August 1, 2012 in Nation/World

Shutdown would be averted with deal

Tentative pact offers short-term budget solution
Lisa Mascaro McClatchy-Tribune
 
Associated Press photo

Senate Majority Leader Harry Reid, of Nev., announces to reporters on Capitol Hill in Washington on Tuesday that he and GOP House Speaker John Boehner have reached an agreement to keep the government running for six months when the current budget year ends on Sept. 30.
(Full-size photo)

WASHINGTON – Congressional leaders reached a tentative budget deal with the White House on Tuesday that would avert a politically risky government shutdown right before the election.

The six-month stopgap measure would keep the government running at current levels through March – dashing, for now, the hopes of conservative Republicans who want to make steeper cuts, including eliminating money for President Barack Obama’s health care law.

Although the deal would end the threat of a stalemate that could be politically damaging for both parties, it does not address the looming “fiscal cliff” of tax hikes and mandatory spending cuts that are scheduled to take effect after Jan. 1.

Votes on the tentative deal are set for September, before the new fiscal year begins on Oct. 1, clearing the post-election lame-duck session for the tax-and-spending debate.

“This is very good, because we can resolve these critical issues that directly affect the country as soon as the election’s over and move on to do good things,” said Senate Majority Leader Harry Reid, D-Nev.

White House press secretary Jay Carney called Tuesday’s breakthrough a “welcome development.”

The swift agreement with House Speaker John A. Boehner, R-Ohio, is a turnaround from the shutdown threats that have dominated this Congress.

The GOP’s House majority was elected on pledges to slash government spending. Republican leaders calculated it was better to reach a short-term agreement to pay for the routine functions of government so lawmakers could campaign on broader issues.

Tax rates will rise and spending reductions will sharply cut defense and domestic programs in the new year if Congress fails to compromise.

The George W. Bush-era tax rates are scheduled to expire Dec. 31, and the across-the-board spending reductions were part of a deal to raise the debt ceiling.

Republicans want to keep tax rates low across all income levels, including for the wealthy, while sparing the Pentagon from steep cuts.

Obama wants to raise taxes on the top 2 percent – income above $250,000 for families and $200,000 for individuals – and trim the budget more equitably across the military and domestic accounts.

“Taking this issue off the table will keep the larger focus on jobs, the economy and President Obama’s failed economic policies,” said a GOP leadership aide, who requested anonymity to discuss strategy. “That’s where Republicans win and Democrats lose.”

Republicans also risked being blamed for brinkmanship if the government teetered on the verge of a shutdown.

As both parties try to configure the post-election landscape, avoiding a shutdown crisis has been a priority for top conservatives and their allies at the Heritage Foundation, who helped lay the groundwork for the compromise.

“A funding fight at that time would have added fuel to the fire,” said Michael Needham, the chief executive of Heritage Action, the foundation’s political arm.

But not all Republicans are falling in line, and the GOP risks fallout from its tea party constituents.

“For conservatives like me to agree to that level, those on the left will have to compromise too,” said Rep. Tim Huelskamp, R-Kan.

He wants provisions attached to the bill to eliminate money for Obama’s health care plan and to limit abortions – deal breakers for Democrats.

To pass the bill, Boehner will likely need Democrats. He has been reluctant to rely too heavily on them in past deals lest he irritate his more conservative colleagues and weaken his hold on his party.

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