Senate Democrats draft spending cuts

Feb. 24 (Bloomberg) -- U.S. Senator Thomas Carper, a Delaware Democrat, discusses the outlook for a government shutdown over the budget debate. Carper, speaking with Betty Liu on Bloomberg Television's "In the Loop," also discusses crude oil prices. (Source: Bloomberg)
Washington Post Staff Writers
Thursday, February 24, 2011; 8:20 PM

With a political standoff over spending threatening to trigger a federal shutdown next week, Senate Democrats began drafting a plan Thursday to slice billions of dollars from domestic agency budgets over the next seven months, yielding to Republican demands to reduce the size of government this year.

The plan will involve accelerating some of the $33 billion in program terminations and reductions included in President Obama's proposed budget for next year, a senior Senate Democratic aide said Thursday. Democrats are also looking at cuts that have been adopted by the Republican-controlled House, such as a plan to strip $8.5 billion for pet projects known as earmarks out of a measure aimed at keeping the government running through Sept. 30.

"This would be a compromise," the aide said, "accepting something that they've already asked for."

The aide, who spoke on the condition of anonymity because the plan is not finalized, declined to say how much Senate Democrats plan to cut, a critical question as lawmakers brace for a week-long game of chicken over spending. Unless a compromise emerges between the Republican House and the Democratic Senate, the temporary measure that is financing federal operations will expire March 4 and the government will be forced to shut down.

Republicans welcomed the decision by Senate Democrats to abandon their previous stand against cuts of any kind in the current fiscal year while noting that the two parties remain far apart.

"It sounds like Senate Democrats are making progress towards our goal of cutting government spending to help the private sector create jobs," said Michael Steel, spokesman for House Speaker John A. Boehner (R-Ohio). "Hopefully, that means they will support the [bill] with spending cuts that we will pass next week, rather than shutting down the government."

Last week, the House voted to slice $61 billion from domestic agency budgets between March and September, a proposal the White House and congressional Democrats have derided as draconian and potentially harmful to the economy. They cited a new analysis by Goldman Sachs projecting that the House spending plan would reduce economic growth by as much as 2 percentage points in the second and third quarters, creating a significant new drag on the recovering economy.

But many House conservatives say that $61 billion is not enough. On Thursday, they cited a new Gallup poll showing that 25 percent of those surveyed think the Republican spending plan is about right, while 37 percent want to see spending cut deeper.

"In other words, 62 percent say spending cuts should at least reach the level approved by the House last week," Brian Straessle, a spokesman for the conservative Republican Study Committee, said in a statement.

To give lawmakers more time to break the impasse, House leaders are developing a stopgap measure that would keep the government open through March 18 while talks continue. But even that measure must contain cuts, Boehner has said, and the House is working on a package of $4 billion in specific reductions.

Those proposed cuts, which Republicans expect to outline Friday, are designed to be relatively noncontroversial, GOP aides said, with many lifted directly from Obama's wish list for reducing spending. Boehner plans to push the bill through the House early next week and send it on to the Senate, where many moderate Democrats are facing difficult reelection campaigns next year and want to avoid getting tagged with a big-spender label.

If the House bill were brought to the Senate floor, Republicans there would need just four Democratic defections to pass it. But Senate leaders are trying to short-circuit that strategy by opening debate on their own plan for spending cuts when lawmakers return to Washington from the week-long Presidents' Day break.

Meanwhile, Senate leaders have summarily dismissed Boehner's two-week measure, arguing that it represents a short-term version of the $61 billion bill Democrats have rejected.

"What they have proposed is a rehash of what they've said before. It would be the same cuts in a different guise," said Sen. Charles E. Schumer (D-N.Y.). "We're showing that we are willing to go further. Have they? Not once."

Senate Democrats have already agreed to reduce spending by $41 billion from Obama's request for fiscal 2011, "and we're willing to go further," Sen. Richard J. Durbin (D-Ill.) said. "But that requires the sort of good-faith negotiations House Republicans refuse to engage in."

Durbin repeated the Democratic accusation that "House Republicans seem more interested in shutting down the government" than in compromising with the Senate. But both sides were frantically maneuvering to avoid blame for a shutdown, which Thursday seemed to be an increasing possibility.

At the White House, press secretary Jay Carney said administration officials are working with House and Senate leaders to encourage a compromise. He declined to take a position on a two-week extension, saying, "I don't want to prejudge different options."

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