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Last-Minute Deal Averts Federal Shutdown—For Now

http://online.wsj.com/article/SB10001424052748704503104576250541381308346.html

›APRIL 9, 2011
By NAFTALI BENDAVID And JANET HOOK

After days of haggling and tense hours of brinksmanship, congressional leaders at the last gasp reached an agreement late Friday to avert a shutdown of the federal government.

According to a lawmaker in the meeting, Rep. Mike Rogers (R., Ala..), the deal Mr. Boehner presented called for $39 billion in cuts during the remaining six months of the fiscal year. Republicans had won an agreement to bar the District of Columbia from using locally raised Medicaid funds for abortion. Another Republican demand, that Planned Parenthood of America be stripped of federal funding, would be subject to a separate Senate vote.

Talks earlier in the day had centered on plans to cut $38 billion or more from federal spending for the rest of the fiscal year—a major retreat for Democrats, who started negotiations demanding no spending cuts. Democrats said they were resisting Republican demands for changes to a family-planning program for low-income women.

Under the agreement, Congress was to pass a short-term measure to fund the government for several days, giving House and Senate leaders breathing room to settle on final details of the longer-term funding plan. Legislation currently funding the government was to expire at midnight, leaving federal agencies without authority to spend money on all but essential services.

The late-night action capped a day of public bickering and private deal-making on Capitol Hill, while federal agencies laid plans to furlough an estimated 800,000 government workers, close national parks, passport offices and other operations, and suspend an array of federal services. Mail delivery, air-traffic control, border security and other vital services would continue, as would military operations.

The weeks-long period of partisan fighting over how deeply and where to cut federal spending is just a warm-up for bigger and more consequential battles.

Those include an expected fight over raising the federal debt ceiling in the next few months, and over GOP's proposed budget for the 2012 fiscal year, which includes cuts and policy proposals that dwarf the deal struck Friday in scope and size.

As the midnight deadline approached, congressional leaders largely halted their partisan attacks, signaling that progress was being made. Mr. Boehner called Mr. Obama at 6:30 p.m., apparently to provide an update.

The debate was the first big standoff in the new Washington power structure created by November's midterm election, in which Republicans seized control of the House on a surge of voter complaints about government spending.

One potential winner was Mr. Boehner, who parlayed his majority in the House, which was not always in tune with his thinking, into a series of cuts that a few months ago would have been hard to envision.

If House and Senate leaders strike a compromise on funding the government until Sept. 30, the immediate question will be how rank-and-file lawmakers react to the details. House conservatives have warned for weeks they would oppose any cuts they believe are insufficient, and Mr. Boehner has worked hard to keep them on board.

Democratic leaders would likely have to contend with the party's sizeable liberal faction, which could be furious that Messrs. Obama and Senate Leader Harry Reid (D., Nev.) agreed to such spending reductions. Many Democrats are also dissatisfied with Mr. Obama's decision to keep a relatively low profile during much of the debate, only to surface at the end and try to position himself as the adult in the room.

Immediate implications to a budget deal would be limited, since it would cover only the remaining six months of fiscal 2011 [i.e. the period until 9/30/11]. It covers only a tiny portion of the federal budget, which is dominated by spending on health-care and pension programs that are not funded by annual appropriations.

But the budget fight has set the stage for other, more sweeping battles, as the divided capital takes on the 2012 budget and steps to tame the nation's long-term deficits—and possibly spending on popular entitlement programs.

Messrs. Boehner, Obama and Reid will likely be subjected to the same pressures in those debates as in this one.

Mr. Boehner has been caught between a desire to show that Republicans can use their new House majority to govern effectively and a conservative contingent that discourages compromise.

Mr. Obama has sought to stay above the fray. And Democrats have given significant ground on spending while trying to tie the GOP to a tea party movement that Democrats continually describe as "extremist.''

Throughout Friday, Messrs. Reid and Boehner were simultaneously jockeying with each other to deflect blame for the budget impasse while reaching out to their partisan bases.

Mr. Reid said a final obstacle to the deal was Mr. Boehner's insistence on changing the Title X program, which provides family planning services to low-income women. Democrats said the GOP was pushing to turn Title X into a block grant to states, allowing conservative governors to gut the program because it would give them more discretion in how to use those funds.

Mr. Reid said Democrats had agreed to meet the Republicans more than halfway on spending cuts. "The number—we bent on that," he told reporters. "But we are not, we are not bending on women's health."

Mr. Boehner, by contrast, said differences over social provisions had largely been resolved and the final dispute was over spending levels. "There is only one reason that we do not have an agreement yet, and that reason is spending," Mr. Boehner said.

Democrats argue that block-granting Title X, which has an annual budget of $317 million, would cripple it and damage Planned Parenthood Federation of America, which receives about one-fourth of Title X money.

Planned Parenthood provides abortions but by law cannot use federal money for that procedure. Instead, Democrats say it uses Title X funds to provide such services as mammograms and cervical cancer screening to low-income women.

Still, many Republicans are upset at the notion of a major abortion provider, getting any federal money.

The Center for Responsive Politics reports that the Planned Parenthood political action committee donated $286,986 to federal candidates in the 2010 election cycle, 99% of it to Democrats.

As the hours ticked by on Friday, Mr. Boehner addressed a closed-door meeting of House Republicans, telling them negotiations were still under way and that he hoped a deal could be reached.

"We're not the dominant the party here in Washington," Mr. Boehner said, a suggestion that Republicans could not get everything they wanted in a deal.

But "I'm not going to get rolled," said Mr. Boehner, whose members applauded him.‹