Shutdown looms as Dems, GOP can't close deal
WASHINGTON - Talks intensified on reaching a deal on long-overdue legislation to finance the government through the end of September, but Democratic and Republican leaders emerged no closer to an agreement to prevent a partial shutdown of federal operations at midnight Friday.
A White House meeting Tuesday that included President Barack Obama, Republican House Speaker John Boehner and Democratic Senate Majority Leader Harry Reid failed to produce the hoped-for breakthrough.
A visibly frustrated Mr. Obama emerged from the failed negotiation session and declared it would be "inexcusable" to allow "politics and ideology" to force Washington to close many of its doors in a dispute over what amounts to about 12 percent of what the U.S. government spends.
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"We are closer than we have ever been to an agreement. There is no reason why we should not get an agreement," Mr. Obama said.
The war of words continued, with Speaker of the House John Boehner calling Mr. Obama's proposed budget cuts smoke and mirrors, reports CBS News chief White House correspondent Chip Reid.
"You've heard me say for the last three months that we have no interest in the government shutting down but we are interested in cutting spending in Washington," Boehner said.
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Democrats argue that the two sides had settled on cutting $33 billion from the budget this fiscal year and Mr. Obama said it's time the Republicans put compromise in front of politics.
"Nobody gets 100 percent of what they want and we have more than met Republicans halfway at this point," he said.
Boehner, meanwhile, denied the claims that both sides had agreed to the $33 billion cuts, saying Republicans "will not be put in a box" of accepting options they refuse to endorse.
Talks also took place Tuesday between Boehner and Reid at the Capitol, with both sides reporting a private and productive discussion.
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But both sides appear to be up against the wall - if they don't reach an agreement by Wednesday, it would be difficult to pass a spending bill of any form by Friday, reports CBS News congressional correspondent Nancy Cordes.
With the shutdown looming, preparations are being made. Each agency has been instructed to decide which of its workers are considered essential or nonessential. If they're deemed non-essential, they'd be prohibited from working - even checking their Blackberry - or they could get fired in the event of a shutdown.
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The partial shutdown would close national parks, shutter passport offices and turn off the Internal Revenue Service taxpayer information hotline just a week before the April 15 filing deadline. But essential federal workers would stay on the job, including the military, FBI agents and Coast Guard. Social Security payments would still go out and the mail would be delivered.
The unusually heated spending fight grows from many sources this year, first among them the coming 2012 presidential election and the heightened political jostling as the campaign heats up. Further fueling the dispute is the power of newly elected Republican-allied tea party members in the House of Representatives. They won their seats last November on promises of less spending, smaller government and no tax increases. They are making it hard for Boehner to compromise.
The spiraling U.S. debt, partly a result of massive federal spending to rescue the financial system and the economy during the Great Recession, has become a major issue in American politics. Republicans, particularly the most conservative among them, have made federal red ink a top policy issue, declaring it a threat to American security. The conservative ideology pushes for less government involvement in Americans' day-to-day lives. The Republicans do not address the major tax cuts implemented during the administration of former President George W. Bush, a key factor in declining government revenues, and, therefore, increasing debt.
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Mr. Obama and Democrats largely agree there is a major debt problem, but it is seen as less urgent. Democrats say Republican budget cutters will cause a collapse of the fragile economic recovery while also imposing too much pain on needy or working-class Americans who rely on government help, especially in difficult economic times. While improving, U.S. unemployment is still nearly 9 percent.
Immediately at issue in the budget fight is money to run government agencies for the remainder of this fiscal year, which ends Sept. 30. Before they ceded power to Republicans in the House in January, Democrats, too, had not passed legislation to fund the government for the entire year.
Since Republicans took over and Boehner became House speaker, he has engineered a pair of stopgap bills that have so far cut $10 billion from the estimated $1.2 trillion budget. Senate Democrats and Mr. Obama agreed to those temporary infusions of money, hoping this final run at a funding law would produce a compromise acceptable to both sides.
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That has not happened and a frustrated Mr. Obama said he would be calling Boehner back to the White House Wednesday and again on Thursday if a deal is not struck.
There was at least a hint of flexibility Tuesday. According to Democratic and Republican officials, Boehner suggested at the White House meeting that fellow Republicans might be able to accept a deal with $40 billion in cuts. That's more than negotiators had been eyeing but less than the House seeks.
The speaker's office declined to comment, and Boehner issued a statement saying, "We can still avoid a shutdown, but Democrats are going to need to get serious about cutting spending — and soon."
Short of a long-term deal, Boehner has proposed an agreement that would keep the government running for one more week and cut another $12 billion in spending.
Mr. Obama said he would accept another short-term funding extension, of only two or three days, to get a longer-term deal through Congress. But he ruled out a longer extension to allow negotiations to continue.
"That is not a way to run a government. I cannot have our agencies making plans based on two week budgets," Obama said. "What we are not going to do is once again put off something that should have been done months ago."
Besides attempts to cut spending, Republicans also have attached a social policy agenda to the must-pass spending bill. Those so-called riders to the spending measure attack Mr. Obama's health care and financial reform laws, cut taxpayer funds to Planned Parenthood and reverse a host of Mr. Obama's environmental policies, including refusal to allow the Environmental Protection Agency to regulate climate changing greenhouse gas emissions.
On a separate long-term track, Republicans controlling the House fashioned plans to slash the budget deficit by more than $5 trillion over the coming decade, combining unprecedented spending cuts with a fundamental restructuring of taxpayer-financed health care for the elderly and the poor.
House Budget Committee Chairman Paul Ryan announced the Republican budget blueprint Tuesday morning. It includes a controversial proposal to convert the traditional Medicare health care program for the aged into a system by which private insurers would operate plans approved by the federal government.
Current Medicare beneficiaries or workers age 55 and older would stay in the existing federal health care system.
At the same time, Republicans propose to cut sharply 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.
The White House was quick to dismiss the Ryan plan as unacceptable.
"We strongly disagree with this proposal," White House spokesman Jay Carney said.
Carney's comments echoed those of congressional Democrats and illustrated the deep divide over how to remedy the deficits and debt that saddle the nation's finances.