

The budget drama unfolded Tuesday on two levels: Publicly, leaders hardened their rhetoric, but privately, signals suggested that a deal was in reach.

Reid’s public tone was the angriest. After the White House meeting, he accused Republicans of kowtowing to the tea party, the conservative grass-roots movement that helped elect dozens of GOP congressmen last year.

“We thought for several days we were very close to an agreement,” Reid said, but the White House meeting and other negotiations “really indicated to me … that the leadership in the House is being guided by the tea party.”

Boehner fired back. “If the government shuts down, the American people will know it was because Senate Democrats failed to do their job,” he said. “We can still avoid a shutdown, but Democrats are going to need to get serious about cutting spending, and soon.”

Meanwhile, some conservatives indicated that they were eager to end this scrap and move ahead with negotiations on the budget for fiscal 2012, which begins Oct. 1. House Budget Committee Chairman Paul Ryan, R-Wis., unveiled a 73-page plan that contained sweeping budget changes — and restructuring of the government — that many conservatives have long sought. That’s where many Republicans want to take their stand, not behind the relatively minor spending cuts over the next six months that are hanging up Reid and Boehner.

”We’re trying to get to where a long-term solution is at hand,” said House Majority Leader Eric Cantor, R-Va.

Ryan’s plan would reduce spending below Obama’s projected levels by $6.2 trillion over the next 10 years. His Republican-majority committee plans to write legislation incorporating his proposals Wednesday. The full House is expected to consider it next week.

The plan could provide conservatives with a convenient way to accept a deal this week for fiscal 2011, followed by a vote next week for Ryan’s plan, which tackles long-term issues and would make dramatic changes to Medicare, Medicaid and the tax system.

Ryan’s plan follows other recent budget proposals, notably the bipartisan National Commission on Fiscal Responsibility and Reform's report in December, which spelled out how to cut spending by $4 trillion over a decade, and President Barack Obama’s $3.73 trillion fiscal 2012 budget, which would add $13 trillion to the national debt over the next decade.

Ryan’s plan resists cuts in defense spending other than those that Defense Secretary Robert Gates already proposed. It retains the Bush-era tax reductions for top earners, which Obama wants to end eventually. And it would make big changes in how beneficiaries get Medicare and Medicaid assistance.

Medicaid would become a “block grant” program with Washington sending money to state capitals, which would decide how much to spend on recipients. Currently Medicaid is a federal-state shared program that provides health coverage to the poor according to rules set by Washington.

For Medicare, which pays for medical services for those 65 and older, House Republicans would have recipients choose private-insurance plans and the government would subsidize those plans. People now 55 and older would retain the existing Medicare plan.

Democrats and liberal groups bitterly criticized Ryan's plan.

“Representative Ryan’s proposal is partisan and ideological,” Senate Budget Committee Chairman Kent Conrad, D-N.D., said in an illustrative statement. “He provides dramatic tax cuts for the wealthiest, financed by draconian reductions in Medicare and Medicaid. His proposals are unreasonable and unsustainable.”

(Steven Thomma contributed to this article.)

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