White House talks fail to produce budget deal; House passes stopgap bill

April 7, 2011

A Thursday-night meeting between congressional leaders and President Obama failed to resolve an impasse over federal spending that, barring an agreement on Friday, would result in a government shutdown.

After the session, which lasted nearly 90 minutes, Obama said in brief remarks to reporters that differences between the two parties remained, adding, “I’m not yet prepared to express wild optimism.”

He did not detail the remaining disagreements between Democrats and the White House and congressional Republicans, which have prompted days of tense negotiations over a bill to fund the federal government.

House Speaker John A. Boehner (R-Ohio) and Senate Majority Leader Harry M. Reid (D-Nev.) issued a joint statement that simply said, “We have narrowed the issues, however we have not yet reached an agreement.”

“We will continue to work through the night to attempt to resolve our remaining differences,” the statement read. Obama, too, said differences were “narrowed” in the night meeting.

Obama said that because the government was preparing for a shutdown, an agreement needed to be reached early Friday.

“I expect an answer in the morning and my hope is that I’ll be able to announce to the American people relatively early in the day that a shutdown has been averted,” Obama said.

After the meeting, the White House canceled Obama’s scheduled trip Friday to Indianapolis to discuss hybrid-transporation technology.

The leaders gathered hours after the House of Representatives defied a White House veto threat and approved a one-week stopgap spending bill. Republicans said the bill would head off the shutdown this weekend, but Democratic opponents said contains unacceptable cuts and policy provisions.

The House passed the temporary funding bill by a vote of 247 to 181. Before the vote, the White House warned that Obama would veto the measure if it reached his desk — an event considered unlikely given strong opposition in the Democratic-controlled Senate.

After an earlier White House meeting Thursday, Boehner told reporters: “There is no agreement on a number, there is no agreement on the policy.” He added, “We are not there yet.”

Reid, standing beside Boehner, said he was “disappointed” that a deal has not been struck so far, “but I am pleased that we are still working on getting there.” He warned that a government shutdown “of no matter how long” would cause economic damage, including a drop in U.S. gross domestic product. “It’s not easy to do, but it’s doable,” he said of efforts to reach an agreement.

Neither man would detail Thursday afternoon exactly what the disagreements were. Asked whether the impasse was over policy provisions or the amount of cuts, Reid said simply that “everything is in play.”

Boehner said Obama told him during the session that he would veto the temporary funding measure. “I did express my disappointment that he suggested he would veto that bill,” Boehner said.

White House officials would not immediately comment on the meeting or the progress of negotiations after it ended.

Upon returning to the Capitol, Reid told reporters he needed to speak with the Democratic caucus. He acknowledged that Democrats still believe most of the policy riders Republicans have sought would end up jettisoned from the final deal, if there is a deal. He declined to specify which measures Obama and Democrats would relent on.

“We’ll get most of them” removed, he said.

Earlier, after congressional negotiators working through the night failed to reach an agreement to fund the federal government for the remainder of the year, the Obama administration formally rejected the Republican plan for a stopgap measure that includes policy provisions opposed by Democrats.

To give negotiators more time to work out an agreement that would avert a federal government shutdown beginning Saturday, Boehner urged the White House and congressional Democrats to accept a stopgap spending bill that would fund the Defense Department for the remainder of the fiscal year and the rest of the government for one week. But Democrats remained resolutely opposed, saying the measure would require $12 billion in cuts and includes a provision to ban federal and local government funding for abortions in the District of Columbia. Congress already has enacted two stopgap measures to allow extensions of the budget negotiations.

In a formal “statement of administration policy,” the Office of Management and Budget said Thursday afternoon that the Obama administration “strongly opposes” the stopgap bill. “As the president stated on April 5, 2011, if negotiations are making significant progress, the administration would support a short-term, clean continuing resolution to allow for enactment of a final bill,” it said.

“After giving the Congress more time by signing short-term extensions into law, the president believes that we need to put politics aside and work out our differences for a bill that covers the rest of the fiscal year,” the statement said. “This bill is a distraction from the real work that would bring us closer to a reasonable compromise for funding the remainder of fiscal year 2011 and avert a disruptive federal government shutdown that would put the nation’s economic recovery in jeopardy.” It said the stopgap measure “simply delays that critical final outcome.”

The statement concluded: “If presented with this bill, the president will veto it.”

Reid said Thursday morning that the talks on a fiscal 2011 budget deal foundered over two Republican policy provisions on abortion and the environment and that the negotiators largely agreed to an amount of spending cuts. But Boehner disputed that, saying there was “no agreement on a number” and that the disagreements were not limited to a couple of policy provisions known as “riders.”

In a speech on the Senate floor, Reid expressed pessimism that a shutdown could be avoided.

“The numbers are basically there, but I am not nearly as optimistic — and that’s an understatement — as I was 11 hours ago,” Reid said. “The numbers are extremely close, and our differences are no longer over how much savings we get on government spending. The only thing holding up an agreement is ideology. I’m sorry to say that my friend, the speaker, and the Republican leadership have drawn a line in the sand not dealing with the deficit we know we have to deal with, not with the numbers that fund the government for the rest of this fiscal year. The issue is ideology, not numbers.”

Boehner took the House floor after 11 a.m. to reject the idea that an agreement was close.

“Talks to resolve last year’s budget are progressing, but there is no agreement yet. No agreement on numbers,” Boehner said. Instead, he urged the Senate to accept the stopgap measure.

“I think we all know that no one wants a shutdown,” Boehner said.

Reid said his staff worked through the night with negotiators for Boehner and the administration following a nearly two-hour meeting at the White House Wednesday night. He said the talks are at an impasse over restrictions on abortion funding and changes to environmental regulations, which House Republicans want to be part of any budget deal.

“It’s not realistic to shut down the government on a debate dealing with abortion,” Reid said. “It’s not fair to the American people. We haven’t solved the issue in 40 years. We’re not going to solve it in the next 38 hours. We should not be distracted by ideology. This is a bill that funds the government.”

Reid added: “If this government shuts down, and it looks like it’s heading in that direction, it’s going to be based on my friends in the House of Representatives focusing on ideological matters that have nothing to do with funding this government. That’s a sad day, I think.”

Speaking to reporters later, Boehner said, “There’s far more than one provision that’s holding up any agreement.” He also insisted that Republicans are not proposing “any deal-breaker” and that “all of these policy issues are continuing to be on the table.” He said, “Our goal here is to cut spending, not to shut down the government.”

Boehner also said, “We made some progress last night. Or at least I thought we did.” In response to questions, he added: “There is no agreement on a number. In fact, I think we were closer to a number last night than we are this morning.” He said there are still “a number of issues on the table” and that attributing the stalemate to one or two matters “just would not be accurate.”

Democrats nevertheless maintained that policy riders demanded by a small group of tea party activists were blocking a deal.

“This is no longer about the deficit; it’s about bumper stickers,” Sen. Richard J. Durbin (D-Ill.), the No. 2 Senate Democrat, told reporters. “It’s time for Speaker Boehner to acknowledge we have an agreement . . . and he has to tell his tea party rough riders to put their horses in the barn and save this argument for another day.”

Before Thursday’s House vote on the stopgap measure, Senate Minority Leader Mitch McConnell (R-Ky.) urged Senate Democrats to pass the short-term bill as a last-ditch effort to avert a shutdown.

“Democrats can either take up and pass this reasonable bill that falls well within the bounds of what their own leadership has defined as acceptable or shut down the government,” McConnell said in a floor speech. “That’s it. That’s the choice. So rather than talking about a shutdown, I hope our Democrat friends join us in actually preventing one. There is one way to do that — by quickly passing the House bill and sending it to the president for his signature before tomorrow night.”

But Reid emphatically rejected the House stopgap measure in his own floor speech Thursday morning.

“That is a non-starter in the Senate,” he said. “It’s not just bad policy — it’s fantasy. We all heard the president say that he won’t accept anything short of a full solution.”

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