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Budget talks stall as deadline approaches

WASHINGTON – President Barack Obama and congressional leaders on Tuesday failed to agree on a plan to keep the government funded past Friday, heightening fears that many federal activities could shut down this weekend.

Obama met for an hour and 20 minutes at the White House with House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., who’ve been trying for weeks to iron out a compromise.

“We’re now closer than we’ve ever been to getting an agreement,” Obama said after the meeting. “The only question is whether politics or ideology are going to get in the way of preventing a government shutdown.”

At the Capitol, that appeared to be happening, as the public rhetoric grew harsh. If Reid and Boehner, who later reconvened for private talks, don’t reach a deal, Obama wants them back at the White House for more talks today.

Government spending authority runs out Friday. If no agreement is reached on providing new funding for the rest of the fiscal year, through Sept. 30, many federal activities are expected to begin shutting down Saturday, such as museums, monuments and national parks.

Obama and his aides refused again to give specifics of their contingency plans for a shutdown. In the past, hundreds of thousands of “nonessential workers” across the country have been told not to report to federal work during budget shutdowns, while others deemed essential did go to work. So far, the Obama administration isn’t saying which workers will be told to stay home and what federal functions won’t be performed.

Boehner offered a tentative solution Tuesday: extending the funding deadline another week while cutting $12 billion from current spending and funding the Pentagon for the rest of the fiscal year.

Forget it, Obama said.

“We’ve already done that twice,” he said, referring to previous short-term budget extensions. “That is not a way to run the government. I can’t have our agencies making plans based on two-week budgets.”

Democrats are willing to cut $33 billion from spending for the final six months of this fiscal year. The House of Representatives, on a party-line vote, approved $61 billion in cuts on Feb. 19 and added dozens of social-policy changes, such as cutting funds that would implement the 2010 health care overhaul law.

Privately, people close to the budget talks say that most of those social changes are likely to be dropped. But in return, Republicans want to cut more than $33 billion.

According to a senior administration official, Boehner said at the White House meeting that he wanted what amounted to $40 billion in cuts.

That surprised White House aides, who believed Boehner had accepted the $33 billion number, at least if details could be hammered out. Boehner has repeatedly said there was no agreement, however.

“We’re coming down to the home stretch and he decided to move the finish line out,” said the White House official.

Meanwhile, some conservatives indicated that they were eager to end this scrap and move ahead with negotiations on the budget for fiscal 2012, which begins Oct. 1. House Budget Committee Chairman Paul Ryan, R-Wis., unveiled a 73-page plan that contained sweeping budget changes – and restructuring of the government – that many conservatives have long sought. That’s where many Republicans want to take their stand, not behind the relatively minor spending cuts over the next six months that are hanging up Reid and Boehner.

Ryan’s plan would reduce spending below Obama’s projected levels by $6.2 trillion over the next 10 years. His Republican-majority committee plans to write legislation incorporating his proposals today. The full House is expected to consider it next week.

The plan could provide conservatives with a convenient way to accept a deal this week for fiscal 2011, followed by a vote next week for Ryan’s plan, which tackles long-term issues and would make dramatic changes to Medicare, Medicaid and the tax system.

Ryan’s plan follows other recent budget proposals, notably the bipartisan National Commission on Fiscal Responsibility and Reform’s report in December, which spelled out how to cut spending by $4 trillion over a decade, and Obama’s $3.73 trillion fiscal 2012 budget, which would add $13 trillion to the national debt over the next decade.

Ryan’s plan resists cuts in defense spending other than those that Defense Secretary Robert Gates already proposed. It retains the Bush-era tax reductions for top earners, which Obama wants to end eventually. And it would make big changes in how beneficiaries get Medicare and Medicaid assistance.

Medicaid would become a “block grant” program, with Washington sending money to state capitals, which would decide how much to spend on recipients. Currently Medicaid is a federal-state shared program that provides health coverage to the poor according to rules set by Washington.

For Medicare, which pays for medical services for those 65 and older, House Republicans would have recipients choose private insurance plans and the government would subsidize those plans. People now 55 and older would retain the existing Medicare plan.

Democrats and liberal groups bitterly criticized Ryan’s plan.

“Representative Ryan’s proposal is partisan and ideological,” Senate Budget Committee Chairman Kent Conrad, D-N.D., said. “He provides dramatic tax cuts for the wealthiest, financed by draconian reductions in Medicare and Medicaid. His proposals are unreasonable and unsustainable.”

Tribune Washington bureau contributed to this report.