Shutdown talks yield no deal as clock ticks

WASHINGTON (AP) - Time growing short, President Barack Obama and congressional leaders failed to reach agreement Thursday night on a compromise to cut spending and head off a midnight Friday government shutdown that no one claimed to want.

Obama, House Speaker John Boehner and Senate Majority Leader Harry Reid all said the differences had been narrowed in a pair of White House meetings during the day. They directed their aides to work through the night in pursuit of a deal.

"I expect an answer in the morning," Obama said in an appearance in the White House briefing room shortly after the meeting ended.

The comments capped a day in which the president, Reid, D-Nev., and Boehner, R-Ohio, bargained and blustered by turns, struggling to settle their differences over spending cuts and other issues while maneuvering to avoid any political blame if they failed.

With the economy just now beginning to create jobs in large numbers, the president said a shutdown would damage the recovery. "For us to go backwards because Washington couldn't get its act together is just unacceptable," he said.

But agreement remained elusive, and Republicans passed legislation through the House at mid-day to fund the Pentagon for six months, cut $12 billion in domestic spending and keep the federal bureaucracy humming for an additional week. "There is absolutely no policy reason for the Senate to not follow the House in taking these responsible steps to support our troops and to keep our government open," said Boehner.

But Obama flashed a veto threat even before the bill passed on a 247-181, mostly party-line vote. The administration issued a statement calling it "a distraction from the real work" of agreeing on legislation to cover the six months left in the current fiscal year, and there was no indication Reid would allow a vote on it.

As they left the White House after their second visit of the day, Reid and Boehner issued a brief written statement that said they had narrowed their differences and said they would "continue to work through the night to attempt to resolve" the remaining ones.

Republicans want deeper spending cuts than the Democrats favor, and also are pressing for provisions to cut off federal funds to Planned Parenthood and stop the EPA from issuing numerous anti-pollution regulations.

For all the brinksmanship, there was agreement that a shutdown posed risks to an economy still recovering from the worst recession in decades.

The political fallout was less predictable, especially with control of government divided and dozens of new tea party-backed Republicans part of a new GOP majority in the House. Twin government shutdowns in the mid-1990s damaged Republicans, then new to power in Congress, and helped President Bill Clinton win re-election in 1996.

This time, individual lawmakers worked to insulate themselves from any political damage. Sens. Sherrod Brown, D-Ohio, and Ben Nelson, D-Neb., both seeking new terms in 2012, became the latest to announce they would not accept their congressional salary during any shutdown. "If retroactive pay is later approved, I'll direct my part to the U.S. Treasury," said Nelson.

One day before the shutdown deadline, events unfolded in rapid succession.

In a shift in position, Obama said he would sign a short-term measure keeping the government running even without an agreement to give negotiations more time to succeed.

That was one of the options available to Reid, although Boehner said he was confident Democratic lawmakers would persuade "Reid and our commander in chief to keep the government from shutting down" by signing the House-passed bill.

At the White House, a senior budget official said the impact of a shutdown "will be immediately felt on the economy."

It also would be felt unevenly, said Jeff Zients, deputy director of the Office of Management and Budget. Military troops would not receive their full paychecks, but Social Security recipients would still get monthly benefits, he said.

"National parks, national forests and the Smithsonian Institution would all be closed. The NIH Clinical Center will not take new patients, and no new clinical trials will start," he added in a roll call of expected agency closings.

But the air traffic control system would stay up and running, the emergency management agency would still respond to natural disasters and border security would not be affected.

There was no indication Reid planned to bring the House-passed stopgap bill to a vote, and he accused Republicans of blocking a deal by demanding anti-abortion provisions and a blockade on Environmental Protection Agency regulations on greenhouse gas and other pollutants.

"We don't have the time to fight over the tea party's extreme social agenda," he said.

It was unclear whether the day's maneuvering marked attempts by negotiators to gain final concessions before reaching agreement, or represented a significant setback to efforts to avoid a shutdown.

Either way, Boehner pointed out that the current clash was only the first of many likely to follow as the new, conservative majority in the House pursues its goals of reducing the size and scope of government.

"All of us want to get on with the heavy lifting that is going to come right behind it, dealing with the federal debt and putting in place a budget for next year," he said.

For all the tough talk, it did not appear the two sides were too far from a deal.

Officials in both parties said that in the past day or so, Democrats had tacitly agreed to slightly deeper spending cuts than they had been willing to embrace, at least $34.5 billion in reductions.

Agreement on that point was conditional on key details, but it was a higher total than the $33 billion that had been under consideration.

It also was less than the $40 billion Boehner floated earlier in the week—a number that Republicans indicated was flexible.

There also were hints of Republican flexibility on a ban they were seeking to deny federal funds to Planned Parenthood. Officials said that in talks at the White House that stretched on after midnight on Wednesday, Republicans had suggested giving state officials discretion in deciding how to distribute family planning funds that now go directly from the federal government to organizations such as Planned Parenthood.

That would presumably leave a decision on funding to governors, many of whom oppose abortion, and sever the financial link between the federal government and an organization that Republicans assail as the country's biggest provider of abortions.

Democrats seemed unlikely to accept the proposal, and it was not clear whether it might form the basic framework for an agreement.

But Republicans quickly circulated a list of previous instances in which Obama had signed a similar provision or Reid and House Democratic leaders had supported it as part of a larger measure.

Legislation passed by the House six weeks ago called for $61 billion in cuts and dozens of non-spending provisions.

The Senate has yet to pass an equivalent bill of its own, but Congress has passed a pair of short-term measures in the intervening time to keep the government running, approving a total of $10 billion in spending cuts at the same time.

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Thanks for the post "J," ...... I chuckle a little bit every time I see someone on a Dinar site make fun of Iraqi Politicians and their inability to reach an agreement on something.....when Iraq has been a Democracy for a very short time ....and the U.S. has been a representative republic for well over two hundred years now, and still face similar issues of our politicians inability to complete a task.

Deadline nears: Shutdown looms without agreement

By DAVID ESPO, AP Special Correspondent David Espo, Ap Special Correspondent – 31 mins ago

WASHINGTON – The federal government lurched toward a shutdown for the first time in 15 years on Friday as Republicans and Democrats in Congress struggled for a way out and swapped increasingly incendiary charges over which side was to blame.

The Obama administration readied hundreds of thousands of furlough notices for federal workers, to be released if no deal was reached by a midnight deadline to keep operations running.

"We know the whole world is watching us today," said Senate Majority Leader Harry Reid, D-Nev., and into the night the two sides were still swapping proposals from opposite wings of the Capitol in search of an elusive agreement.

Republicans placed the House on standby for a late-night vote, in case a decision was made to seek a stopgap bill to keep the government running for a few days to allow more time for negotiations.

Reid, President Barack Obama and House Speaker John Boehner all agreed a shutdown posed risks to an economy still recovering from the worst recession in decades. But there were disagreements aplenty among the principal players in an early test of divided government — Obama in the White House, fellow Democrats in control in the Senate and a new, tea party-flavored Republican majority in the House.

For much of the day, Reid and Boehner disagreed about what the disagreement was about.

Reid said there had been an agreement at a White House meeting Thursday night to cut spending by about $38 billion as part of a bill to finance the government through the Sept. 30 end of the budget year.

He said Republicans also were demanding unspecified cuts in health services for lower income women that were unacceptable to Democrats.

"Republicans want to shut down our nation's government because they want to make it harder to get cancer screenings," he said. "They want to throw women under the bus."

Boehner said repeatedly that wasn't the case — it was spending cuts that divided two sides.

"Most of the policy issues have been dealt with, and the big fight is about spending," he said. "When will the White House and when will Senate Democrats get serious about cutting federal spending."

By midday Friday, 12 hours before the funding would run out, most federal employees had been told whether they had been deemed essential or would be temporarily laid off in the event of a shutdown.

The military, mail carriers, air traffic controllers and border security guards would still be expected at work, although paychecks could be delayed.

National parks and forests would close, and taxpayers filing paper returns would not receive refunds during a shutdown.

Passports would be available in cases of emergencies only.

Obama canceled a scheduled Friday trip to Indianapolis — and a weekend family visit to Colonial Williamsburg in Virginia — and kept in touch with both Boehner and Reid.

Senate Republican Leader Mitch McConnell of Kentucky sounded hopeful, predicting an agreement and saying, "I assure you, these are not unresolvable issues."

The House passed legislation on Thursday to keep the government running for another week while also cutting $12 billion in spending — and providing enough money for the Pentagon to operate through Sept. 30.

Boehner urged Obama to reconsider a veto threat.

That seemed unlikely, although Republicans and Democrats alike talked of trying once more to pass a stopgap bill if the larger agreement remained elusive.

Obama has already signed two of those interim bills, which included a total of $10 billion in spending cuts.

The standoff began several weeks ago, when the new Republican majority in the House passed legislation to cut $61 billion from federal spending and place numerous curbs on the government.

In the weeks since, the two sides have alternately negotiated and taken time out to pass interim measures.

Democrats said Republicans had effectively jettisoned numerous demands to block Environmental Protection Agency regulations aimed at polluters, a key stumbling block in negotiations for weeks.

Originally, Republicans wanted to ban federal funds for Planned Parenthood, a health care services provider that is also the nation's largest provider of abortions.

Federal funds may not be used to pay for abortions except in strictly regulated cases, but supporters of the ban said cutting off government funds for the organization — currently about $330 million a year — would make it harder for it to use its own money for the same purpose.

Democrats rejected the proposal in private talks. Officials in both parties said Republicans returned earlier in the week with a proposal to distribute federal funds for family planning and related health services to the states, rather than directly to Planned Parenthood and other organizations.

Democrats said they rejected that proposal, as well, and then refused to agree to allow a separate Senate vote on the issue as part of debate over any compromise bill.

Instead, they launched a sustained campaign at both ends of the Capitol to criticize Republicans.

"We'll not allow them to use women as pawns," said Sen. Patty Murray, a fourth-term lawmaker from Washington who doubles as head of the Democratic senatorial campaign committee.

For Congress and Obama there are even tougher struggles still ahead — over a Republican budget that would remake entire federal programs, and a vote to raise the nation's debt limit.

____

Associated Press writers Andrew Taylor, Alan Fram, Julie Pace and Ben Feller contributed to this story.


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