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Senate rejects spending bills from both Republicans and Democrats

By Lori Montgomery and Paul Kane
Washington Post Staff Writers
Wednesday, March 9, 2011; 9:40 PM

The Senate on Wednesday rejected a Republican plan to sharply cut spending this year, as well as a far more modest Democratic proposal, clearing a path for negotiations toward a compromise that could streamline government without damaging critical services.

Senate Democratic leaders are pressing to expand the talks beyond the small slice of the budget that funds government agencies, arguing that any serious effort to reduce record deficits must also include cuts in entitlement programs and higher taxes.

"With this vote out of the way, we're going to do some serious negotiations now," said Majority Leader Harry M. Reid (D-Nev.). "Our goal is to fund the government the rest of this year, and then out-years. This isn't just for the next few weeks. We want to try to get a universal deal and do something good for the country."

Senior White House officials joined GOP leaders in questioning the practicality of that approach, however, saying policymakers must break the impasse over funding for domestic agencies through Sept. 30 before tackling broader - and more politically sensitive - budget issues. Without a spending agreement, the government could shut down as soon as next week, when a temporary bill financing federal operations expires.

"I don't think that anyone thinks between now and March 18 we will resolve entitlement reform, tax expenditures and all the other issues that go into a much bigger deal," White House press secretary Jay Carney told reporters.

House leaders are drawing up another stopgap measure to keep the government open, possibly through April 15, to create more time for negotiations on a full-year bill. That measure, to be unveiled Friday, will include additional spending cuts, many of them endorsed by Democrats, at the rate of about $2 billion per week.

The goal for the GOP is to avoid a government shutdown, which polls show would infuriate voters, while preserving the $61 billion in savings that the House approved last month. Democrats are eager to lock down a deal that stops well short of $61 billion in cuts, but White House budget director Jacob J. Lew said in an interview that the administration is willing to consider one more temporary extension.

"There's broad consensus that we shouldn't shut the government down. We ought to be able to work our way through this," Lew said. "If there's not enough time to resolve a full-year bill between now and next Friday, we're going to need to work toward a short-term agreement."

It was unclear Wednesday how the two parties would work out their differences. Under pressure from fiscal conservatives energized by a landslide victory in last fall's midterm elections, House Republicans are demanding unprecedented budget reductions that would cut deeply into such Democratic priorities as education, energy and the environment. Democrats countered with a plan to cut about $10 billion, an offer that even many in their party found inadequate.

On Wednesday, neither plan mustered the 60 votes needed to avert a Senate filibuster. The House-passed bill failed 56 to 44, with three of the Senate's most conservative Republicans joining a united Democratic caucus in opposition. Democrats complained that the bill would destroy hundreds of thousands of jobs and jeopardize the economic recovery, while the GOP naysayers - Sens. Rand Paul (Ky.), Mike Lee (Utah) and Jim DeMint (S.C.) - complained that it wouldn't do enough to reduce a budget gap projected to hit $1.6 trillion this year.

"With a trillion-dollar deficits, we need to be looking at much more serious cuts," DeMint said after the vote."Our goals have to be much higher if we're going to stop this rampage toward bankruptcy."

The Democratic bill, meanwhile, failed 58 to 42, as 11 members of the Democratic caucus joined all 47 Republicans in opposition. The Democratic defectors, virtually all of whom rejected the spending cuts as insufficient, included fiscal conservatives and senators facing potentially tough reelection campaigns in 2012.

The White House has designated Vice President Biden to lead further talks. Biden, who is out of the country until Friday night, spoke with House Speaker John A. Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) but couldn't reach Reid from Moscow on Wednesday. Aides said no further face-to-face meetings have been scheduled.

Senate Democratic leaders, meanwhile, met with President Obama at the White House to chart their next move.

Earlier in the day, in a speech at the Center for American Progress, Sen. Charles E. Schumer (N.Y.), the third-ranking Democrat in the Senate, argued that his party should shift the debate away from agency budgets and press for cuts to mandatory programs, such as agriculture subsidies, as well as for "revenue raisers," such as the elimination of tax breaks for oil and gas companies.

"A bipartisan compromise," Schumer said, "simply will not be found in discretionary spending cuts alone."

McConnell accused Schumer of calling for "a minivan tax." "Job-destroying tax hikes on small businesses and American families are not the answer to out-of-control Washington spending," he said in a speech on the Senate floor.

Surveying the increasingly vitriolic rhetoric, Sen. Jeff Sessions (Ala.), the senior Republican on the Budget Committee, predicted "a series of intense battles" over temporary funding bills over the next few months, with little progress on a broader plan to put the nation on a path toward solvency.

"Something could break," he said. "But you know, I'm not optimistic about it."

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