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Thursday, February 3, 2011 - 10:58pm

Budget Wars: A Standoff Escalates In Congress

In 10 days, President Obama sends Congress the budget he wants for next year. It will likely land in the midst of an escalating standoff over this year's budget.

Republicans are demanding big cuts in all spending that's not defense-related. Democrats say the economic recovery is still too fragile to do that. They are now warning that Republicans could even shut down the government and allow a default on the national debt if those spending cuts aren't made.

Congress failed to pass a budget last year and did not enact even one of the 13 annual appropriations bills. So lawmakers have had to temporarily extend last year's spending levels four times; the latest extension to keep the government running expires four weeks from now.

And the federal government will go into default for the first time ever if Congress does not raise the legal ceiling on the national debt soon. Last Sunday on NBC's Meet the Press, Senate Minority Leader Mitch McConnell was asked if he ruled out forcing a government shutdown if Republicans don't get their way on spending cuts.

This is all he would say: "We have two opportunities to do something important for the country on spending and debt. We ought not to miss this opportunity. The president ought to step up to the plate with us and tackle it, together."

'Playing With Fire'?

The fact that McConnell did not rule out a government shutdown when given a chance to do so was seized on Thursday by the Senate Democrats' new message man, Charles Schumer of New York.

"Too many Republicans seem to want to force a government shutdown. That would be the same mistake they made in 1995. It would be even a bigger mistake now," he said. "It's playing with fire."

Schumer spoke at a news conference Senate Democratic leaders convened at the Capitol to accuse Republicans of threatening not only a government shutdown, but also a default on the nation's debt.

The Senate's No. 2 Democrat, Dick Durbin, said a default "would be the single most irresponsible political action in the history of Congress."

Republicans, in fact, have not been making public threats lately to shut down the government or let it go into default. But Alabama Sen. Jeff Sessions, who's the top Republican on the budget committee, made it clear in an interview that his party will use the possibility of a debt default to win concessions on spending.

"We're not going to raise the debt limit without some actual tangible actions by this administration to reduce spending," he said. Without such a reduction, "then it's not going to happen, I don't believe."

But Sessions added he was confident things would not come to that: "The practical reality is that the big spenders took a shellacking in this election. The American people want to see action now, and I don't think they will be satisfied with putting it off."

Spending Cuts

Indeed, Paul Ryan, the new Republican chairman of the House Budget Committee, announced Thursday that he wants all the nondefense spending Congress has a say over cut this year by nearly 20 percent.

Mark Zandi, chief economist at Moody's Analytics, said that's too much too soon.

"I think it would be counterproductive to engage in that kind of fiscal restraint until it's very clear that the unemployment rate, which is still very high at 9.4 percent, is moving definitively lower," he said. "I think that should be the benchmark for imposing that fiscal discipline and austerity."

Still, Durbin acknowledged some spending cuts will have to be made this year.

"I think that's the political reality with a Republican House: There will be spending cuts for deficit reduction, No. 1. No. 2, if they aren't so deep as to jeopardize the recovery, I understand we're putting ourselves on a credible path toward reducing the deficit. And that restores confidence in the American economy. So I'm ready to try to find ... the number that strikes that balance."

Durbin is currently working with a bipartisan group of senators to try to find a number they can agree on. Copyright 2011 National Public Radio. To see more, visit

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