Lawmakers confident on short-term budget deal

Reuters News
Posted: Mar 22, 2011 11:42 AM

By John Whitesides

WASHINGTON (Reuters) - Senior lawmakers in both parties said on Sunday that Congress will pass a stopgap spending bill to avert a government shutdown this week, but warned there are still big obstacles to long-term deals on the budget and debt.

Leaders in both parties backed a plan by U.S. House of Representatives Republicans for a temporary three-week spending bill to keep the federal government operating through April 8 while they try to find a broader compromise.

"I don't think we ought to let the government shut down," Senate Republican leader Mitch McConnell said on "Fox News Sunday," predicting the Senate would approve the House Republican plan.

"I think it will pass in the House this week and later in the Senate," Senate Democratic leader Dick Durbin said of the temporary spending bill on CNN's "State of the Union."

The short-term measure is needed to give Congress time to hammer out a spending plan to fund the government through September 30, when the current fiscal year ends.

Without another temporary spending bill, the federal government, starting on March 19, would have to begin shutting down nonessential services such as national parks, and could give layoff notices to workers who issue Social Security retirement checks.

Republicans, who made big gains in last year's elections with promises to cut government spending, have demanded deep spending cuts of about $60 billion over the next six months. Democrats have resisted, expressing concern that the cuts would cripple key social programs and economic recovery efforts.

Republicans pushed President Barack Obama and Democratic congressional leaders to come up with their own list of deeper spending cuts.


"We will pass the stopgap but this is not the pattern we are going to continue down the future. We think the Democrats need to step up and actually produce something," Representative Kevin McCarthy, the third-ranking House Republican, said on CNN.

Other fights loom even after lawmakers agree on this year's budget. Congress must begin work on a budget for the next fiscal year, which starts on October 1, and must vote in the next few months on increasing the government's debt ceiling.

McConnell predicted Senate Republicans would not support a move to increase the government's borrowing authority unless Democrats make significant debt-reduction efforts.

"I don't intend to support raising the debt ceiling, and I don't believe any Senate Republicans do, unless we do something important related to spending and debt," McConnell said, without discussing specifics.

"It is going to have to carry something with it that the markets, foreign countries and the American people believe is a credible effort to get a handle on spending and the debt effort," McConnell said.

Federal Reserve Chairman Ben Bernanke has warned that a failure by Congress to raise the debt ceiling in the next few months could lead to a default with dire economic consequences.

Conservative Republicans have pushed for deep spending cuts concentrated in domestic programs, which are a small share of the federal budget, to pare a projected $1.65 trillion budget deficit this year.

The temporary cuts would eliminate $6 billion in spending over the bill's three-week life, including $3.5 billion through program reductions such as unused U.S. Census funds, and $2.6 billion by killing lawmakers' pet projects, called earmarks, aimed at specific congressional districts.

"We are willing to be reasonable and meet in the middle as long as it doesn't cut the kinds of things that help America grow," Democratic Senator Chuck Schumer said.

(Additional reporting by James Vicini and Eric Beech; Editing by Will Dunham)