2011年4月8日星期五

Abortion, gap U.S. leaders try to prevent the closure of the expenditure

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April 08, 2011, 9:29 AM EDT By Brian Faler and Julianna Goldman

(See EXT6 for more on the U.S. budget.)

April 8 (Bloomberg) -- With hours to go before a threatened U.S. government shutdown, Republican and Democratic leaders remained deadlocked over federal support for Planned Parenthood and other spending as they narrowed their differences over the size of proposed budget cuts.

President Barack Obama called on lawmakers to reach a last- minute deal to avert a government shutdown today. Democratic officials said a dispute over financing for Planned Parenthood, which provides abortions among other services, was preventing an agreement over more than $30 billion in overall spending cuts.

The two sides had agreed on everything but a $300 million cut for Planned Parenthood that House Republicans want included in a budget resolution to carry the government through the rest of the 2011 fiscal year, one Democratic official said today. Republicans said larger spending issues remained as an obstacle to agreement. Another person familiar with the negotiations said the issues agreed upon were less clear than last night.

“The only thing left undone when we left last night was women’s health,” Senate Majority Leader Harry Reid, of Nevada, told reporters at the Capitol today. “We agreed on spending cuts and they’re still not happy.”

Senator Charles Schumer, a New York Democrat, said in an appearance on Bloomberg Television that Republicans and Democrats have narrowed their differences on the size of proposed budget cuts but remain deadlocked over Republican demands on the issue of abortion rights.

“As long as they insist” on what Schumer described as “ideological riders,” he predicted “the government will shut down.”

Michael Steel, a spokesman for House Speaker John Boehner, said today: “While nothing will be decided until everything is decided, the largest issue is still spending cuts.”

After meeting with Boehner and Reid at the White House last night, Obama said he hoped that talks over narrowing differences would lead to a breakthrough preventing a shutdown set to begin at midnight tonight.

“I’m not yet prepared to express wild optimism but I think we are further along,” he told reporters. “My hope is, is that I’ll be able to announce to the American people sometime relatively early in the day that a shutdown has been averted.”

The president canceled a scheduled trip to Indianapolis, where he was to promote his energy policies. He had met with Reid and Boehner earlier yesterday and late on April 6 in an effort to reach an accord.

Shutdown Threatened

Without an agreement on a federal budget to run through the 2011 fiscal year, the government would begin shutting down for the first time in 15 years. Roughly 800,000 “non-essential” federal employees would be furloughed, affecting a host of government services. National parks would close, those filing paper tax returns wouldn’t receive refunds, government permits would be unavailable, and most passport applications would go unprocessed.

Senator Bob Corker, a Tennessee Republican, said he’s confident that differences are “going to get resolved” in time. There’s “no way” the government won’t be open “when the sun comes up Monday,” Corker said on CNBC today. “This whole issue, over the short-term continuing resolution, is last year’s war. “It’s time for us to move on to the trillions of dollars we’ve got to deal with.”

Dow Slips

Concern over a possible shutdown helped push down stocks yesterday. The Dow Jones Industrial Average slipped 17.26 points, or 0.1 percent, to 12,409.49 at 4 p.m. in New York and the Standard & Poor’s 500 Index dropped 0.2 percent. Futures on the S&P 500 index rose 0.4 percent at 10:30 a.m. in London, indicating the benchmark index will rebound today.

Bond yields in the U.S. are lower now than when the government was running a budget surplus a decade ago even though Treasury Department data show that the amount of marketable debt outstanding has risen to $9.13 trillion from $4.34 trillion in mid-2007.

Treasuries fell today, sending the yield on the 10-year note five basis points higher to 3.60 percent. That’s below the average of 7 percent since 1980 and compares with an average of 5.48 percent in the 1998 through 2001 period, according to Bloomberg Bond Trader prices.

‘Extremely Narrow’

Neither Obama nor Reid identified the outstanding issues. Reid said they were “extremely, extremely narrow,” yet “the sad part about it, we keep never quite getting to the finish line.” He said he is “not really confident” that a deal will be reached, though “I’m very, very hopeful.”

Boehner said in a statement with Reid that they had “narrowed the issues” and would “continue to work through the night to attempt to resolve our remaining differences.”

Senator Dick Durbin of Illinois, the chamber’s second- ranking Democrat, said yesterday that lawmakers are divided by provisions, known as policy riders, woven into a bill funding the government for the rest of this year. They would change administration policies on environmental regulations as well as funding for Planned Parenthood, which provides abortions among other health services.

“It appears that the debate is no longer over deficit reduction,” Durbin said. “It has really devolved into a debate over policy questions that have nothing to do directly, maybe even indirectly, with the budget deficit that we face or the money we’re going to spend.”

Lawmakers had also been debating about $40 billion in cuts from the government’s $3.7 trillion annual budget.

Veto Threat

Yesterday, the administration threatened to veto a House- approved measure that would keep the government open for business until April 15, cut $12 billion in spending and fund the Pentagon through Sept. 30, the end of the 2011 fiscal year. The administration called the measure a “distraction from the real work” of forging a compromise.

“Non-essential” federal workers face the prospect of going without pay during the impasse. Representative Jim Moran, a Virginia Democrat, is advising federal workers living in his district just outside Washington to conserve cash, warning a shutdown could stretch into next week. With so much concern over the budget deficit, he said, lawmakers may not agree to provide federal workers with back pay as they have in the past.

‘Conserve Their Money’

“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,” Moran said. He estimated that 100,000 workers in the Washington area may be furloughed.

Many government programs would continue during a shutdown, said Jeff Zients, deputy director of the White House budget office.

Social Security checks will continue to flow, the postal service will deliver the mail, military operations in Afghanistan, Iraq and Libya will go on and the air traffic control system will operate, Zients said.

“Generally speaking, services that are critical to safety of life and protection of property are excepted from a shutdown,” he told reporters. So too, he said, are programs that don’t rely on the budget bill being debated for their funding.

Elected officials, including Obama, Boehner and Reid, would be paid as usual during a shutdown unless Congress changes the law. Democratic Senators Ben Nelson of Nebraska, Sherrod Brown of Ohio and Joe Manchin of West Virginia all announced they would forgo their paychecks during a shutdown.

Soldiers, law enforcement officials and others whose jobs are deemed essential would continue to work, yet wouldn’t get paychecks until the budget impasse is resolved.

Obama said the dispute “could severely hamper the recovery and job growth.”

“We’ve been working very hard over the last two years to get this economy back on its feet,” he said. “For us to go backwards because Washington couldn’t get its act together is unacceptable.”

--With assistance from Nicholas Johnston in Washington. Editors: Leslie Hoffecker, Laurie Asseo.

To contact the reporters on this story: Brian Faler in Washington at bfaler@bloomberg.net; Julianna Goldman in Washington at jgoldman6@bloomberg.net

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


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