Budget Battle Will Go Late Into The Night

It looks like the House of Representatives will be working late into the night to decide on their version of spending cuts.

I plan to make a pot of coffee stay up late and watch the action on capitol hill tonight. I expect that this will be one of the lowest points for those of us who are concerned about thousands of people needing help having nowhere to turn. I'm amazed with the rhetoric about how we have to reign in government spending by cutting programs that help people. As usual, the first place congress looks are programs that help the most vulnerable among us. It's easy to do when the people you hurt the most don't have a place at the table. The last time we had a government shutdown was 1995. At that time there was a tremendous outcry from the American people that congress, and the president had to reach a deal to get vital services to the people back on line. Finally, after fierce backlash towards congress, a deal was reached and the government shutdown ended.

Here is the latest on the Budget Battle in Washington

Congress veers toward spending showdown
As Republicans push cuts, threat of government shutdown grows

WASHINGTON (MarketWatch) — The Republican leader of the U.S. House said Thursday he won’t support federal spending at current levels, raising the odds of a major confrontation with President Obama.

John Boehner, speaker of the House, said Republicans plan to keep their word to cut spending, starting with the final seven months of current fiscal year that ends on Sept. 30. The government is on track to report a record-high deficit of $1.65 trillion in fiscal 2011.

“We’re going to do everything that we can to cut spending,” Boehner said.

The White House has already threatened a veto if Republicans make cuts the administration deems excessive. Even before a bill gets to the president, however, the House would have to strike a deal with the Democratic-controlled Senate, where resistance to its proposals is high.

In the ongoing discussion about the economy, the Fiscal Commission's recommendations are being largely ignored. WSJ's David Wessel says the chairmen, Erskine Bowles and Alan Simpson, need a publicity tour to hammer home their recommendations.

Barring a compromise, money to operate most departments of the federal government could run out next month. The government has been funded since last October through a temporary agreement that expires March 4.

Already, both sides are trying to blame the other if an interruption in government services occurs. Harry Reid of Nevada, the Senate’s top Democrat, accused Boehner of threatening to shut down the government without any negotiations.

“We will not stand for that. He’s wrong.” Reid said.

Boehner, on the other hand, said Democrats would bear blame because they are unwilling to bring the budget under control. Deficits would remain at high levels under the White House’s latest long-term budget outline.

“We have some Democrats here on Capitol Hill threatening to shut down the government rather than to cut spending and to follow the will of the American people,” Boehner said.

The last time a shutdown occurred was in 1995, when the public sided with President Clinton in his fight against congressional Republicans. The lesson from that political defeat still lingers with veteran Republicans such as Boehner, who’s seeking to position his party better if another stalemate ensues.

Before any showdown takes place, the House has to finish its budget proposal. Lawmakers have worked through hundreds of amendments over the past two days, with a final vote potentially on Thursday night.

Republicans have pledged to cut spending $100 billion from President Obama request of $3.8 trillion in the current fiscal year.

In the Senate, meanwhile, a handful of Democrats and Republicans are working on a deal to put the nation’s finances in order over the long haul. Yet their proposal might not be ready for several months, if at all.

The senators are using as a jumping-off point for negotiations the recommendations of a bipartisan deficit-reducing commission, which includes a mix of spending cuts and tax increases.

The panel, created by President Obama, released its report late last year. Yet most politicians were hesitant to embrace its conclusions because it urged major reforms in such politically sensitive programs as Medicare and Social Security. Both parties worry the other side will attack them ahead of the 2012 election if they follow the panel’s recommendations.

Boehner, for his part, said he’s willing to negotiate with the president if he wants to pursue a major overhaul of how the government taxes and spends.

“I’ve said it right to his face because I’m ready to sit down with the president. I’m ready to start the conversation,” the speaker said Thursday.

Jeffry Bartash is a reporter for MarketWatch in Washington.