Government Shutdown Averted

With a two week spending measure, Democrats and Republicans averted a shutdown but there are more budget battles ahead.

Democrats and Republicans in Congress averted a government shutdown this week by enacting a temporary spending measure to fund the federal government for another two weeks. With just $4 billion in cuts agreed to so far, it will be difficult for the opposition to extract the massive austerity measures they have promised voters during the last election however.

Conservatives in the House of Representatives voted to cut $61 billion from this year’s budget — a measure that was readily rejected by the Democratic majority in the Senate. To overcome gridlock and prevent the government from having to shut down, the parties compromised on a short-term extension that included $4 billion in cuts.

Although senior Democrats have lambasted Republicans’ spending plans as reckless, noting that they could cost many thousands of public-sector jobs and imperil the still fragile economic recovery, the $4 billion in cuts were largely taken out of President Barack Obama’s budget proposals for 2012.

House speaker John Boehner had earlier declared the president’s latest budget dead because it required a record $1.6 trillion in deficit spending. Since winning a majority in the congressional elections of November, Republicans have attempted to trim many billions from the 2011 budget which funds the government until September of this year.

Even $61 billion in cuts would leave the government with a $1 trillion shortfall for the current fiscal year.

Some Tea Party activists were disappointed that Republicans hadn’t cut deeper yet. The founder of Tea Party Nation called Speaker Boehner a “fool” for hailing the temporary spending measure as a victory and suggested that fiscal conservatives field a candidate against him during the Republican primary in Boehner’s home state of Ohio in 2012.

The White House has proposed budget talks between congressional leaders of both parties to avert the possibility of a shutdown once the temporary spending measure expires. As of Thursday, Republicans had not agreed to negotiations yet. “It’s time for them to outline for us what’s their position to keep the government funded,” said Speaker Boehner. “We’ve done our work.”

Democrats reiterated their offer to freeze domestic spending levels but that was unacceptable to House budget committee chairman Paul Ryan. He told CBS’ Face the Nation two weeks ago that Republicans were “not looking at rubber stamping these really high elevated spending levels that Congress blew through the joint two years ago.”

Discretionary spending for fiscal year 2010, when Barack Obama submitted his first budget, was up 13 percent compared to 2009, which was up 5 percent compared to 2008.

If talks do get underway at the White House, the scope of negotiations could well broaden beyond the current fiscal year. Congress is approaching a controversial vote to raise the nation’s legal debt limit while neither party has yet volunteered concrete entitlement reforms. Pensions and health-care support programs account for a third of federal spending and their costs are expected to skyrocket in the years ahead.