Obama Meets Again With Reid, Boehner to End Budget Fight

President Barack Obama and the top two leaders in Congress met again tonight at the White House in an effort to end a stalemate over the federal budget that threatens a U.S. government shutdown.

Senate Majority Leader Harry Reid said this afternoon “I’m not very optimistic” about the prospects for a last-minute deal which lawmakers said has been stymied by disputes over abortion and environmental regulations, as well as how much to cut in spending.

“We’re not there yet,” House Speaker John Boehner, an Ohio Republican, said after meeting earlier today with Obama and Reid. Obama also met last night with the two lawmakers.

Without an agreement or temporary spending extension by the end of the day tomorrow, when current spending authority expires, all non-essential government services would close.

Senator Dick Durbin of Illinois, the chamber’s second- ranking Democrat, said shortly before tonight’s meeting that much of the dispute has focused on policy provisions Republicans want in a budget bill that would bar funding for Planned Parenthood, which provides abortions.

“We think still we can reach an agreement on the money,” said Durbin. “It’s hard to believe that they’re going to shut down the government because they can’t get a vote on family planning and Planned Parenthood. Honest to goodness, was that what the last election was about?”

Boehner’s View

Boehner said both sides had moved a bit farther apart in talks today. He said differences over the level of spending cuts remain, as well as clashes over the so-called policy riders.

“There are far more than the one provision that is holding up any agreement, I can tell you that,” the speaker told reporters before the afternoon meeting at the White House.

Obama today threatened to veto a temporary funding measure that House Republicans passed, 247-181. It would keep the government operating through April 15, impose $12 billion in budget cuts and fund the Pentagon for the remainder of the fiscal year, which ends Sept. 30.

While Boehner said there is “no responsible reason” for Democrats to oppose it, Reid said the bill is a “nonstarter” in the Senate. His objections include a policy directive in the bill that would limit abortion funding in the District of Columbia.

The talks aim to forestall the first government shutdown since another Democratic president -- Bill Clinton -- clashed 15 years ago with congressional Republicans who also were attempting to scale back government spending.

$40 Billion

Boehner is seeking cuts of $40 billion from current spending, which is $7 billion higher than the $33 billion plan lawmakers had been working to assemble. While he has said he wants cut to come from programs that get funding through the annual appropriations process, Reid wants some cuts through programs such as Pell Grants and transportation programs that have mandated funding levels that extend over several years. That would shield many domestic programs from deeper cuts.

The Obama administration said it is preparing for a partial shutdown of government operations if Congress doesn’t act. That would suspend Internal Revenue Service audits and federal small- business loan processing, as well as government guarantees of some mortgages.

Military, law enforcement, homeland security and other personnel deemed essential would remain on duty, though their paychecks would be delayed until the government reopens. Government programs that have an effect on the economy would be among the operations hit, including a suspension of loan guarantees by the Federal Housing Administration.

No Pay

About 800,000 “non-essential” federal workers face the prospect of getting no pay for time lost to the political impasse. While they’ve ultimately received back pay after previous shutdowns, it’s up to Congress to “determine whether ‘non-excepted’ employees receive pay for the furlough period,” according to a U.S. Office of Personnel Management website providing guidance and information on furloughs.

Elected officials, including Obama, Boehner and Reid, would be paid as usual during a shutdown unless Congress changes the law. Soldiers, law enforcement officers and other government employees whose jobs are deemed essential would continue to work, yet wouldn’t get paychecks until the budget standoff is resolved.

‘Real Effects’

“A shutdown could have real effects on everyday Americans,” Obama said last night at the White House after his meeting with Boehner and Reid. “It means that hundreds of thousands of workers across the country suddenly are without a paycheck. Their families are counting on them being able to go to work and do a good job.”

Democratic Senators Joe Manchin of West Virginia and Ben Nelson of Nebraska have said they would forgo paychecks during the impasse.

Representative Jim Moran, a Virginia Democrat whose district lies just outside Washington, said he planned to conduct a town hall meeting tonight to advise constituents who are federal workers on how to prepare for a shutdown. He urged them to conserve cash, warning a shutdown could stretch into next week and, with so much concern over the deficit, lawmakers may not agree to provide federal workers with back pay.

“They’re going to have to conserve their money to make their mortgage and car payments -- they’re going to have to determine what are the essentials,” he said. He estimated 100,000 workers in the Washington area could be furloughed.

In a memorandum to senior staff, the Senate’s chief employment lawyer said non-essential aides who are furloughed could face criminal penalties of up to $5,000 or two years in prison if they work during a shutdown. Blackberries and laptops might have to be confiscated to make sure that doesn’t happen, said the memo, which also suggested that committees set up a phone tree or other off-line means of notifying staffers when they could come back to work.

To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net; Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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