Deal needed to avoid spending train wreck

[April 04, 2011]  WASHINGTON (AP) -- Political ideologies and government spending realities are speeding trains headed toward a nasty crash in Washington this week barring a compromise between Republicans in the House and Senate Democrats aligned with President Barack Obama in the battle to contain America's soaring debt.

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

At issue are cuts to so-called discretionary programs, the cost of running various government agencies that use only 12 percent of the federal budget.

Republicans took control of the House in a landslide last November with much of their success built around tea-party-aligned candidates elected on the promise of lower taxes, less spending and smaller government. Nearly six weeks ago, the House passed a bill calling for $61 billion in cuts in discretionary spending for the remainder of the year.

The Senate, which also must approve such a measure, never took it up.

Instead both houses of Congress have passed two short-term spending laws to keep government open while cutting $10 billion out of this year's budget. That appropriation runs out Friday. Late last week, Obama said that compromise was close with Republicans on $33 billion in cuts, and he warned that without a deal the ensuing government shutdown would "jeopardize our economic recovery" just as jobs are finally being created.

There are indications the $33 billion figure may truly be in play, with sufficient votes lined up among mainstream House Republicans and Democrats. But House Speaker John Boehner is denying a deal is in the works, apparently fearing he would alienate the Republican tea party conference and damage party solidarity in advance of the coming 2012 presidential election. Many of the 87 new Republican House members say they will not go for a compromise.

What's more, the huge political divisions may only harden on Tuesday when Republicans reveal their plans to further slash government outlays for the next fiscal year, a spending outline that was expected to call for profound changes in funding for U.S. social safety net programs, particularly government-funded health care for the elderly and the poor.

Those programs, known as Medicare and Medicaid, along with Social Security pension benefits and defense spending consume the vast majority of government spending. None of them is under consideration in the current battle over cuts for the remainder of this fiscal year, even though a special Obama commission on the debt has recommended dramatic changes in all that spending and in the American tax laws.

Obama has said little about the commission recommendations and sought to remain publicly above the fray, instead focusing his message on repairing the recession-ravaged economy and reducing unemployment.

He weighed in, however, after good news on the jobs front last Friday.

"Given the encouraging news we received today on jobs, it would be the height of irresponsibility to halt our economic momentum because of the same old Washington politics," he said.

"It can't be `my way or the highway politics,'" said the president. "We know that a compromise is within reach. And we also know that if these budget negotiations break down, it could shut down the government and jeopardize our economic recovery."

Shortly before Obama spoke, Senate Majority Leader Harry Reid shifted the Democrats' position on one key element of the talks, in apparent deference to environmentalists angered by an earlier concession.

House Republicans included provisions in their $61 billion package of spending cuts that would block the Environmental Protection Agency from implementing regulations on a variety of industries that would cut emissions of climate changing greenhouse gases.

"Neither the White House or the Senate leaders is going to accept any EPA riders," he said in a conference call with reporters.

The spending conflict also is playing out under the shadow of the upcoming requirement for Congress to vote on increasing the amount of money the government can borrow. Democrats cannot increase the debt ceiling without Republican support in both the Senate and House. The Treasury Department estimates the government will hit the $14.3 trillion debt ceiling sometime between April 15 and May 31. The administration has warned Congress that failing to raise the debt limit would lead to an unprecedented default on the national debt.

This pivotal week will test congressional abilities to compromise on a plan that moves some distance toward reducing deficit spending. Republicans warn the practice is leading toward the decline of American power and influence, and Democrats argue that cuts cannot be too Draconian in the face of a weak economic recovery and the needs of middle- and lower-income Americans.

[Associated Press; By STEVEN R. HURST]

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