By Erik Wasson and Mike Lillis - 03/05/13 08:18 PM EST
Senate Democrats on Tuesday said they would accept the spending level set by the House GOP’s government-funding bill, greatly reducing the chances of a government shutdown in late March.
Democrats in the upper chamber said they would scale back their demands for other changes to the measure after previously insisting on new spending instructions for every department and agency.
Senate Democrats will accept the GOP’s decision to set spending at levels that reflect the $85 billion in spending cuts this year through the sequester. But Reid said Democrats would seek to shift money for agencies within the top-line spending number specified by the sequester.
"Everyone has acknowledged that the [continuing resolution] will fund at the level that we think is appropriate. And so there's agreement on that,” Reid said. “So the only thing that's being done in the CR, is, I understand, we're going to get us some shifting money around for two subcommittees."
Senate Democrats had been pushing to do an omnibus spending bill, but dropped any hope for that plan on Tuesday. That bill would have wrapped in 12 full annual appropriations titles totaling thousands of pages.
Senate Minority Leader Mitch McConnell (R-Ky.) voiced optimism that Senate Democrats and Republicans would be able to reach a deal to allow the upper chamber to approve its own government-funding measure, which would carry funding through the end of the fiscal year on Sept. 30.
"The Senate Democrats are going to want to have some imprint on the version of the continuing resolution that comes over from the House. We anticipate that. What I believe will happen is that they'll be in discussion with the House during the process,” McConnell said.
"We'd like to develop an end game where whatever provisions are added in the Senate also pass the House, because it would be difficult to have a conference this late before the current CR expires," he said.
It is unclear exactly what Senate Democrats will seek to add to the continuing resolution, which is expected to pass the House on Wednesday afternoon. The changes could include several entire appropriations bills as well as dozens of smaller provisions.
Senate Appropriations Committee Chairwoman Barbara Mikulski (D-Md.) said that through negotiation with ranking member Sen. Richard Shelby (R-Ala.), the committee is working to identify which changes can provide the biggest boost to the economy.
Mikulski said she was disappointed the Senate will not approve an omnibus bill.
“Reluctantly and very reluctantly, I can’t get an omnibus. I really wanted an omnibus, but it’s not possible,” she said.
But she described as a positive sign the fact that she was talking to Shelby and the House.
“We are talking to the House, that’s even better news. You’ve got Shelby and I, so you’ve got bipartisan conversation and negotiation going on,” she said.
In terms of adding to the House GOP measure, Mikulski suggested Democrats would look toward domestic priorities like transportation.
“What we have is a will to do a framework that includes not just defense but domestic priorities,” she said.
Mikulski said she is in "constant" coordination with the White House. Last week President Obama outlined that he does not want a government shutdown crisis added to the dispute over the sequestration cuts.
The White House said Tuesday that it is “deeply concerned” about the $984 billion spending bill coming to the House floor this week, but it is not threatening to veto it.
The administration said it would work with Congress to shift funds around, but will leave discussions over the sequestration separate.
House Democrats also retreated from a confrontation over the CR, announcing they would not whip opposition to the House GOP bill.
"We're not whipping at this point in time," Minority Whip Steny Hoyer (D-Md.) told reporters in the Capitol. "We don't want to shut down the government."
Hoyer declined to say whether he himself would support the CR. The House spending bill freezes federal pay and is opposed by federal worker unions that count on Hoyer as their top ally.
House Democrats had hoped to makes changes to the spending bill, but the Rules Committee on Tuesday denied their attempt to amend the CR with a provision turning off the sequester and replacing it with tax increases and farm subsidy cuts.
Some House Democratic leaders plan to register their opposition to keeping the $85 billion in cuts by voting against the resolution.
"We don't want the CR to be used to further the sequester cuts," Rep. Xavier Becerra (Calif.), chairman of the House Democratic Caucus, told reporters in the Capitol after a caucus meeting Tuesday. "I myself will be voting against this resolution."
Rep. Nita Lowey (N.Y.), the senior Democrat on the House Appropriations Committee, said she would also vote “no” on the House measure.
This story was updated at 5:55 p.m.