Tough Choices, Clock Ticking in Budget Fight

Monday, 04 Apr 2011 06:40 PM

 

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WASHINGTON — U.S. Democrats and Republicans faced tough choices Monday as they raced to complete a record spending-cut package that would keep the federal government operating beyond a Friday deadline.

Congressional staffers over the weekend sorted out how much to cut from broad areas such as agriculture and defense as the two sides tried to finalize a deal that would tentatively cut $33 billion from current levels, aides said.

But difficult choices remain if Congress is to avert a government shutdown that could throw hundreds of thousands of people out of work, rippling through an economy that is still recovering from the deepest recession since the 1930s.

A deal on spending for the rest of the current fiscal year probably will have to be in place by Tuesday evening in order to give the House and the Senate enough time to pass it into law by midnight Friday, when a temporary funding measure expires. The fiscal year ends Sept. 30.

Republicans are resisting more than $2 billion in cuts that Democrats have proposed to defense and national security, according to a Democratic aide. They also remain skeptical of about $6 billion to $8 billion in Democratic cuts to education, healthcare and other programs that usually lie beyond the reach of the yearly budget cycle, several aides said.

Democrats are rejecting Republican efforts to choke off funding for President Barack Obama's signature healthcare overhaul law, environmental protection and other White House priorities.

The size of the package could change as Republicans could demand deeper cuts in exchange for dropping these funding limitations.

 

"There is no 'deal,"' said Michael Steel, a spokesman for House Speaker John Boehner. "Nothing, including a figure for spending cuts, has been agreed to, or will be, until everything is agreed to."

The battle over spending has consumed Washington for months, as Republicans try to fulfill a campaign promise to scale back the size of government and Democrats warn that the economy could be hurt if the cuts are too deep and too sudden.

Other budget battles could dwarf this fight. Though a cut of $33 billion would be the largest domestic spending reduction in U.S. history, it would have little effect on a budget deficit projected to hit $1.4 trillion this year.

The battle has also been largely confined to the annual domestic spending that makes up only 13 percent of the budget.

House Republicans are expected to outline Tuesday much more ambitious proposed cuts for the next fiscal year. House Budget Committee Chairman Paul Ryan's blueprint for the fiscal year that begins on Oct. 1 would transform government health insurance programs like Medicare and Medicaid, impose overall spending caps and cut corporate and individual taxes.

Congress also will confront a tough vote in coming weeks over raising the government's borrowing authority, currently at $14.3 trillion. Republicans hope to wring further spending concessions in return for a vote to raise the debt ceiling.

© 2014 Thomson/Reuters. All rights reserved.

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