Congress aims to finish 2011 spending plan

Reuters News
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Posted: Mar 21, 2011 3:38 PM

By Richard Cowan

WASHINGTON (Reuters) - Congressional leaders and the White House voiced support on Tuesday for striking a deal on funding for the government through September 30, setting up talks in earnest on how much public spending to cut.

As the House of Representatives approved its sixth stopgap spending bill in five months -- one to keep the government running through April 8 -- House Speaker John Boehner said he was now hopeful of ending the long fight over spending priorities.

"We've been in conversations with the Senate and the White House. We're hopeful we'll have a long-term continuing resolution through September 30 and we're hopeful that we'll have it soon," Republican Boehner told reporters.

Republicans are seeking deep cuts in government spending this fiscal year while Democrats say tightening the belt too much could damage the economic recovery.

Senate leaders echoed Boehner, saying there had been ongoing talks and the goal was to stop passing temporary funding bills and finish the fiscal 2011 spending debate by April 8.

White House spokesman Jay Carney had a similar message, saying, "It is time for us to come together, find common ground and resolve this issue in a sensible way."

Carney added, however, that President Barack Obama would not "sacrifice critical investments" in education and other areas where Republicans have been pushing for reductions.

Getting a deal will still take some work.

In pushing the deeper cuts of around $61 billion this year, Republicans also hope to achieve sweeping policy changes: defunding Obama's landmark healthcare reform laws, undercutting financial reform law enforcement and stopping the Environmental Protection Agency from regulating greenhouse gases blamed for global warming.

But there has not been enough support to pass those initiatives in the Senate, where Democrats are in the majority and have been seeking only about $10 billion in spending cuts.

Boehner is under heavy pressure to be tough on spending from fiscally conservative Tea Party Republicans who made big gains in congressional elections in November with pledges to limit spending and reduce the deficit.

TEA PARTY

The House speaker needed Democratic support on Tuesday to pass the latest temporary spending bill after 54 of his Republicans defected, further underscoring the need for a quick compromise on longer-term funding.

The House, by a vote of 271-158, approved a three-week extension of government funding while trimming $6 billion from current spending. The Senate is expected to do the same by Friday.

In a nod to the Tea Party, Boehner warned that Congress must make "real spending cuts" before he would allow legislation to go forward raising the Treasury Department's borrowing authority. He did not elaborate.

The current limit on U.S. borrowing is set at $14.3 trillion and Treasury has warned it could bump up against the ceiling as soon as mid-April, causing a debt default.

U.S. officials fear serious consequences to the global economy if Congress fails to raise the debt limit on time. Boehner said in January a government default "would be a financial disaster not only for our country, but for the worldwide economy."

A senior House Democrat, Representative Chris Van Hollen, said in a Fox television interview that a deal on spending should include the elimination of tax breaks for oil and gas companies at a time of strong corporate profits. "Let's broaden the conversation," he said.

The debate in Congress over spending comes as many states struggle with steep deficits after a long economic downturn.

Ohio Republican Governor John Kasich on Tuesday unveiled a $55.5 billion two-year budget that would sell off five prisons and slices aid to local governments to help close an $8 billion budget gap.

(Additional reporting by Kim Dixon and Thomas Ferraro; editing by Mohammad Zargham)