House GOP Gives Senate Dems a Second Chance to Avert Government Shutdown

The House Republican leadership introduced a new short-term Continuing Resolution (CR) on Friday to keep the government funded for another two weeks and save $4 billion.  The House will vote on the two-week CR on Tuesday.

The Republicans’ two-week CR would keep the government open though March 19 to provide time to negotiate with the Senate Democrats over spending levels for the rest of the current fiscal year.  If no CR is passed by the time the current funding measure expires on March 4, the federal government will shut down.

“A government shutdown is not an acceptable or responsible option for Republicans.  That’s why we are producing yet another CR that will keep the government running for the next two weeks while cutting spending, so that we can begin to live within our means just like every business and family throughout the country,” said Majority Leader Eric Cantor (R.-Va.) during a conference call with reporters on Friday.

The Republicans tailored the new CR to meet proposals already offered by the Senate Democrats and White House: terminating certain government programs and eliminating earmark projects.

“We went in and found where the President agreed with us, where the Senate said they agreed with us on earmarks.  This is what we produced.  Any Democrats who cant take these basic steps, they are putting politics before people,” said Majority Whip Kevin McCarthy (R.-Calif.).

The Appropriations Committee released the legislation, which will save $4 billion in two weeks by cutting specific programs and earmarks.  The two-week CR saves $1.24 billion through terminating eight government programs that Obama requested in his budget for Fiscal Year 2012.  The CR also saves $1.24 billion by cutting 49 earmarks, a practice that both Obama and Senate Democrats have said they favor ending in Washington.

“If they walk away from this offer, they are then actively engineering a government shutdown, and that is just completely incongruent with the American public,” said Chief Deputy Whip Peter Roskam (R.-Ill.).

After five days of long debate, the House passed a CR last Saturday that cut more than $60 billion in spending and funded the government through September 30.  However, Senate Majority Leader Harry Reid (D.-Nev.) refused to bring up the House CR because he said the spending cuts are “draconian” and “unworkable.”

“The only thing draconian is the idea of defending the status quo in Washington,” Roskam told reporters.

The budget deficit is projected to be $1.6 trillion by the time the fiscal year ends on September 30.  The U.S. debt is more than $14 trillion and is on course to hit the statutory debt ceiling in the next several months.

Speaker of the House John Boehner (R.-Ohio) has insisted that he will not allow a spending bill of any length through the House that does not cut government spending.  In spite of Boehner, Reid said this week that he plans to put a 30-day CR to a vote, which only freezes spending at the current bloated 2010 levels.

“Unfortunately, the only plan that Senate Democrats—led by Harry Reid and Chuck Schumer—have offered is the status quo that locks in current spending levels and does not cut one penny from current levels,” said Cantor.

Reid and the other Senate Democrats, despite not proposing any funding bills to cut spending, have continued to blame a potential government shutdown on the Republicans.

“We hope the Senate is going to finally join us in these common-sense cuts to keep the government running, and not continue to play chicken with government shutdown,” said Cantor.

The White House has also released a statement that said President Obama would veto the CR if the spending cuts “undermines critical priorities or national security through funding levels or restrictions.”

House Republican leaders say that passing a CR for the rest of this fiscal year is vital to helping the economy and job creation.

“Right now the fiscal overhang of uncertainty—in questioning whether the country is going to continue to pay its bills—is weighing heavily on job creators and weighing heavily on people who just don’t see an optimism reemerging” said Cantor.

McCarthy said that businesses are not investing or growing because of the uncertainty of what will come out of Washington.

“If you look at corporate America today, there is more money sitting on the sidelines than there has been in last 50 years.  That is a stronger stimulus:  When it’s private sector money invested into the economy, creating new jobs, that are paying taxes, that are lowering unemployment, buying houses, paying college,” said McCarthy.  “That is the philosophy we know will work.”