Budget Impasse Increasing Risk of U.S. Shutdown

The New York Times (Link) - Carl Hulse (March 25, 2011)

With time running short and budget negotiations this week having reached an angry impasse, Congressional leaders are growing increasingly pessimistic about reaching a bipartisan deal that would avert a government shutdown in early April.

Senior Democratic officials involved in high-level efforts to bring House Republicans, Senate Democrats and the White House to a budget agreement said that while some progress had been made toward an accord on an overall level of spending cuts, the parties remained divided on the final figure and had to resolve the fate of ideologically charged policy provisions demanded by House conservatives.

Some senior Republicans, after relying on House Democrats to help pass the most recent short-term measure, are also uneasy about having to team up with Democrats again to pass any compromise that dips too far below the $61 billion in spending reductions endorsed by the House for the current fiscal year. Senate Democrats want to wring some of the savings out of mandatory spending programs like Medicare, an approach Republicans are resisting.

Aides said that even if myriad outstanding issues were resolved and an agreement struck late next week after lawmakers returned, it would be a challenge to write the legislation and move it through Congress before the current financing bill expires on April 8.

�A deal is still possible, but it would take a real breakthrough,� said one senior official, who like others knowledgeable about the confidential budget negotiations would discuss them only without being publicly identified.

The tension surrounding the talks and the potential for a shutdown boiled into public view Friday evening as House Republican leaders issued a series of harsh statements accusing Democrats of failing to make a serious offer on spending cuts. Representative Eric Cantor, a Virginia Republican and the House majority leader, labeled as �completely far-fetched� a claim by Charles E. Schumer of New York, the No. 3 Senate Democrat, that negotiators were making progress.

Speaker John A. Boehner joined in with a statement that accused Democrats of lacking a fiscal plan. �If Democrats don�t have a plan, do they intend to shut down the government because they can�t agree among themselves?� he asked.

Democrats fired back, suggesting that Republicans were backtracking under pressure from House conservatives allied with the Tea Party who were opposed to any compromise with Democrats in the budget debate.

�After days of positive negotiations, with significant flexibility shown by the speaker, the House Republican leadership is back to agonizing over whether to give in to right-wing demands that they abandon any compromise on their extreme cuts,� Mr. Schumer said. �Instead of lashing out at Democrats in a knee-jerk way, we hope House Republicans will finally stand up to the Tea Party and resume the negotiations that had seemed so full of promise.�

Congressional officials said the budget talks were set back significantly in a meeting Tuesday when the participants feuded over what legislation should serve as the benchmark for the talks � the House-passed spending measure with $61 billion in cuts for this year or an interim budget bill approved by Congress in early March that maintained financing for most programs at their current levels.

Democrats, who believed they had an agreement to work off the stopgap plan, felt blindsided, officials said. Jacob J. Lew, the White House budget director and chief Democratic negotiator, angrily resisted the Republican push to use the House measure as the starting point. The meeting abruptly broke up, with talks resuming haltingly since then.

Ken Baer, a spokesman for Mr. Lew, said he would not �discuss details of meetings that were agreed by all to be confidential. But there are ongoing discussions at many levels.� He did say that Vice President Joseph R. Biden Jr. had consulted Thursday with both Mr. Boehner and Senator Harry Reid, the majority leader.

The heated meeting on Tuesday was the first with participation by representatives of the House Appropriations Committee, which drafted the House plan and saw that bill as providing the most legitimate framework for the budget talks. But Democrats argue that using the House measure, which the president has promised to veto, puts them at a disadvantage.

Failure to reach agreement without another stopgap measure could cause a number of federal operations to be halted after April 8. Both Senate and House officials said they believed it would be difficult to advance another short-term budget bill after numerous lawmakers said the temporary measure now in place would be the last one they would support before considering a plan to finance the government through Sept. 30.

The fight over spending levels for the current fiscal year � through Sept. 30 � will be followed by two others that could be even more contentious. Congress will be asked this spring to increase the federal debt limit, a measure that many conservatives say they will oppose unless President Obama is willing to accede to a package of deep spending cuts. The two parties will also be at odds over a budget for next year, with House Republicans intending to introduce into that fight proposals to rein in the long-term costs of entitlement programs like Medicare and Medicaid.

The budget showdown between Democrats and the new House Republican majority is caught up in strong political currents since House conservatives are pushing for steep spending cuts in the current fiscal year and pressing the leadership to not give much ground.

But negotiations had been continuing among representatives of the White House, Mr. Boehner and Mr. Reid, with Democrats proposing spending reductions that they said would total more than $20 billion, while Republicans expressed a willingness to give some ground on their $61 billion figure.

�We�re getting closer on the number,� Mr. Schumer said in an interview on MSNBC Friday morning.

Officials said an agreement on spending reductions in the vicinity of $30 billion to $40 billion had seemed possible before Tuesday�s abbreviated negotiating session, but lawmakers and their aides seemed uncertain Friday about where the talks would head, given the tough partisan statements and persistent disputes over the makeup of any budget deal.

In another development that could influence the debate, Tea Party groups are planning to rally outside the Capitol on Thursday to encourage Republicans to hold firm on their budget cuts. �