After Historic Deal, Battles Loom Over Debt Ceiling, 2012 Budget - Fox News

A series of spending battles await Congress following the expected passage of the 2011 budget bill next week, as Democrats and Republicans will continue clashing over the nation's fiscal responsibilities moving forward.

With a last-minute budget deal, Congress averted a federal government shutdown Friday night.

On Saturday, President Obama signed a short term spending deal that will allow the government to pay for federal operations through Friday.

The measure was needed to keep the government open long enough for Congress to sign off on the budget deal reached just before the midnight deadline Friday by Obama, Republican House Speaker John Boehner and Democratic Senate Majority Leader Harry Reid.

Obama made an unannounced trip from the White House to the Lincoln Memorial on Saturday to make clear that the country's national parks and monuments are open for business. The sites would have been closed in a government shutdown.

"Because Congress was able to settle its differences, that's why this place is open today and everybody's able to enjoy their visit," Obama told tourists on the steps of the memorial.

The Friday deal included $38.5 billion in spending cuts while leaving the more contentious policy matters, such as blocking funding for Planned Parenthood, for a later debate.

But the epic clash between Democrats and Republicans was just the first of a series of fiscal fights as two more battles loom on the horizon -- the national debt ceiling and then the 2012 budget.

"We're gonna have a fight in a couple of months over the debt ceiling. We're gonna have a fight over the 2012 budget," Rep. Adam Kinzinger, R-Ill, told Fox News Saturday. "This is not basically the last fight here. This is the first opening salvo in a real attempt to bring back the size of government and start living within our means."

The Treasury Department has told Congress it will hit its $14.3 trillion borrowing limit no later than mid-May and Republicans hope to use the issue to force President Obama to accept long-term deficit-reduction measures.

"The president's asked us to raise the debt ceiling and Senate Republicans and House Republicans, and I hope many Democrats as well, are going to say, Mr. President, in order to raise the debt ceiling, we need to do something significant about the debt," Senate Republican Leader Mitch McConnell said on the Senate floor Friday night.

The White House has warned that not lifting the debt ceiling could lead to a default on the national debt and harm the economy, which appears to be picking up steam. If there is a stalemate, the Treasury could avoid defaulting for several weeks by using a number of tricks but it would eventually run out of options.

Lifting the debt ceiling is never easy and in this political environment, where Tea Party activists are pressuring Republican leaders to slash federal spending, a rough fight is all but guaranteed.

The fight over the 2012 budget won't be a picnic either. The budget deal that Republicans and Democrats negotiated Friday night is for 2011 and funds the government through the end of September with $38.5 billion in spending cuts. 

But House Republicans intend to pass a 2012 budget next week that would cut $6.2 trillion in spending over the next decade calls for sweeping changes in the Medicare and Medicaid health programs.

Democrats have already called House Budget Committee Chairman Paul Ryan's plan an attack on the elderly and the poor.

But in the Republican radio address, Ryan warned of a coming crisis.

"Unless we act soon, government spending on health and retirement programs will crowd out spending on everything else, including national security. It will literally take every cent of every federal tax dollar just to pay for these programs," Ryan said Saturday.

House Speaker John Boehner has said that the fight over the 2011 budget is likely to repeat itself in the next coming months.

"It's taken us some time to get acquainted with each other and to work our way through this, because understand that this process that we're in is likely to be repeated a number of times this year," Boehner said.

The Associated Press contributed to this report.

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After Historic Deal, Battles Loom Over Debt Ceiling, 2012 Budget - Fox News

A series of spending battles await Congress following the expected passage of the 2011 budget bill next week, as Democrats and Republicans will continue clashing over the nation's fiscal responsibilities moving forward.

With a last-minute budget deal, Congress averted a federal government shutdown Friday night.

On Saturday, President Obama signed a short term spending deal that will allow the government to pay for federal operations through Friday.

The measure was needed to keep the government open long enough for Congress to sign off on the budget deal reached just before the midnight deadline Friday by Obama, Republican House Speaker John Boehner and Democratic Senate Majority Leader Harry Reid.

Obama made an unannounced trip from the White House to the Lincoln Memorial on Saturday to make clear that the country's national parks and monuments are open for business. The sites would have been closed in a government shutdown.

"Because Congress was able to settle its differences, that's why this place is open today and everybody's able to enjoy their visit," Obama told tourists on the steps of the memorial.

The Friday deal included $38.5 billion in spending cuts while leaving the more contentious policy matters, such as blocking funding for Planned Parenthood, for a later debate.

But the epic clash between Democrats and Republicans was just the first of a series of fiscal fights as two more battles loom on the horizon -- the national debt ceiling and then the 2012 budget.

"We're gonna have a fight in a couple of months over the debt ceiling. We're gonna have a fight over the 2012 budget," Rep. Adam Kinzinger, R-Ill, told Fox News Saturday. "This is not basically the last fight here. This is the first opening salvo in a real attempt to bring back the size of government and start living within our means."

The Treasury Department has told Congress it will hit its $14.3 trillion borrowing limit no later than mid-May and Republicans hope to use the issue to force President Obama to accept long-term deficit-reduction measures.

"The president's asked us to raise the debt ceiling and Senate Republicans and House Republicans, and I hope many Democrats as well, are going to say, Mr. President, in order to raise the debt ceiling, we need to do something significant about the debt," Senate Republican Leader Mitch McConnell said on the Senate floor Friday night.

The White House has warned that not lifting the debt ceiling could lead to a default on the national debt and harm the economy, which appears to be picking up steam. If there is a stalemate, the Treasury could avoid defaulting for several weeks by using a number of tricks but it would eventually run out of options.

Lifting the debt ceiling is never easy and in this political environment, where Tea Party activists are pressuring Republican leaders to slash federal spending, a rough fight is all but guaranteed.

The fight over the 2012 budget won't be a picnic either. The budget deal that Republicans and Democrats negotiated Friday night is for 2011 and funds the government through the end of September with $38.5 billion in spending cuts. 

But House Republicans intend to pass a 2012 budget next week that would cut $6.2 trillion in spending over the next decade calls for sweeping changes in the Medicare and Medicaid health programs.

Democrats have already called House Budget Committee Chairman Paul Ryan's plan an attack on the elderly and the poor.

But in the Republican radio address, Ryan warned of a coming crisis.

"Unless we act soon, government spending on health and retirement programs will crowd out spending on everything else, including national security. It will literally take every cent of every federal tax dollar just to pay for these programs," Ryan said Saturday.

House Speaker John Boehner has said that the fight over the 2011 budget is likely to repeat itself in the next coming months.

"It's taken us some time to get acquainted with each other and to work our way through this, because understand that this process that we're in is likely to be repeated a number of times this year," Boehner said.

The Associated Press contributed to this report.

View the original article here

Tense Meetings, Stalled Talks Led to 'Painful' Budget Deal - San Francisco Chronicle

April 10 (Bloomberg) -- President Barack Obama had finally reached his breaking point.

For more than an hour in an Oval Office meeting on April 7, House Speaker John Boehner had insisted that any compromise on the government's budget include a prohibition on federal funding for Planned Parenthood.

Obama already had reluctantly agreed to a provision banning the District of Columbia from spending funds on abortion services -- and that was as far as he would go.

"Nope, zero," he told Boehner, according to a senior Democratic aide. "John, this is it." The room went silent.

The tense negotiations culminating in a last-minute deal the next night to avert a government shutdown underscored the challenges facing both Boehner and Obama as they tackle the fiscal issues that will dominate the debate during the next two years in Washington.

Looming battles to raise the $14.3 trillion debt ceiling and craft next year's budget will help shape the country's economic future and define the 2012 presidential race. The fight to fund the government through the Sept. 30 close of the fiscal year resulted in what Obama said were some "painful" spending cuts. Yet it was only the initial test of how both leaders will navigate the dangers of divided government.

'A Good Exercise'

"It's the first time we all worked under these new parameters we are in, so we've had to learn each other," said House Appropriations Committee Chairman Hal Rogers, a Kentucky Republican, who participated in the talks. "It was a good exercise in that respect because we will know next time -- and there will be many times -- we will know next time more how to handle these kinds of things."

The deal averted the furlough of 800,000 federal employees, the closure of federal facilities such as national parks and the Smithsonian Institution in Washington and a delay in processing tax returns.

While officials warned of economic consequences from a shutdown, financial markets have shown little concern about U.S. fiscal health. The benchmark 10-year Treasury note yield was at 3.58 percent on Friday, below the average of 7 percent since 1980, reflecting expectations a deal would be reached, said John Lonski, chief economist at Moody's Capital Markets Group.

Obama Draws Complaints

For weeks, Obama, 49, stayed out of direct negotiations over the budget accord, sparking complaints from lawmakers in both parties on Capitol Hill that he waited too long to get involved. He spoke to Boehner, 61, directly just twice between Feb. 19, when the House passed its budget bill, and April 2, according to Republican aides.

Serious negotiations only began after Republicans passed the sixth stopgap spending measure on March 15, funding the government through April 8. Fifty-four Republicans voted against the bill, forcing Boehner to rely on Democrats to pass the measure and making it clear that another short-term extension wouldn't be tolerated by the Tea Party-wing of his conference, which is pressing hardest for deficit reduction.

The two sides struggled even to agree on a baseline for how much spending to cut. Formal talks stalled after a heated March 22 meeting, at which a Republican Appropriations aide insisted on using as a starting point the House bill that included $61 billion in spending cuts, said one of the people familiar with the talks. Democrats offered to cut $10 billion.

Another $20 Billion

Six days later, White House Chief of Staff William Daley reinvigorated discussions when he suggested that Democrats could accept another $20 billion in cuts. The staffs began working on a deal that would slash $33 billion in spending, according to aides.

Negotiations suffered another setback on March 30, however, when Vice President Joe Biden announced the $33 billion number to reporters after a meeting on Capitol Hill. That fueled reports of a tentative deal and angered Republican negotiators, who feared a Tea Party backlash.

As Tea Party activists protested outside the Capitol, chanting "shut it down" in a chilly drizzle, Boehner disputed the reports of a deal.

"There is no agreement on a set of numbers, and nothing will be agreed to until everything's agreed to," he told reporters.

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