Shutdown Deadline Nears After Obama's Budget Meeting

Obama met with House Republicans and Senate Democrats at the White House.

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Although there are signs that a compromise deal might be in the works, the negotiations to prevent a government shutdown remain rocky and contentious. With only four days remaining until federal funding runs out, there is still plenty of disagreements between the parties about what, where, and how to cut from the federal budget.

Last Wednesday, word spread that negotiators representing House Republicans, Senate Democrats, and the White House had broken through an impasse over the number and nature of cuts. According to a Democratic source close to the negotiations, both sides were nearing a final figure of how much to cut, with Republicans warming to an offer to cut $33 billion from current spending levels—$23 billion on top of $10 billion in cuts that Congress has already passed. But there was also a new understanding of what type of cuts to include in a compromise, with Republicans backing off their previous demand to reach that figure only through cuts to annual nonsecurity discretionary spending, which includes most government departments and social services. Democrats hoped to find some of the savings with reforms in mandatory entitlement spending, which could include Social Security, Medicare, or Medicaid, as well as other government-funded entities such as Fannie Mae and Freddie Mac. Many conservative Republicans have stated that they want to deal with entitlement reform in the upcoming debate over the federal debt limit, rather than in a budget debate. [See a slide show of 10 budget and spending fights looming for Obama and the GOP.]

Publicly, Republicans have denied that they reached any agreement with Democrats, even over a level of spending cuts. And, in a meeting with Democrats this morning, Republicans offered yet another temporary stop-gap measure, which would cut $12 billion from federal spending but prevent a shutdown for another week, and would also ensure full funding for military until the end of the fiscal year. That deal appears to be a non-starter, with Democrats and President Obama blasting the proposal and claiming it is time to pass a permanent measure. During a press conference on Tuesday, Obama said that the two sides were closer than ever to a budget compromise. "Myself, Joe Biden, my team, we are prepared to meet for as long as possible to get this resolved," Obama said.

Before Friday, both sides hope to agree on a final package of cuts to finish out the fiscal year, and they want enough time to sell them to their respective restless caucuses. Aside from the controversial cuts, the parties will have to agree on how to deal with so-called policy riders, or funding restrictions that aim to tie the president's hands. The Republican-sponsored spending bill, which passed in the House last month, included provisions to bar enforcement of healthcare and financial reform laws, prevent funding for so-called czar positions in the administration, and cut off federal money for Planned Parenthood. The riders have been politically controversial, although there are signs that the Democrats may be softening their opposition. Although Senate Majority Leader Harry Reid had previously said they had "no business" in a budget bill, he conceded that members were "already looking at some of the riders." He added, "There aren't many that excite me." 

The breakthrough comes after a week of stalled talks and partisan fighting, with Democrats accusing the GOP of being led by its most right-wing members, and Republicans accusing Democrats of not being serious about cutting spending and secretly rooting for a shutdown. [See 10 effects of a government shutdown.]

Even if the two sides are able to reach agreement and avert a shutdown, there are still other contentious budget fights on the horizon. House Budget Committee Chairman Paul Ryan released his budget proposal for 2012 on Tuesday, including reforms to Medicare and Medicaid which have already proven controversial to Democrats. And a battle over raising the federal debt ceiling could also begin soon. Although this week's breakthrough shows that compromise is possible, it will not signal lasting budget peace in Washington.