Congress has time to work out spending deal

Congress has nearly a full work week to reach a deal on a continuing resolution and avert a government shutdown.

Odds of a shutdown are long, because both House and Senate leaders fear the consequences. Talks, and the chance for compromise, will ramp up late in the week.

But any game of chicken is dangerous, especially if both drivers think the other will swerve. So far, none of the key players have given up the negotiating leverage of the shutdown prospect.

House Republican freshmen continue to clamor for deep cuts. Democrats, particularly Senate Democratic Policy and Communications Chairman Chuck Schumer, D-N.Y., contend that the GOP has more to lose in a shutdown.

This all leaves a failure to cut a deal on a short-term CR by Friday a real, if remote, possibility.

House Republicans hope by mid-week to pass a two-week continuing resolution that contains about $4 billion in cuts. Prorated, that figure represents the same level of reduction as the approximately $60 billion in cuts in the seven-month CR the House passed last week. But the programs targeted are different.

In a bid to make the two-week measure attractive to at least some Democrats, the GOP bill would immediately implement many budget cuts proposed by President Obama for next year.

The two-week measure that House Republican leaders unveiled on Friday would fund the government through March 18 and cuts $4 billion from current discretionary spending, including $1.2 billion from eight terminated programs and $2.7 billion from earmarks.

House leaders are expected to put the bill on the House floor on Tuesday. House Majority Leader Eric Cantor, R-Va., and other Republicans said they hoped Senate Democratic leaders pass their measure.

Of the eight programs, four were education programs, including $250 million from the "striving readers program."

Funding for the LEAP program was also terminated, another Obama request.

Also on the chopping block is $650 million for the Federal Highway Administration.

The CR also eliminates more than 50 earmarks; among them a $77 million request for the Energy Department's Office of Science, $103 million for FEMA university and emergency operations center grants, and $129 million for higher education funding.

In an indication of growing odds of an agreement, Senate Democrats on Friday welcomed the GOP proposal as an encouraging concession.

"The plan Republicans are floating today sounds like a modified version of what Democrats were talking about," Jon Summers, a spokesman for Senate Majority Leader Harry Reid, D-Nev., said on Friday.

Summers, however, indicated Democrats are not ready to accept the two-week GOP proposal.

The Senate will begin consideration this week on a bill to overhaul the U.S. patent system, and could begin voting on amendments. They will likely put that bill aside before passage to take up some sort of CR.

Reid will need a House-passed vehicle to move a CR he wants. He could bring up either the long-term or short House CR and replace its content with a substitute amendment that contains his bill.

Reid announced plans last week to bring up a 30-day CR that freezes spending at current levels. Senate leadership aides have also raised the possibility of an effort to move a seven-month CR that will cut spending below current levels.

Senate leadership and Appropriations Committee aides were working to finalize that bill last week.

Leadership aides said last week it was not yet clear what vehicle Reid will use, or which CR he will seek to attach. Senate Minority Leader Mitch McConnell, R-Ky., will seek a vote on an amendment that contains the two-week House CR.

In a statement on Friday, McConnell said the two-week House CR and Democrats' willingness to embrace cuts below current spending levels offer "a clear path to finishing this short-term measure before the March 4th deadline."

Republicans are working to ramp up pressure on moderate Democrats who are up for reelection in 2012 to support the House CR. Republicans are aiming particularly at Sens. Ben Nelson of Nebraska, Claire McCaskill of Missouri, Joe Manchin of West Virginia, and Jon Tester of Montana.

"By supporting the House bill, our friends on the other side of the aisle will have the chance to ensure that the government remains operational while we work with them to identify additional ways to shrink Washington spending this year," McConnell said.

The Democratic senators in question have not indicated their positions on that bill. Nelson "doesn't know all the range of options that the Senate will be voting on," and will evaluate the various proposals early this week, spokesman Jake Thompson said. A McCaskill spokeswoman said the senator will review the plans when she returns to Washington.

The outcome of a vote on the Republicans' CR might depend in part on the threshold for passage. A 60-vote threshold, which is probable, would give Democrats good odds of prevailing while allowing a few Democrats to defect.

Overall, however, House Republicans hold the upper hand over Senate Democrats in this week's stare-down. Republicans can easily pass their two-week CR in the House, while it appears unlikely that Reid has the time or votes to pass his 30-day CR in the Senate in the face of even minor GOP opposition.

That means that as the prospect of a shutdown mounts, Republicans, can use passage of their own short-term bill to put the onus on Senate Democrats.

"Think about how much egg they'd have on their [faces] if they're responsible for a government shutdown," a GOP leadership aide said.

It is also unclear if House Speaker Rep. John Boehner, R-Ohio, can sell his conference and 87 GOP freshmen in particular on a short-term CR that cuts less than the $4 billion he has proposed. Democratic aides say that in staff-level talks, GOP leadership aides have told Senate Democratic staffers that conservatives will reject any compromise spending bill that contains a higher spending level than that of the House-passed CR.

Some rank-and-file Republicans are backing that up. Rep. Trent Franks, R-Ariz., whose 2010 National Journal voting record was tied as the most conservative in the House, said he and many of his colleagues are ready to do "what we've got to do" to cut spending, even if a shutdown is "what it takes to do that."

"I truly do not want a government shutdown," Franks said. But he said he and many of his colleagues believe they have compromised enough.

"There are a number of us that think you have to draw a line in the sand," he said.

Such stands allow Boehner to argue he has little room to bargain.

Senate Democrats are left in a pickle. They may have to choose between giving Boehner his way on the two-week CR and a shutdown. Caving, more or less, looks increasingly likely as Reid, in a series of announcements over the last few weeks, has inched from pushing a spending freeze to accepting cuts.

But accepting the House Republicans' preferred level of spending will form the basis of further discussions, further weakening Senate Democrats' hand.

Reid could move his own preferred measure by "filling the tree" and blocking GOP amendments on a CR proposal. But that move would be tough just weeks after Reid reached an informal deal with McConnell to refrain from that step in exchange for McConnell agreeing to limit filibusters of motions to take up bills. When they reached the deal, Reid left himself the option of filling the tree on particularly significant bills.

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