Congress returns to work this week with no plan to reverse across-the-board spending cuts that took effect Friday, but with hope on both sides of the aisle of averting an end-of-the-month showdown that could result in a government shutdown.
The House plans to vote Thursday on a spending measure that would keep the government running after its current funding mechanism elapses March 27.
It would provide funding through the end of the fiscal year on Sept. 30, allowing new flexibility to the Pentagon to manage the $40 billion hit the military took Friday but otherwise locking in the sequester’s lower spending levels.
House Speaker John A. Boehner (R-Ohio) said on NBC’s “Meet the Press” that he discussed the need to avoid a shutdown with President Obama at a meeting Friday between the president and congressional leaders. The interview was filmed after that meeting and aired Sunday morning.
“The president this morning agreed that we should not have any talk of a government shutdown,” Boehner said in the interview. “So I’m hopeful that the House and Senate will be able to work through this.”
Following Boehner on “Meet the Press,” Gene Sperling, the chairman of Obama’s National Economic Council, agreed that it appeared likely the two sides could avoid threatening a shutdown.
That would mean the sequester would remain in effect until the end of the fiscal year. But Sperling insisted that Obama will work to undo its cuts in coming months as part of a broader discussion about continued deficit reduction.
“We would still be committed to trying to find Republicans and Democrats that will work on a bipartisan compromise to eliminate, get rid of the sequester,” he said.
Assuming that the two sides agree soon on government spending for the latter half of the fiscal year, Washington’s next major fiscal battle will probably come over the summer, when the nation once again bumps up against the debt ceiling.
Sperling said he believed the pain of the across-the-board spending reductions will make itself felt over the next few months and could cause Republicans to rethink their opposition to new tax revenue as part of a debt deal — the major point separating the two parties on fiscal issues.
“Our hope is that as more Republicans start to see this pain in their own districts that they will choose bipartisan compromise over this absolutist position,” he said.
Sperling insisted that Obama remains open to the kind of deal he last discussed with Boehner in December, in which Democrats would trade cuts to entitlement programs for closing tax loopholes and ending some deductions, resulting in higher tax revenue.
Sperling said Obama spent part of Saturday making phone calls to rank-and-file senators in both parties who had expressed interest in that kind of “grand bargain,” a potential first step toward reviving the idea before Washington’s next major budget clash.
The calls came after Obama met at the White House last week with Sens. Lindsey O. Graham (R-S.C.) and John McCain (R-Ariz.).
Graham and Sen. Kelly Ayotte (R-N.H.) indicated Sunday they might have some interest in a deal that would address the debt through both entitlement reform and higher tax revenue.
“We don’t need to raise taxes to fund the government,” Graham said on CBS’s “Face the Nation.” “We need to raise taxes to get our nation out of debt.”
At the leadership level, Boehner and Senate Minority Leader Mitch McConnell (R-Ky.) offered no indication Sunday that they had any interest in budging on taxes.
Boehner said Republicans were done raising taxes after agreeing to the “fiscal cliff” deal in January that raised more than $600 billion in revenue. Any new revenue gained from closing tax loopholes, he said, should be put into lowering tax rates.
“The president got $650 billion of higher taxes on the American people on January the 1st,” Boehner said. “How much more does he want? When is the president going to address the spending side of this?”
And McConnell said he doubted that calls from Obama to Republican senators would result in any deal that would replace even part of the sequester with higher taxes.
“So far, I haven’t heard a single Senate Republican say they’re willing to raise one dime in taxes in order to avoid a spending-reduction commitment that we made on a bipartisan basis just a year and a half ago,” McConnell said on CNN’s “State of the Union.”
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