April 11th, 2011
02:15 PM ET

Obama, Congress prepare for next round of budget fights

Alan Silverleib

Washington (CNN) - Partisan warfare over taxes and spending is set to take center stage again in Washington this week, as Congress takes up a deal covering the budget for the remainder of the current fiscal year and President Barack Obama unveils his long-awaited deficit reduction plan.

House Republicans are also expected to push for a vote by Friday on their budget proposal for the next fiscal year. That plan, which cuts roughly $6 trillion in spending over the next decade while radically overhauling Medicare and Medicaid, is fiercely opposed by Democrats at both ends of Pennsylvania Avenue.

The outcome of the fight promises to have a major impact not only on the 2012 presidential race but on the size and scope of the federal government for years to come.

Obama and congressional Republicans have "very different visions over what the role of the federal government should be in our society," House Speaker John Boehner, R-Ohio, said Monday morning on Fox News. But "it's our obligation to sit down and ... find a way to work together."

Details of the deal covering the rest of fiscal year 2011, which ends September 30, are to be released Monday night.

The package, which was finalized late Friday in order to avoid a partial government shutdown, cuts spending by a total of $38.5 billion. It has been called insufficient by some Tea Party conservatives and labeled extreme in liberal quarters.

The House is scheduled to vote on the deal Wednesday, with the Senate following suit shortly thereafter.

Adding to the uproar: a coming debate over the need to raise the federal government's debt limit. Washington is rapidly nearing the roughly $14.29 trillion ceiling and is expected to exceed the cap by mid-May. Although the Federal Reserve can take some steps to delay the need to raise the cap until July, a failure to do so could ultimately lead to a default.

A default could devastate the economy, leading to a crashing dollar and skyrocketing interest rates, among other things.

Republicans are using the vote on the debt ceiling to demand additional spending reductions.

Full story

Filed under: 360° Radar • 360º Follow • Alan Silverleib
April 8th, 2011
09:27 PM ET

Source: Budget deadline may be pushed back one week

Alan Silverleib and Tom Cohen

Washington (CNN) - Budget negotiators are working on a proposal to keep the federal government open for another week while Democratic and Republican leaders put together a broader deal, a senior Republican close to the talks told CNN Friday night.

Disputes over controversial topics like abortion - an apparent sticking point in the talks - have been "essentially resolved," the source said.

The source warned, however, that any deal is still contingent on an agreement on the final spending numbers.

A Democratic source told CNN earlier in the evening that negotiators were considering a three-day funding extension that would not include any language tied to the abortion issue.

Live blog: Latest developments on a possible shutdown

Regardless of the specifics, both the House of Representatives and the Senate need to pass a new federal funding measure by midnight to prevent a partial government shutdown.

The White House has indicated that President Barack Obama could sign another short-term funding measure if negotiations on a broader package covering the rest of the fiscal year were making progress.

House Speaker John Boehner, R-Ohio, said Friday that he would agree to a short-term measure if there is a deal already in place on that package.

Earlier in the day, administration officials said they were optimistic about the possibility of reaching an 11th-hour budget deal with the Republicans.

Full story

Filed under: 360° Radar • 360º Follow • Alan Silverleib • Tom Cohen
April 7th, 2011
06:15 PM ET

No deal yet as government shutdown looms

Alan Silverleib and Tom Cohen

Washington (CNN) - House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nevada, announced Thursday afternoon that negotiators had not yet been able to reach an agreement on a federal budget covering the remainder of the current fiscal year.

The two men made the announcement after emerging from a round of talks at the White House with President Barack Obama. They said they expected to resume talks later Thursday afternoon and would return to the White House for additional discussions at 7 p.m. ET.

If Congress and the White House cannot reach an agreement by midnight Friday, when the current spending authorization measure expires, parts of the government will close down.

Shortly before Reid and Boehner addressed reporters, the GOP-controlled House of Representatives passed a short-term government spending bill that would delay the impending shutdown by one additional week.

The measure, which passed 247-181 in a largely party-line vote, funds the Pentagon for the remainder of the current fiscal year. It would also slash federal spending, however, by another $12 billion and is strongly opposed by Democrats in both Congress and the White House because of the programs for which funding would be cut.

Reid declared the bill a "nonstarter" before it cleared the House. The White House promised a veto if it reaches Obama's desk.

Full story

Filed under: 360° Radar • 360º Follow • Alan Silverleib • Tom Cohen