Are We Heading for a Government Shutdown?

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The odds of a government shutdown were raised significantly this morning after House GOP leaders and President Obama failed to reach an agreement to continue funding the government.

“While there was a good discussion, no agreement was reached,” Speaker John Boehner’s staff wrote in an e-mail to reporters following the White House meeting. “The Speaker reminded those present that there has never been an agreement on $33 billion as an acceptable level of spending cuts, and that $33 billion in cuts is not enough, particularly when it is achieved in large part through budget gimmicks.”

On a call early last week White House Chief of Staff Bill Daley and Boehner’s staff agreed to allow the House and Senate Appropriations Committees to begin sketching out what $33 billion in cuts would look like. The two chambers have already passed $10 billion in cuts, so really the two committees were looking for $23 billion in savings. The two sides agreed on roughly $7.5 billion in cuts to discretionary spending, according to a Senate source, as well as $8 billion in cuts to mandatory spending. The White House wanted to make up the final $7.5 billion in more mandatory cuts – by accelerating the timeline for cutting Pell Grants for summer school and graduate students, cuts to the State Children’s Health Insurance Plans and eliminating funding for Kent Conrad’s health care coops. But Boehner wanted the final money to come out of discretionary spending – thus the impasse.

The talks began to collapse over the weekend when Obama called Boehner and Boehner made it clear to the President that he never agreed to the $33 billion level and that the cuts to discretionary spending weren’t deep enough – especially if few of the House’s so-called riders would make it through the Senate. The House budget bill included hundreds of controversial riders that defund everything from health care reform to Planned Parenthood to the Environmental Protection Agency’s regulation of greenhouse gases. Most of those riders have little chance of garnering 60 votes to pass the Senate.

The White House last night instructed its agencies to be prepared in the event of a government shutdown. Boehner also warned his conference that one could be imminent – news that was received with a standing ovation. In the meantime, the Speaker is planning to bring another stopgap measure to the floor that would fund the government for another week, but at the cost of an additional $12 billion in cuts – a proposal that is DOA in the Senate.

Even if the two sides were to reach a deal, the clock is ticking and a brief shutdown might be unavoidable. Funding for the government runs out on Friday and the House has a rule that all bills must be posted on line three days before a vote – which means that in order to pass something on Friday a bill must be posted online by tomorrow at the latest.

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