Obama Presses for Budget

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The Wall Street Journal
By: Naftali Bendavid, Janet Hook & Carol E. Lee
April 7, 2011

Issues 'Narrowed'; Parties Asked to Work Through Night as Shutdown Looms.

President Barack Obama emerged from a late-night meeting Wednesday with House Speaker John Boehner and Senate Majority Leader Harry Reid saying the two parties had moved closer to a spending agreement to avoid a government shutdown Friday, but no deal had been struck.

What [the talks] did was narrow the issues and clarify the issues that are still outstanding," Mr. Obama said. He was confident a deal could be reached to fund the government for the rest of the fiscal year, he said, but "it's going to require a sufficient sense of urgency from all parties involved."

Staffers from the White House and the offices of Messrs. Boehner and Reid were set to work through night, and Mr. Obama said he would check in with them Thursday morning--a day and a half before the deadline--and summon the parties back to the White House if necessary.

"We're going to keep pounding away at this thing," Mr. Obama said.

Messrs. Reid and Boehner appeared together on the White House driveway after the session, itself an unusual occurrence. Mr. Boehner said the meeting was "productive," but added, "We do have honest differences."

Mr. Reid was more positive, issuing a statement saying, "I am hopeful that we will be able to announce a compromise agreement soon."

The talks to avert a government shutdown have lurched this week between optimism and pessimism. Just hours before Mr. Obama's dramatic late-night appearance, the two sides had been struggling to keep negotiations on track. Throughout the day, lawmakers had been more upbeat than earlier in the week, but stubborn issues remained--how to allocate $33 billion to $40 billion in cuts, and whether to include policy provisions demanded by Republicans.

Without an agreement, the government would shut down at midnight Friday.

The talks have yet to tackle some of the most sensitive policy disputes and could still break down. Federal officials continued to prepare for a shutdown and warned that such an outcome could hurt the economic recovery.

About 800,000 federal employees could be furloughed if the government closes, and services across the executive branch would stall. Even government employees who continue to work wouldn't receive paychecks until Congress funds the government again. That means a total of two million workers wouldn't be paid. Activities considered essential would continue, including the mailing of Medicare and Social Security checks.

In case a deal isn't reached, House Republicans were preparing to vote Thursday on a bill that would extend most government funding for an additional week while cutting $12 billion. Democrats have rejected this proposal.

At a private meeting of House Republicans Wednesday afternoon, Mr. Boehner's message was that "the meetings between him and Reid have moved in a positive direction," said Rep. Shelley Moore Capito (R., W.Va.). "He's optimistic we'll be able to avert a shutdown."

Mr. Obama called Messrs. Reid and Boehner before setting off for a trip to Pennsylvania and concluded there was "not an agreement, but progress," said White House spokesman Jay Carney.

Mr. Obama has remained aloof from the talks until recently, and Wednesday he sought to portray the White House as a parent watching squabbling siblings. "You want everybody to act like adults, quit playing games, realize it's not just 'My way or the highway," Mr. Obama said.

It wasn't clear whether GOP conservatives would accept a deal If Messrs. Boehner and Reid reach one. After the meeting of House Republicans, Rep. Mike Rogers (R., Ala.) said that they would. "Almost everybody in that room will be with the speaker on whatever deal he cuts," Mr. Rogers said.

Mr. Boehner and other top Republicans have suggested that if the cuts reach $40 billion, they would be able to persuade their party colleagues to go along. Democrats say that amounts to Republicans reneging on an implicit agreement to set a $33 billion target.

"Every time we agree to meet in the middle, they move where the middle is," Mr. Reid said.

Democrats pushed for more Pentagon cuts. They also wanted more trims from "mandatory" programs, for which spending is set by a pre-existing law or formula for things like crime-victims' assistance. That would reduce pressure for cuts in other areas they value, such as environmental protection. Republicans view cuts to mandatory programs as gimmicks because they are one-time trims that don't reduce future spending.

Negotiators must also still tackle the incendiary issue of "riders," policy provisions Republicans want to add to the spending bill. Among these are measures that would eliminate funding for Mr. Obama's health-care law, block climate-change regulations and prevent funding for Planned Parenthood Federation of America.

Some lawmakers were weary of the battle and eager to move on to other, potentially more explosive debates, including the 2012 budget and raising the debt ceiling.

Members of Congress were also aware that voters could spread the blame around if the government closes. A new Wall Street Journal/ NBC News poll suggests Americans are divided over who they would fault for a shutdown, with 37% blaming congressional Republicans, 20% blaming Democrats and 20% blaming Mr. Obama.

--Danny Yadron, Siobhan Hughes and Jonathan Weisman contributed to this article.
Write to Naftali Bendavid at naftali.bendavid@wsj.com

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This page contains a single entry by CFED published on April 7, 2011 3:33 PM.

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