Current funding for the federal government will run out in less than two weeks. Yet the two parties are nowhere near a consensus on how to keep it funded for the rest of the year and beyond. Last week, President Obama released his budget for fiscal year 2012, and Republicans blasted it for being too timid and for failing to take up entitlement reform. The complex and constantly changing situation has left political observers and congressional insiders unsure how this will all turn out. "This is as complex a fiscal knot as we've seen in quite some time," says Bill Galston, a former domestic policy adviser for President Clinton and current governance expert with the Brookings Institution.
Adding to the stress is the timetable. Early Saturday morning, the Republican-controlled House passed a funding bill, or continuing resolution, which would keep the government open for the remainder of fiscal year 2011, which runs through the end of September. The House bill would immediately cut about $60 billion from the government's nondefense, discretionary budget. Congress is in recess this week, so the Democrat-controlled Senate will only have a few days to negotiate a compromise version of the funding bill. With so little time to work out a huge compromise, lawmakers will likely try to pass a smaller stop-gap measure which will keep the government running while negotiations continue.
But House Speaker John Boehner threw cold water on that idea last Friday. "I am not going to move any kind of short-term [continuing resolution] at current levels," he said. His hard line may be an attempt to keep the often rebellious Republican caucus in line, including new members who were supported by the Tea Party and were elected on platforms of slashing government spending. "They're asking, 'How can I look my constituents in the eye and say that I voted to keep spending at this bloated level?'" says one Republican House aide.
Already, both parties are positioning the other to take the blame if a shutdown happens. "I am disappointed that Speaker Boehner doesn't believe he has the votes to avoid a government shutdown unless his members get their way on all of their demands," Senate Majority Leader Harry Reid said in a statement. Republicans say it's Democrats who are being unreasonable. "You know, any time that we propose a spending cut, it seems that [Democratic Sens.] Chuck Schumer, Dick Durbin, Harry Reid, and others scream, 'shutdown,'" House Majority Leader Eric Cantor said on last week.
The skirmishes over the president's 2012 budget have already begun, as well. Obama's budget makes some long-term cuts and revenue increases, but critics blasted it. Republicans, slamming the president for a "failure to lead," have said that they'll deal with entitlements such as Social Security and Medicare when they unveil their 2012 budget in the spring. And a bipartisan group of senators has been working on legislation based on the recommendations from the president's deficit commission. Such a package could be the basis of a compromise, but they are months away from a firm proposal. [See photos of the Obamas behind the scenes.]
Still, lawmakers have been known to defy the odds, as they did with the tax deal passed last year. But this could be the trickiest pickle yet for Obama and the GOP to work their way through.