Government shutdown threat looms over budget fight

WASHINGTON Sun Feb 20, 2011 3:40pm EST

1 of 2. Senator Charles Schumer (D-NY) celebrates his re-election victory at a rally in New York November 2, 2010.

Credit: Reuters/Shannon Stapleton

WASHINGTON (Reuters) - Senior Senate Democrats slammed Republicans on Sunday for a "reckless" threat to shut down the government amid deepening political posturing on both sides over federal spending and the budget deficit.

The House of Representatives voted on Saturday to cut federal spending by $61 billion through September. But the Republican measure will likely die because Democrats who control the Senate oppose it and President Barack Obama vowed to veto it.

Obama has outlined his own plan for less-severe spending cuts in 2012, and has warned that tightening the belt too much too soon could harm the slow economic recovery.

Democratic Senator Charles Schumer criticized House Speaker John Boehner and Senate Republican Leader Mitch McConnell over talk among some Republicans that they would rather shut down the government than relent on their spending cut demands.

"Unfortunately Speaker Boehner seems to be on a course that would inevitably lead to a shutdown ... That's reckless," Schumer said on CNN's "State of the Union" program.

"We have said shutdown is off the table ... Boehner, Mitch McConnell, other Republican leaders have not taken it off the table when asked, and there are lots of people on the hard right clamoring for a shutdown."

With the government funded only through March 4, the government could run out of money if lawmakers fail to act, but both sides have been urging compromise. That was seen as the likeliest outcome, even by one of the House's new breed of small-government, deficit-slashing freshman Republicans.

"When it goes to the Senate, they're going to make their changes and then it's got to go to the president. So you know, it will not be in the form that we produced yesterday morning at 5 a.m.," Representative Steve Southerland, a first-term Republican from Florida, said on ABC's "This Week" news program.

Democrats also want to shrink the deficit, projected to hit $1.65 trillion or 10.9 percent of the economy this year. Senate Democrats are likely to endorse a spending bill that cuts funds, but not as deeply as the House did.

NOT SEEKING SHUTDOWN

The House bill is more than an effort to cut the deficit. Republicans are also trying to use the budget process to starve government programs such as healthcare and regulation of Wall Street and the environment that they have long opposed.

Republican Representative Paul Ryan, chairman of the House Budget Committee, downplayed the shutdown scenario on CBS' "Face the Nation" program.

"We're not looking for a government shutdown, but at the same time we're also not looking at rubber stamping these really high, elevated spending levels that Congress blew through the joint two years ago," Ryan said.

The United States faces global criticism for running huge deficits financed by borrowing from abroad. Treasury Secretary Timothy Geithner told officials of the Group of 20 major nations on Saturday that the White House's budget for 2012 will meet its G20 commitment to halve fiscal deficits by 2013.

The deficit hole has been deepened by the Bush-era tax cuts for the wealthy that Republicans insisted on extended in an economic stimulus deal with Obama last year.

But the House-passed budget left untouched major items such as the Medicare and Medicaid healthcare programs for the elderly and the poor, seen as key drivers of the deficit, along with the economic downturn and the costly wars in Iraq and Afghanistan.

"We need to close some of the tax loopholes for special interests like the oil companies, $40 billion worth of loopholes. I hope our Republican friends will join us in closing some of those," Democratic Representative Chris Van Hollen said on CBS's "Face the Nation."

(Editing by Philip Barbara)

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Comments (16)
Doug23 wrote:
Obama and Bush gave $1.5 trillion of our money to our masters, the International Bankers. Now we have to cut spending to pay for that and to save up for the next $1.5 Trillion they will give the Bankers and Wall Street. They’re arguing about cutting $61 billion, but they gave the Bankers $1,500 billion (=$1.5 trillion). The system is corrupt and we’re fighting over the leftover scraps. Shut it down and leave it shut down. It’s an abomination.

Feb 20, 2011 1:47pm EST  --  Report as abuse
crbob wrote:
The ball is in the senate court and the presidents veto pen…..let them kill the bill and close down the government….until the dems and the president wake up to the fact that no more money can be spent let the government stay closed down…….what part of “broke” don’t they understand?

Feb 20, 2011 2:02pm EST  --  Report as abuse
TwoDog wrote:
Hilarious. Finally the people demand that the Federal government stop writing hot checks and live within our means, get the neocon fake republicans to begin fearing association with the irresponsible beltway big spenders, and now ther fools begin to posture. Trust me neocons, democrats, the bifg spending bus has left the station on the highway to he##. The Citizens of this country are saying the buck stops here. No more BS.

Feb 20, 2011 2:16pm EST  --  Report as abuse
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