Congress Shifts Focus to Preventing Government Shutdown

Sequestration cuts begin tonight, and another budget battle already looms.

President Barack Obama and House Speaker John Boehner speak to reporters following a meeting at the White House, March 1, 2013.
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Sequestration will be sign, sealed, and delivered before the stroke of midnight Friday, turning the budget saga to a new deadline March 27—when a stopgap funding measure expires and the government runs out of money to function.

President Barack Obama met with congressional leaders Friday morning for about an hour to discuss the country's budgeting woes, but the meeting looked like it was more of a photo op than a deal striking summit. House Speaker John Boehner emerged first from the meeting looking agitated, and doubling down on his promise to his Republican caucus that new revenues would not be a part of any deal he struck with the president to replace the $85 billion in across-the-board cuts.

"The discussion about revenue, in my view is over. It's about taking on the spending problem," Boehner said during a short press conference after the White House meeting.

[RELATED: Ten Industries That Will Be Hurt by Cuts]

But while a grand bargain with new revenues and dramatic reforms to entitlement programs appears a distant dream, Obama says he remains optimistic that the Republicans will cool off and come back to the negotiating table to eventually replace the sequester with a "balanced approach."

"I recognize that Speaker Boehner has challenges within his caucus. It is very hard for Republican leaders to be perceived making concessions to me," Obama told reporters following his meeting with congressional leaders. "Is there something else I can do to make these guys... not paint horns on my head?"

Now the focus will turn to passing a new continuing resolution to keep the government away from a shutdown.

[VIDEO: Sequestration Cuts Get a Very Bad Rap]

Boehner and House Republicans will return to Capitol Hill next week and are expected to vote immediately on a continuing resolution that would fund the government at $974 billion. To give the Department of Defense more flexibility in how it handles the sequester, Republicans plan to attach a defense appropriations bill to the proposal. The GOP caucus appears united behind the plan.

"We want to get ahead of it. There is no thought of closing down the government," said Rep. Buck McKeon, chairman of the House Armed Services Committee. "We have enough problems around here without that."

The president even signaled he might be open to considering funding the government at that level, which is lower than the current level $1.043 trillion, because of sequestration.

[ENJOY: Political Cartoons About Military Spending]

"It is the right thing to do to make sure that we don't have a government shutdown," Obama said. "It is fair to say I made a deal for a certain budget, certain numbers, [and] there is no reason why that deal needs to be reopened. "

But Obama says he is not giving up on replacing the sequester eventually.

"I would like to think I still have some persuasive power left. The American people agree with my approach. The question is can the American people help persuade their members of Congress to do the right thing," Obama said.

Some Democrats have hinted that they would like to see the flexibility the GOP gave to the Defense Department be extended to other domestic agencies.

[FLASHBACK: Sequestration Impasse Happened in the 1980s]

"We might see the Republican plan as an opening move, but it won't be the final solution," says former White House budget adviser Alice Rivlin. "I hope they get back to the grand bargain."

Rivlin says once Americans start to feel the pinch of sequester, Congress may have even more pressure to act on a deal that would once and for all solve the country's fiscal limbo.

"People are getting to the point where they think this has to have resolution. We cannot just ratchet from one crisis to the next," Rivlin says. "Annoyance with the sequester is accumulating and a government shutdown is something no one wants to see."

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