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Obama summons Boehner for budget talks

Last Updated 10:35 a.m. ET

WASHINGTON - President Barack Obama summoned the top Republican in Congress to the White House on Tuesday for talks aimed at averting a government shutdown this weekend as talks on a bill that would both fund federal agencies through the end of September and impose immediate spending cuts have stalled.

House Speaker John Boehner is meeting this morning with Mr. Obama, Vice President Joe Biden and Senate Majority Leader Harry Reid.

White House spokesman Jay Carney told reporters the president is still confident Republicans and Democrats can reach an agreement to fund the government through the end of the year, even as a Friday deadline nears.

Carney sidestepped questions about whether Mr. Obama would support a Republican-backed week-long stopgap bill to prevent a shutdown. Boehner's temporary measure includes $12 billion in immediate spending cuts, but also enough money to operate the Pentagon through the end of September.

Carney says the White House believes continuing to fund the government with short-term spending bills (as has happened twice this year when Congress could not agree to a 2011 budget) is not good for the economy.

President Obama has warned that without a deal the ensuing government shutdown would "jeopardize our economic recovery" just as jobs are finally being created.

As they left a strategy session late Monday night, House Republicans said talks with Democrats had stalled.

Rep. Hal Roger, R-Ky., Chair of the House Appropriations Committee, said, "We made good progress Saturday, but come Sunday things just stopped."

It is unclear which side would absorb public blame and anger for such a dramatic turn of events - each side says the other would be the cause - but there was likely to be political damage, and mainstream members of both parties say they want to avoid a shutdown.

CBS News Congressional correspondent Nancy Cordes reports Republican leaders angrily accused Democratic negotiators Monday of "gimmicks" and "phony accounting" full of "smoke and mirrors," after they refused to discuss Republican priorities - like stripping funding for EPA enforcement, federal money for Planned Parenthood, and for the president's healthcare law.

"Liberals are clearly responsible for a possible government shutdown," according to Rep. Joe Wilson, R-S.C.

Democrats accuse the Republicans of pushing spending cuts that are harmful, and of pressing their own social agenda to the must-pass spending bill.

Democrats insist the talks are progressing normally - and that Republicans are simply posturing for Tea Party members demanding big cuts.

"Tea Party Republicans refuse to recognize that their budget is simply an appalling proposal," said Senate Majority Leader Harry Reid, D-Nev.

Sen. Chuck Schumer, D-N.Y., told the National Review, "We take it for granted that because of the intense political pressure being applied by the Tea Party, the Speaker needs to play an outside game as well as an inside game. As long as he continues to negotiate, it's OK by us if he needs to strike a different pose publicly."

Failure to reach a deal for the rest of this budget year (which ends on Sept. 30) could lead to a partial shutdown of the government when spending authority expires at midnight on Friday.

Appearing on CBS' "The Early Show" this morning, House Budget Committee Chairman Paul Ryan, R-Wis., insisted that the GOP-run House was prepared to pass a budget bill for the rest of the year, and that it was the Democratic-run Senate that was holding things up: "We will pass it out of the House; the question is whether the Harry Reid Senate will pass it or not.

Nearly six weeks ago, the House passed a bill calling for $61 billion in cuts in discretionary spending for the remainder of the year. Senate Democrats balked and never took up the measure.

Instead both houses of Congress have passed two short-term spending laws to keep government running, while cutting $10 billion out of this year's budget. That appropriation runs out Friday.

"We're not looking for a shutdown," Ryan told anchor Erica Hill. "We're looking for a down payment on budget reduction. The Senate is yet to pass a single bill to prevent a government shutdown."

On a separate matter - but one looming over this week's negotiations for the 2011 budget - is the Republican plan being unveiled Tuesday that mixes spending cuts in virtually all areas with tax breaks for corporations and a fundamental restructuring of Medicare and Medicaid.

In a new Wall Street Journal op-ed, Ryan claims his plan would slash $6.5 trillion from the president's budget over the next ten years.

Part of his plan is to overhaul Medicare by slowly replacing the government health plan for seniors with government subsidies for private health care plans - what Ryan says are not vouchers but "Medicare premium-support payments" - that may not cover the full cost.

Republicans also propose to sharply cut projected spending on the Medicaid state-federal health program for the poor and disabled and transform it into a block grant program that gives governors far less money than under current estimates but considerably more flexibility.

On "The Early Show: Ryan said governors are requesting the change: "We're getting letters from dozens about this," he said. "Medicaid is breaking right now. It's going insolvent. ... It's unsustainable and it ends up giving people second class health care, not getting good access to good care."

The budget proposal would also lower the corporate tax rate.

Citing a study by the conservative Heritage Center for Data Analysis, Ryan says the GOP plan will create more than a million private-sector jobs next year and lower the unemployment rate to 4 percent by 2015.

Spending on domestic programs would be returned to levels at or below 2008 levels. Despite the proposed cuts, Ryan's plan would not balance the budget by the end of the decade, as it promises not to raise taxes and not to change federal retirement benefits for people age 55 and older.

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