Congress Close to Short-Term Spending Deal
The Wall Street Journal reports:
Republicans and Democrats appear increasingly likely to reach a deal that would avoid a government shutdown Friday, but in doing so they are deferring and possibly deepening the challenge of reaching a longer-term spending agreement.
House Republicans plan to begin debate Tuesday on a bill that would keep the government open for two additional weeks while cutting $4 billion in spending. Senate Democrats are signaling they will accept the GOP proposal, or something similar, by week's end.
If they don't approve this or some other spending plan, the government will have to shut many of its operations and furlough many employees on March 5. Currently, the government is operating on a spending plan that expires on March 4.
In crafting the plan to fund government operations for two additional weeks, GOP leaders are calling only for cuts that many Democrats find palatable. This will make it more difficult to reach a bipartisan agreement on additional cuts when the two sides begin negotiations on a spending measure to fund the government until Sept. 30, the end of the fiscal year.
Passage of the short-term deal this week would set off a two-week period in which House Republicans and Senate Democrats would try to bridge a $57 billion gap in their spending plans for the rest of fiscal 2011. Comments by both sides Sunday suggested they were no closer to an agreement on that measure.
Senate Budget Committee Chairman Kent Conrad (D., N.D.) said on CNN's "State of the Union" program that making steep budget cuts during fragile economic times is risky. "Does it make sense to do? I don't believe it does," he said.
Mr. Conrad cited a study by Goldman Sachs Group Inc. that said the budget cuts would damp economic growth by 1.5% to 2% in the second and third quarters, compared with keeping current spending levels. "Does that make sense when one in every six Americans is unemployed or underemployed?" he said.
House Speaker John Boehner (R., Ohio), speaking to a convention of the National Religious Broadcasters in Nashville, Tenn., stressed the government's dire financial status.
"We're broke—broke, going on bankrupt," Mr. Boehner said, according to a prepared text. "Just as a bankrupt business has trouble creating jobs, so does a bankrupt country."
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