* Senate leaders optimistic over government funding
* Democrats eye more spending flexibility for domestic
By Richard Cowan and David Lawder
WASHINGTON, March 5 The U.S. Congress is moving
rapidly to pass legislation funding the federal government
through Sept. 30, as Senate leaders on Tuesday expressed
eagerness to avoid any threat of agency shutdowns when money
runs out on March 27.
"I'm cautiously optimistic we're going to reach a solution
before we leave here for the Easter recess," which is scheduled
to begin on March 23, Senate Majority Leader Harry Reid told
reporters on Tuesday.
Reid's Republican counterpart, Senator Mitch McConnell, gave
a similarly upbeat assessment, telling reporters, "There seems
to be no interest on either side in having a kind of
confrontational government shutdown scenario."
Their comments follow Republicans' introduction of a new
funding bill in the House of Representatives that will keep in
place $85 billion worth of controversial, across-the-board
spending cuts triggered on Friday.
The House measure, expected to win passage on Wednesday,
aims to partially shield some defense and veterans' programs
from the indiscriminate cuts by including two updated
military-related spending bills. It also will shift some funds
to security-related efforts such as border and embassy security,
prisons and FBI operations.
Senator Barbara Mikulski, the Democrat who chairs the Senate
Appropriations Committee, expressed frustration with the lack of
flexibility for domestic programs such as education in the
"It's only guns. We need butter," Mikulski told reporters.
The White House also said it was concerned that domestic
agencies would be forced to operate under older, more
restrictive spending. In a statement, it said it would work with
Congress to "refine the legislation" and would keep pressing
lawmakers for a replacement to the automatic sequester cuts.
Next week, Senate Democrats will move their version of the
bill for a vote and are likely to add funding flexibility for
some domestic programs, party aides said.
Both the House and Senate versions are expected to cap
discretionary spending at $1.043 trillion for the full 2013
fiscal year, but this would be reduced to around $982 billion if
the sequester cuts remain in place.
PICKING THEIR BATTLES
Over the past couple of years, these short-term government
funding bills, called "continuing resolutions," have been used
as leverage by Republicans to try to lower spending. Amid
Democratic resistance to some of the deeper spending cuts sought
by Republicans, there were fears that negotiations would break
down, forcing widespread shuttering of government agencies.
With House Republican conservatives feeling more confident
now that they have locked in the $85 billion in new savings for
the next seven months, the appetite for yet another showdown
seems to have waned.
"What remains to be seen is whether this move ... apparently
away from a crisis, is truly a shift in strategy for
Republicans, or just a short break from extremism that they've
had over the last few years," Reid said.
Once the funding bill for the remainder of this fiscal year
is enacted, Congress promptly will turn to its next fiscal
battle: a budget blueprint for the next fiscal year that begins
on Oct. 1.
Republican House Budget Committee Chairman Paul Ryan next
week is expected to release an ambitious budget blueprint that
aims to achieve balance in 10 years. But to achieve this, he may
have to row back on at least one promise he made last year as
the Republican vice presidential candidate - that any cuts to
the Medicare health program will not affect anyone 55 or under.
He has floated a plan to push the age threshold up to 56 to
reap additional savings from the program.
And sometime this summer, Congress and President Barack
Obama will be engaged in yet another fight over the need to
raise the U.S. Treasury Department borrowing limit.
It is unclear whether either of these measures will bring
Democrats and Republicans together on a long-term