Short-term plan could avert US government shutdown

Filed under: Daily News |

The United States is less than a week away from a possible shutdown of the federal government – the first since 1996.

Although a short-term funding agreement could forestall that dramatic outcome for two weeks beyond the Friday deadline, Republicans and Democrats remain poles apart on a longer-term solution for pulling the U.S. out of its spiraling debt crisis. The U.S. debt is at a record $14.2 trillion.

While a threatened shutdown carries heavy symbolism, it’s far from effectively locking all the doors of government or turning out the lights all across Washington.

History, however, shows that the political consequences can be huge, especially if the conflict drags on beyond a few days.

Two shutdowns in 1995 and 1996, when President Bill Clinton and a new Republican majority in Congress were at loggerheads over the budget, gave the then-president critical momentum on his way to re-election. Republicans took most of the blame in that dramatic conflict and are moving carefully to avoid a shutdown this time around.

At issue are government agency operating budgets passed each year by Congress that account for about one-third of the overall federal spending and are funded through appropriations bills. When they controlled both houses of Congress last year, Democrats failed to pass a single such measure to cover the current fiscal year which runs through next September.

Republicans, using the power of their new majority status in the House of Representatives and under heavy pressure from newcomers in the caucus supported by the ultraconservative tea party movement, voted last week to cut $61 billion out of the budget for the seven months remaining in the current fiscal year.

In the Senate, where Democrats still hold the majority, that kind of dramatic reduction in government services has no chance of passage. President Barack Obama has also threatened to veto that proposal.

Senate Majority Leader Harry Reid said Democrats will try to pass a 30-day measure to keep the government spending frozen at current levels for that period.

House Speaker John Boehner said Republicans would not agree to any short-term plan that does not include spending cuts.

“We have a moral responsibility to address the problems we face,” Boehner said. “That means working together to cut spending and rein in government – not shutting it down.”

In the face of that stalemate, Boehner said the alternate plan is “a shorter-term bill that will also keep the government running while including reasonable spending cuts at the same time.”

House Republicans now plan to advance a two-week extension of government funding that cuts $4 billion in that period. That figure, however, is roughly equal to the $61 billion-pace of cuts already passed by the lower house.

But the proposal calls for some of those cuts to hit areas mentioned by Obama for reductions in his next budget as well as earmarks, or lawmakers’ special projects. Obama wants to see an end to that practice whereby legislators slip spending for projects in their districts or states into larger appropriations bills.

While details of those cuts remain fuzzy, Senate Budget Committee chairman Kent Conrad said Sunday he thought the measure could lead to a short-term solution.

“I think that’s clearly headed in the right direction,” the Democrat said on a Sunday television news show. “It is acceptable to me to have $4 billion in savings in a two-week package, sure. The makeup of that, you know, is up for discussion and negotiation. That negotiation is ongoing. And I’m confident we’ll achieve conclusion on that.”

Obama, in his weekly radio address Saturday, urged lawmakers to quickly find a resolution to the dispute “so we can accelerate, not impede, economic growth.”

Even if the showdown is pushed off for two weeks, it does not end the fight for the remainder of the year. And none of what’s under discussion on the immediate battle addresses the major fight that still looms over Obama’s $3.7 trillion budget proposal for the fiscal year beginning Oct. 1.

Obama claims his spending plan will produce $1.1 trillion in deficit savings over the coming decade, a 12 percent cut from the federal deficits the administration otherwise projects.

Missing from the president’s budget was a substantial reshaping of Social Security, Medicare and other massive, automatically paid benefit programs that bipartisan members of Obama’s deficit-reduction commission had recommended last year. That leaves no clear way out of the fiscal crisis as the aging population, prolonged lifespans and ever costlier medical procedures leave the government with enormous debt.

Most Republicans have also shied away from calling for savings from so-called entitlement programs, but that has not stopped them from criticizing Obama’s failure to do so. Rep. Paul Ryan, chairman of the House Budget Committee, has called for such reductions, but would not predict whether they would be included in the 2012 spending plan his panel plans to write this spring as a counter to Obama’s proposal.