Automatic cuts are latest shutdown hurdle - Omaha.com
Published Monday, October 14, 2013 at 12:30 am / Updated at 8:23 am
Markets' reaction awaited
Automatic cuts are latest shutdown hurdle

WASHINGTON (AP) — Senate Republicans and Democrats hit an impasse Sunday over spending in their last-ditch struggle to avoid a default and end a partial government shutdown that's entering its third week.

After inconclusive talks between President Barack Obama and House Republicans, Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., took charge in trying to end the crises, although a conversation Sunday afternoon failed to break the stalemate.

“I'm optimistic about the prospects for a positive conclusion to the issues before this country today,” Reid said as the Senate wrapped up a rare Sunday session.

The two negotiators are at odds over Democratic demands to undo or change the automatic, across-the-board spending cuts to domestic and defense programs that the GOP sees as crucial to reducing the nation's deficit.

McConnell insisted that a solution was readily available in the proposal from a bipartisan group of 12 senators, led by Sens. Susan Collins, R-Maine, and Joe Manchin, D-W.Va., that would reopen the government and fund it at current levels for six months while raising the debt limit through Jan. 31.

“It's time for Democrat leaders to take 'yes' for an answer,” McConnell said in a statement.

But six Democrats and a spokesman for Collins said that although negotiations continued this weekend, there was no agreement.

The latest snag comes as 350,000 federal workers remained idle, hundreds of thousands more worked without pay and an array of government services were on hold on the 13th day of the shutdown.

Many parks and monuments remain closed, drawing a protest at the National World War II Memorial on Sunday that included Tea Party-backed lawmakers who had unsuccessfully demanded defunding of President Barack Obama's health care law in exchange for keeping the government open.

Unnerving to world economies is the prospect of the United States defaulting on its financial obligations Thursday if Congress fails to raise the borrowing authority above the $16.7 trillion debt limit.

Christine Lagarde, the International Monetary Fund's managing director, spoke fearfully about the disruption and uncertainty, warning of a “risk of tipping, yet again, into recession” after the fitful recovery from 2008. The reaction of world financial markets and Wall Street today will influence any congressional talks.

Congress is racing the clock to get a deal done, faced with time-consuming Senate procedures that could slow legislation, likely opposition from Tea Partyers and certain resistance in the Republican-led House before a bill gets to Obama.

Politically, Republicans are reeling, bearing a substantial amount of the blame for the government shutdown and stalemate.

“We're in a free-fall as Republicans, but Democrats are not far behind,” said Sen. Lindsey Graham, R-S.C., in warning Democrats about seizing on the GOP's bruised brand as leverage to extract more concessions.

McConnell and Republicans want to continue current spending at $986.7 billion and leave untouched the new round of cuts in January, commonly known as sequester, that would reduce the amount to $967 billion. Democrats want to figure out a way to undo the reductions, plus a long-term extension of the debt limit increase and a short-term spending bill to reopen the government.

“Republicans want to do it with entitlement cuts,” said Sen. Chuck Schumer, D-N.Y. “Democrats want to do it with a mix of mandatory cuts, some entitlements and revenues. And so how do you overcome that dilemma? We're not going to overcome it in the next day or two.”

He suggested keeping the government running through mid-January.

Sen. Dick Durbin of Illinois, the No. 2 Democrat in the Senate, told reporters that the two sides are roughly $70 billion apart, the difference between the $1.058 trillion Senate budget amount and the $988 billion envisioned by House Budget Committee Chairman Paul Ryan, R-Wis.

“We haven't picked a number, but clearly we need to negotiate between those two,” Durbin said.


How the partial shutdown has affected government services


TRAVEL: Federal air traffic controllers remain on the job. Furloughs of safety inspectors had put inspections of planes, pilots and aircraft repair stations on hold, but the Federal Aviation Administration says it asked 800 employees to return to work.

EDUCATION: Student loans have continued to be paid out.

BENEFIT PAYMENTS: Social Security and Medicare benefits continue to be paid out, but there could be delays in processing new disability applications.

FEDERAL COURTS: Courts, which have been using fees and other funds to operate since the shutdown began, will probably have enough money to operate until Thursday.

RECREATION: National parks closed when the shutdown began, but the White House said it would allow states to use their own money to reopen. Tourists returned Saturday to the Grand Canyon in Arizona. The Statue of Liberty reopened Sunday.

CONSUMER SAFETY: Routine food safety inspections were suspended. U.S. food inspections abroad have also been halted. Auto recalls and investigations of safety defects have also been put on hold.

HEALTH: The FDA has halted the review and approval of new medical products and drugs.

LABOR ISSUES: The Equal Employment Opportunity Commission will not investigate any charges of discrimination.

TAXES: The 12 million taxpayers who filed for automatic extensions in the spring have tax returns due Tuesday. The IRS suspended all audits and will not be processing any tax refunds. IRS call centers will not be staffed, though automated lines are still running.

MILITARY: The military's 1.4 million active-duty personnel remain on duty. The military has stopped providing tuition assistance for service members taking college courses during off-duty hours.

WEATHER: The National Weather Service is forecasting weather and issuing warnings while the National Hurricane Center continues to track storms. The scientific work of the U.S. Geological Survey has been halted.

HOUSING: Some borrowers are finding it harder to close on their mortgages. The delays could worsen if the shutdown continues. Furloughs at the Federal Housing Administration are slowing the agency's processing of loans for some low- to moderate-income borrowers and first-time homebuyers.

VETERANS SERVICES: Veterans are still able to get inpatient care at hospitals and mental health counseling at vet centers and outpatient clinics because Congress approved funding for VA health care programs one year in advance. Operators are also staffing the crisis hotline.

NATIONAL SECURITY: The CIA furloughed a “significant” but undisclosed number of workers when the shutdown began. A week later, CIA Director John Brennan said he would begin bringing back employees deemed necessary to the CIA's core missions.

Copyright 2013 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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