Congress eyes deal to avoid govt shutdown

WASHINGTON (AFP) – The US Congress faces a looming deadline this week to reach agreement on spending to avoid a federal government shutdown that could have chilling consequences for the US economy.

The current stopgap spending measure — known as a “continuing resolution” or “CR” — is valid through midnight Friday, and polarized lawmakers in the Senate and House of Representatives must agree on a compromise to replace it in order to keep funding the federal government.

All sides have said that they want to avoid a shutdown but a compromise has so far eluded members of Congress and both parties have been preemptively blaming each other.

A week ago, newly empowered Republicans voted to cut about $61 billion in government spending.

But Democrats in Congress and President Barack Obama’s administration, while also vowing cuts, immediately criticized the plan as dangerous in a slow economy.

On Friday, Republican House leaders unveiled a two-week stopgap spending measure that would cut $4 billion dollars by reducing or scrapping programs and urged Senate Democrats to support it. Democrats appeared satisfied with the move.

“For the sake of our people and our economy, we cannot allow gridlock to prevail,” Obama said in his weekly address as he urged both sides to reach a compromise.

He noted that both Democratic and Republican leaders in the House and Senate have said they believed it was important to keep the government running while they worked on a plan to reduce the budget deficit.

Obama called for a “balanced approach to deficit reduction,” arguing that “we can’t sacrifice our future.”

The consequences of a shutdown could be many: hundreds of thousands of furloughed federal workers, frozen social services and millions of tourists turned back at museum entrances.

Only the federal government’s essential services, such as those linked to security, would continue to function as usual.

“We have a moral responsibility to address the problems we face. That means working together to cut spending and rein in government — NOT shutting it down,” House Speaker John Boehner said, according to excerpts of a speech he was due to deliver later before the National Religious Broadcasters association.

He said that the ballooning US public deficit exceeds $14.1 trillion, in what he called a “mortal threat” to the country.

The last time a similar game of budget brinksmanship played out between Republicans and Democrats, in late 1995 and early 1996, the government closed for 21 days.

Then president Bill Clinton, whose party had been routed in mid-term elections just as Obama’s was, turned the crisis against the Republicans, successfully portraying them as irresponsible ideologues.

The shutdown turned public sentiment against the Republicans and helped Clinton get re-elected in November 1996.

Both sides are keenly aware of that history — and its implications for the 2012 elections — as they maneuver for advantage in the current showdown.

Senate Democrats have taken note of the fact that the Republicans’ latest spending proposal has been shorn of some of the draconian measures contained in a bill that passed the House of Representative.

Republican Senate Minority Leader Mitch McConnell, for his part, said the new proposal provides “a clear path” to resolve differences before Friday’s deadline.

Beyond any short-term agreement, both camps will need to clinch a deal to fund the federal government until the end of the fiscal year on September 30.

Democrats have been working on a proposal where they would agree to budget cuts starting this year, for the last seven months of the fiscal year.