GOP wins 1st budget skirmish; bigger fight looms

[March 03, 2011]  WASHINGTON (AP) -- Republicans won an early round Wednesday in their fight to shrink the government, pushing $4 billion in spending cuts through Congress in a bill that puts off the possibility of a government shutdown for two weeks.

Largely a spectator so far, President Barack Obama dispatched his vice president to initiate negotiations on a broader, longer-term spending bill and find "common ground" with GOP leaders determined to cut tens of billions of dollars more and undo much of his agenda.

He conceded in advance that any deal on a government budget covering the next seven months will feature cuts, not just the long-term freeze he proposed last month.

The Senate cleared the temporary spending measure by an overwhelming 91-9 vote after the House passed it with a large bipartisan vote Tuesday. Obama signed it Wednesday afternoon.

After initially being rejected last week by Senate Majority Leader Harry Reid, D-Nev., the two-week cuts written by House Republicans shot through the Senate with minimal opposition on the right and left.

The upcoming talks, to be led by Vice President Joe Biden, promise to be far more difficult. Those talks could begin as early as Thursday.

"This agreement should cut spending and reduce deficits without damaging economic growth or gutting investments in education, research and development that will create jobs and secure our future," Obama said. "It should be free of any party's social or political agenda, and it should be reached without delay."

Republicans who outmaneuvered Senate Democrats and the White House in orchestrating passage of the two-week measure called on Democrats to offer a longer-term solution of their own in response to a $1.2 trillion GOP spending measure that passed the House last month.

"It's hard to believe when we're spending $1.6 trillion more than we're taking in a single year, that it would take this long to cut a penny in spending, but it's progress nonetheless," said Senate GOP leader Mitch McConnell of Kentucky. "It's encouraging that the White House and congressional Democrats now agree that the status quo won't work, that the bills we pass must include spending reductions."

The insertion of Biden into the talks -- he played a lead role in bipartisan efforts in December to extend Bush-era tax cuts and ratify a nuclear arms treaty with Russia -- was seen as evidence that the White House wants to regain the initiative. White House chief of staff William Daley and budget director Jacob Lew, who will also participate, held an early evening meeting Wednesday in the Capitol with House Democratic leaders.

House Republicans last month muscled through a bill that could cut spending over the next seven months by more than $60 billion from last year's levels -- and $100 billion from Obama's request. It would also block implementation of Obama's health care law and a host of environmental regulations. The White House has promised a veto and it could take weeks or months to negotiate a compromise funding measure that Obama would sign.

"The House position is perfectly clear. We cut $100 billion off the president's request for this fiscal year," said House Speaker John Boehner, R-Ohio. "We have no clue where our colleagues on the Senate side are."

The earlier House measure blended dramatic cuts from almost every domestic agency. It also would block taxpayer money from going to public broadcasting and Planned Parenthood family planning efforts. Money for food inspection, college aid, grants to local schools and police and fire departments, clean water projects, job training and housing subsidies would be reduced.

"The level of cuts some of my House colleagues propose would cut the federal government's nose off to spite its face," said Sen. Mark Udall, D-Colo.

Federal Reserve Chairman Ben Bernanke weighed in Wednesday, telling a committee the House GOP's spending cuts plan would reduce economic growth by as much as two-tenths of a percentage point and hurt job growth.

"That would translate into a couple hundred thousand jobs," Bernanke said. "It is not trivial."

The $4 billion in immediate savings produced Wednesday comes from some of the easiest spending cuts Congress can make. It hits accounts that Obama has proposed eliminating and reaps some of the savings brought about by Republicans' earlier moves to prohibit lawmakers from "earmarking" pet projects for their districts and states.

"While some have been patting themselves on the back for proposing $4 billion in so-called `cuts,' in reality this bill fully funds billions upon billions of dollars in wasteful, duplicative programs that should be eliminated, reduced or reformed," said freshman Sen. Mike Lee, R-Utah, who defeated a GOP incumbent last year with tea party backing.

At issue are the operating budgets of every federal agency, including the Pentagon, where Defense Secretary Robert Gates is increasingly anxious for a full-year funding bill with budget increases. The so-called discretionary spending represents about a third of the overall $3.8 trillion federal budget, and government agencies have been operating at last year's funding level for five months since the start of the budget year in October.

Gates pressed House lawmakers for a Pentagon spending bill, warning them that without a budget increase "there's no funds for the pay raise, for any increase in fuel prices, no money to pay for increases in health care costs. It has a severe impact." He said contracts could become more expensive and efforts to build Virginia-class attack submarines could be compromised.

Across Capitol Hill, the head of the Environmental Protection Agency warned a Senate panel of severe consequences if EPA enforcement efforts are slashed.

"If Congress ever gutted that funding, then EPA would be unable to implement or enforce the laws that protect Americans' health, livelihoods and pastimes," EPA administrator Lisa Jackson said. "Big polluters would flout legal restrictions on dumping contaminants into the air, into rivers and onto the ground."

[Associated Press; By ANDREW TAYLOR]

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