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No deal reached as clock ticks down

By David Espo

Associated Press

Published: Thursday, April 7 2011 11:54 p.m. MDT

House Speaker John Boehner of Ohio listens at left, as Senate Majority Leader Harry Reid of Nev. speaks to reporters outside the White House in Washington, Thursday, April 7, 2011, after their meeting with President Obama regarding the budget and possible government shutdown. (AP Photo/Pablo Martinez Monsivais)

Associated Press

WASHINGTON — 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 government shutdown at midnight 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 his second sit-down of the day with the lawmakers.

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. The White House announced he had postponed a scheduled trip to Indianapolis for the morning.

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.

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 the evening meeting, Reid and Boehner issued a brief written statement that said they had narrowed their disagreements 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.

"They're difficult issues. They're important to both sides and so I'm not yet prepared to express wild optimism," said the president.

For all the brinksmanship — and the promise of more in the Senate on Friday — 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," he added.

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.

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