After Break, Still No Deal on Spending

Posted March 25, 2011 at 5:31pm

Lawmakers return to Washington this week with the threat of a government shutdown revived because staff-level talks on a long-term spending bill have made little headway.

Democratic and Republican leaders are hoping discussions between staff from the White House and the offices of Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) — which continued throughout the weeklong recess — will lead to a deal that averts a government shutdown when the current spending bill expires April 8.

According to aides, those talks have involved the spending reductions to be included in the final six-month bill, as well as the politically thorny issue of policy riders. Conservatives in the House have demanded a host of riders, ranging from abortion limits to the zeroing out of President Barack Obama’s health care law.

On Friday, Senate Democratic Conference Vice Chairman Charles Schumer (N.Y.) said he believes the talks have been fruitful.

“We are making progress on the budget right now,” Schumer said during an interview on MSNBC. “The good news is there’s been progress made on the number. We’ve moved up … they’re moving down.”

Schumer said that there is still a dispute over what will be cut, and he suggested there could be cuts from mandatory spending programs, such as payments to drug companies, other Medicare and Medicaid suppliers, and agriculture subsidies, instead of limiting the cuts to the 12 percent of the budget represented by domestic discretionary accounts.

Democratic aides said progress had been made between the Boehner and Reid camps, but things hit a snag Wednesday when House appropriators insisted on using H.R. 1, the original long-term CR, as the starting point for negotiations instead of the cuts in the already passed CRs.

And on Friday, White House Press Secretary Jay Carney dismissed GOP complaints, sticking to the administration’s weeks-old position that Obama has met Republicans “halfway” on the spending dispute.

“We’ve come more than halfway toward the Republicans. And negotiations are ongoing at many levels,” Carney said.

Republicans, however, have downplayed the success of the talks so far.

In a statement, House Majority Leader Eric Cantor (Va.) argued Schumer’s claims of progress “are completely farfetched.

“Leader Reid, Senator Schumer and the White House continue to abandon their responsibility to get our fiscal house in order by negotiating off of the status quo and refusing to offer any sort of serious plan for how to cut spending.”

In an interview with Fox Business News late last week, Cantor said things looked bleak: “So right now, we’re saying look, if they want to shut the government down because they have got to protect every last dollar and cent of federal spending, then that will be on their hands.”

Democratic and Republican aides also downplayed the amount of movement the talks had made so far.

In particular, Republican aides disputed Schumer’s suggestion that they were getting close on an overall level of cuts, and Democrats and Republicans alike said it would take several more days at least before a deal is in place — if a deal can be made at all.

And even if party leaders strike a deal, it’s not immediately clear whether they can get the rank-and-file to go along.

Boehner faces pressure from tea party activists to hang firm on demands for a full $61 billion in midyear budget cuts as well as on a host of riders that would defund Planned Parenthood, the health care law and other hot-button issues — any one of which could provoke an impasse and, indirectly, a shutdown.

Schumer called it “a good sign” that Republicans did not insist on policy riders for the short-term CRs but acknowledged that resolving the policy elements is “still a little bit of trouble down the road.”

Democratic and Republican leaders have also both expressed distaste for the potential for another short-term spending bill, raising the pressure to get a deal now.

And after $10 billion in cuts from last year’s spending already enacted, there is less low-hanging fruit to pluck that would satisfy Republican demands for cuts Democrats would accept.

One wild card, however, is the Defense budget. Senate Minority Leader Mitch McConnell suggested before the break that he could accept another short-term CR, but only if the full Defense Department budget for the rest of the fiscal year was attached.

“I can say with total confidence that we’re not — the House and Senate are not going to be passing another continuing resolution without the funding for the Defense Department for the remainder of this fiscal year,” the Kentucky Republican said before the break.

Senate Armed Services Chairman Carl Levin (D-Mich.) said last week that he personally supports moving forward with the Defense budget regardless of whether there is an overall deal, although he said he’s not sure what Democratic leaders will do.

Democrats have so far resisted moving forward with Defense separately. Such a move could diminish their leverage in a final showdown because they could no longer claim a shutdown might keep soldiers from getting paid or getting the supplies they need on the battlefield.

But proceeding with a full Defense bill in a short CR could buy some time, at least in the Senate. House Republican leaders, however, are facing a surge of opposition to any more short-term spending measures from within their caucus, conservative pundits and tea party activists. Some 54 Republicans voted against the most recent CR negotiated by GOP leaders, after several prominent conservative groups and Republican Study Committee Chairman Jim Jordan (Ohio) came out strongly against it despite its $6 billion in cuts, while others said they would back the latest bill but insisted they would not support any more short-term CRs.