Senate Dems, White House to offer $20B more in cuts; tensions rise

Senate Democrats and the White House on Monday were working to finalize a new counteroffer to the GOP on 2011 spending cuts.

The counteroffer would cut an additional $20 billion from  2011 spending on top of the $10 billion already cut by two short-term continuing resolutions enacted this month, sources close to the talks said.

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The proposal is being put together under the direction of White House Chief of Staff Bill Daley, who was trying to get Senate caucus agreement on where to make the cuts. The proposal would be made by Senate Democrats to House Republicans. 

The offer has not been shared with House Republicans yet, and there was “radio silence” from the GOP over the weekend, a congressional aide said.

Tensions are rising with the possibility of a government shutdown approaching. The current measure funding the government expires April 8, meaning if Congress does not approve a new measure by then, there will be a government shutdown.

Both Senate Majority Leader Harry Reid (D-Nev.) and Speaker John Boehner's (R-Ohio) office expressed frustration on Monday. 

Reid blamed the Tea Party for an impasse in the talks, arguing that mainstream Republicans and the Tea Party are divided over how much to cut, and that this prevented substantive negotiations over the weekend.

"I am extremely disappointed that after weeks of productive negotiations with Speaker Boehner, Tea Party Republicans are scrapping all the progress we have made and threatening to shut down the government if they do not get all of their extreme demands," Reid said in a statement. "The division between the Tea Party and mainstream Republicans is preventing us from reaching a responsible solution on a long-term budget that will make smart cuts while protecting American jobs, and prevented negotiations from taking place over the weekend even as the clock ticks toward a government shutdown." 

Boehner's (R-Ohio) office demanded that the Senate pass a bill with its list of acceptable cuts.

“We haven’t seen such a proposal. It’s been nearly 40 days since the House passed a long-term bill to cut spending and fund the government for the remainder of the fiscal year, and the Democrats in the Senate still haven’t passed anything. The Senate needs to do its job and pass a bill," said Michael Steel, spokesman for Boehner. 

Democrats argue the $30 billion in cuts the White House and Senate Democrats are proposing would be roughly approximate to the $35 billion in cuts House GOP leaders first proposed in February. GOP leaders raised their proposed spending cuts to $61 billion under pressure from House conservatives, including the freshman class that was propelled to victory last fall in part by the Tea Party movement.

Senate Democrats last week put an $11 billion package of cuts on the table that included $7.5 billion in discretionary spending cuts and $3.5 billion in savings to mandatory programs, aides said.

The GOP has balked at having mandatory cuts count toward the $61 billion in cuts they are demanding. They argue the GOP’s “Pledge to America” during the 2010 campaign promised to bring discretionary spending to 2008 levels. Cuts to farm subsidies and other mandatory spending doesn’t help them achieve that goal.

"Using gimmicks like using mandatory spending instead of discretionary spending is not a world we want to play in," a GOP aide said. 

A Democrat aide defending using mandatory spending cuts. "That's real, not a gimmick," the aide said. The aide contended that, for the GOP, "it's about politics rather than really cutting [the] budget."

A House GOP leadership aide highlighted that Republicans are looking for Democratic acceptance of at least some of the policy riders included in the House GOP bill funding the government for the rest of the year. These riders include provisions to defund Planned Parenthood, the new healthcare law and the EPA’s ability to regulate greenhouse gases.

The aide said the deal must be about the level of discretionary spending, not including mandatory savings, as well as the policy riders.

The GOP has insisted that Democrats use H.R. 1, the House-approved spending measure that would have cut $61 billion from 2011 spending, as a basis for negotiations. Democrats want to use this year’s spending as the basis for talks.

Working off of H.R.1 would mean Democrats would have to state they object to specific cuts, putting them on the spot. Using the stopgap as a basis for talks means the GOP has to explain why the Democrat cuts are not acceptable.

The White House offer is not likely to fly with the 87 GOP freshmen in the House who are demanding deep cuts or the 54 GOP members who opposed the last short-term CR because it did not demand a full $61 billion in cuts.

Over last week’s recess, House Republicans have been taking heat from conservative supporters to stand for nothing less than $61 billion in cuts, a GOP aide said Monday.

“We’ve taken some heat this week and, assuming [others] have as well, I don’t see how $20 billion makes the mark unless it comes with some super painful policy riders for the administration,” the aide said.

This story was first posted at 10:49 a.m.