BUDGET:

Hours before shutdown, GOP demands 'largest spending cuts'

Warnings of a government shutdown escalated yesterday as defiant Republicans promised to pursue higher spending cuts and controversial provisions like halting U.S. EPA's climate rules. The Senate's top Democrat described that as a "fantasy."

House Republicans also ramped up their pressure on President Obama and Senate Democrats yesterday by vowing to vote on a one-week funding extension today that carries $12 billion in spending cuts, including $632 million from energy and water programs, and a political rider affecting abortion funding.

Obama sought to strengthen his position, too, in a speech at a wind turbine manufacturing plant in Pennsylvania in which he accused Republicans of politicizing "a simple debate about how to pay our bills."

"They're stuffing all kinds of issues in there -- abortion and the environment and health care," Obama said. "And, you know, there are times to have those discussions, but that time is not now. Right now, we need to just make sure that we pay our bills and that the government stays open."

The feuding was interspersed with vivid warnings about the effects of a shutdown, which would begin Friday at midnight if funding is not appropriated. White House officials told reporters that tax refunds would be "suspended" for filers who mail their returns to the Internal Revenue Service, and that military personnel would not be paid. National parks and museums would close, and the National Cherry Blossom Festival Parade this weekend would be canceled.

EPA, meanwhile, would stop providing permits to industrial facilities for air, land and water pollutants. It would also suspend reviews of environmental impact statements, "which will slow the approval of critical transportation and energy-related projects," the administration official said.

"EPA will continue to do what is essential to protect life and property, but all other operations will cease," he added.

Boehner wants policy riders

House Speaker John Boehner (R-Ohio), meanwhile, sharpened the brinksmanship by dismissing Democrats' assertions that the two sides had agreed on a spending reduction target -- $33 billion -- between now and Sept. 30. He indicated on Tuesday that the number was closer to $40 billion, but Republican lawmakers say Boehner did not use a dollar figure in a private meeting with his caucus yesterday afternoon.

"Our goal is real clear," Boehner told reporters after the meeting. "We're going to fight for the largest spending cuts that we can get and the policy riders that were attached to them because we believe that cutting spending will lead to a better environment for job creation."

"We're continuing to have conversations with our colleagues in the Senate," he added. "I'm hoping that they'll continue to go well."

Obama and Vice President Joe Biden were scheduled to meet with Boehner and Senate Majority Leader Harry Reid (D-Nev.) last night at 8:45 p.m.

Obama expressed confidence that a shutdown could be averted after the meeting last night with Boehner and Reid. Addressing reporters at 10:44 p.m., he said the parties' differences had narrowed and indicated that negotiators would would work through the night.

"If we haven't made progress, we're going to go back at it again," Obama said. "And we're going to keep on pounding away at this thing because I'm absolutely convinced that we can get this done."

But time is growing short. The House's rule requiring 72 hours for review of legislation could complicate passage of a funding measure negotiated between now and tomorrow. Lawmakers have not ruled out waiving the rule when pressed by reporters this week. Obama also seems open to passing a funding measure that lasts one, two or three days if an agreement is reached this week.

Less cuts means more riders

But the impasse seems too daunting to some lawmakers. Rep. Jim Moran (D-Va.), the top Democrat on the Appropriations Subcommittee on Interior, Environment and Related Agencies, believes that a shutdown is likely because of Republicans' insistence on EPA and abortion riders and plunging cuts.

"I think we shut down at the end of this week and try to put something together next week," he said yesterday. "That's at least a week to work on it. If we wait till next week, then we could be looking at a two- or three-week shutdown. Better that the shit hit the fan this week, and try to fix things next week before we go to Easter recess."

Democrats blame Boehner for acquiescing to the conservative freshmen in his party, many of whom were elected by voters who warned them not to negotiate on spending reductions. Several freshmen said yesterday that $33 billion in cuts -- the Democratic position -- is not enough. They added that if the reductions fall below their original proposal of $61 billion, more policy riders will be needed.

"There's got to be an inverse relationship. If the [spending] number comes down, the riders have to go up," said Rep. Tim Scott (R-S.C.). "The more important riders affect the economy, and we believe EPA has a negative impact on the economy."

But others said they're content to attack EPA's climate rules in separate legislation -- like the bill that passed the House yesterday -- or during the 2012 budget debate. The emphasis should be on cutting as much spending as possible, they say.

"The president can't find it in his heart to cut $61 billion today?" said Rep. Sean Duffy (R-Wis.). "I don't think the American people think $61 billion is too much today under the auspices of $14 trillion in national debt and $1.6 trillion in borrowing this year."

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