President Barack Obama said he hopes lawmakers can reach a last-minute deal today to avert a government shutdown after a third round of talks with congressional leaders last night failed to end an impasse over the federal budget.
After meeting with House Speaker John Boehner and Senate Majority Leader Harry Reid, Obama said issues remained unresolved and he hoped for a breakthrough that would prevent 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.
Without an agreement, 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.
‘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.”
Concern that an impasse over the federal budget may lead to a 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.
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.
‘Policy Questions’
“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.
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 continue to deliver the mail, military operations in Afghanistan, Iraq and Libya will continue and the air traffic control system will continue to 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.
Getting Their Paychecks
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.”
To contact the reporters on this story: Brian Faler in Washington at bfaler@bloomberg.net; Julianna Goldman in Washington at jgoldman6@bloomberg.net
