Late Budget Talks Produce No Deal

The Wall Street Journal reports:

President Barack Obama emerged from a late-night meeting Wednesday with House Speaker John Boehner and Senate Majority Leader Harry Reid saying the two parties had moved closer to a spending agreement to avoid a government shutdown Friday, but no deal had been struck.

"What [the talks] did was narrow the issues and clarify the issues that are still outstanding," Mr. Obama said. He was confident a deal could be reached to fund the government for the rest of the fiscal year, he said, but "it's going to require a sufficient sense of urgency from all parties involved."

Staffers from the White House and the offices of Messrs. Boehner and Reid were set to work through night, and Mr. Obama said he would check in with them Thursday morning—a day and a half before the deadline—and summon the parties back to the White House if necessary.

"We're going to keep pounding away at this thing," Mr. Obama said.

Messrs. Reid and Boehner appeared together on the White House driveway after the session, itself an unusual occurrence. Mr. Boehner said the meeting was "productive," but added, "We do have honest differences."

Mr. Reid was more positive, issuing a statement saying, "I am hopeful that we will be able to announce a compromise agreement soon."

The talks to avert a government shutdown have lurched this week between optimism and pessimism. Just hours before Mr. Obama's dramatic late-night appearance, the two sides had been struggling to keep negotiations on track. Throughout the day, lawmakers had been more upbeat than earlier in the week, but stubborn issues remained—how to allocate $33 billion to $40 billion in cuts, and whether to include policy provisions demanded by Republicans.

Without an agreement, the government would shut down at midnight Friday.

The talks have yet to tackle some of the most sensitive policy disputes and could still break down. Federal officials continued to prepare for a shutdown and warned that such an outcome could hurt the economic recovery.

About 800,000 federal employees could be furloughed if the government closes, and services across the executive branch would stall. Even government employees who continue to work wouldn't receive paychecks until Congress funds the government again. That means a total of two million workers wouldn't be paid. Activities considered essential would continue, including the mailing of Medicare and Social Security checks.

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