Avoiding A Shutdown A Matter Of Agreement This coming week, Democrats and Republicans will have to hammer some type of budget deal to keep the federal government operating after Friday. NPR national political correspondent Mara Liasson joins us to talk budget politics.
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Avoiding A Shutdown A Matter Of Agreement

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Avoiding A Shutdown A Matter Of Agreement

Avoiding A Shutdown A Matter Of Agreement

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NPR's national political correspondent, Mara Liasson is here to talk a little more about the politics at play in these disagreements over spending cuts. Hi, Mara.

MARA LIASSON: Hello, Liane.

HANSEN: Who do you think will blink first in the budget standoff, Democrats or Republicans?

LIASSON: I guess you could say that both sides have already blinked a little bit, because in this two-week temporary spending bill that we're now talking about, that would give them more time to negotiate, the Republicans came off their original proposal that the temporary bill should be pro-rated. In other words, they should take that big $61 billion in cuts that they wanted for the rest of the year, and pro-rate it week by week.

Instead, what they did is they kept current spending levels for all government programs, except for eight. And those eight were programs President Obama already wanted cut or eliminated.

The Democrats came off their original position that the rest of the year should be funded at current levels. So both sides moved a bit in this tiny, little temporary bill that will give them two more weeks to negotiate. What happens later? Unclear.

HANSEN: That's it. We should mention Democrats and Republicans are bickering over funding the last seven months of the year. We're not even talking about the budget for next year. I mean, put this current budget fight in perspective.

LIASSON: Well, thats the thing thats so amazing. This is just to finish funding for this year. No, we're not talking about the budget for next year. And what we're also not talking about is solving the fiscal problems of the United States. This really isnt about the deficit. These cuts won't dent the deficit, hardly at all. We're only talking about 12 percent of federal spending, non-defense domestic discretionary spending. That means we're not talking about the big drivers of the deficit - Medicare, Medicaid, tax cuts.

This is really a symbolic fight. It certainly is a test of the Tea Party's power because the House freshmen are determined to cut spending in any way they can. But it's not about resolving the deficit.

HANSEN: This is about competing interests. Let's examine that. What do Republicans want?

LIASSON: Republicans want to cut spending. That is their goal and they want to cut it by as much as they can. Now, dont forget they were split about how much they should cut spending. Originally, the House Republican leadership proposed about $32 billion in cuts, but the Tea Party freshmen bloc - there're 87 of them, said no way, we want more. And they passed a bill to cut $61 billion for the remainder of this year.

So they want to cut spending. What we dont know is: What is the magic number that will satisfy the Tea Party freshmen, so they can pass some kind of compromise bill.

HANSEN: Does a shutdown then work in their interest?

LIASSON: Well, they're divided about that, too. The House Republican leadership has said over and over again, they do not want a shutdown at all. They remember the last time the government shut down and they were blamed for it, back in 1995. There are several House freshmen who have said publicly, if a shutdown is whats needed to force government spending to be cut, so be it.

And there are plenty of voices on the outside - Rush Limbaugh, other Tea Party leaders - who are saying shut down the government, thats just fine with us.

HANSEN: And what's at stake for the Democrats and President Obama?

LIASSON: Well, President Obama and the Democrats dont want to be in the position of merely defending spending. Because this is a different climate than in 1995; people really - American voters really want America's fiscal problems to be addressed. They want government spending to be cut. They want the deficit to be addressed. So they dont want to just be defending the status quo.

On the other hand, they dont want to endanger the economic recovery. And, as a matter of fact, there was an estimate from Goldman Sachs that the original House bill of $61 billion in cuts would have shaved up to two percent of growth off GDP for the rest of the year. They certainly dont want that. They also dont want cuts in areas that they think are important investments for the future, like education.

HANSEN: So will any of this be instructive, given the upcoming debates over the debt ceiling, the 2012 budget or entitlement reform?

LIASSON: Well, I think so. Those are obviously much bigger, higher-stakes debate. A government shutdown is bad but a default on the debt - which could happen if the debt ceiling isnt raised by early May, or whenever we hit the ceiling - would be much, much more devastating. You know, it would change our status in the world as debtor nation.

But if the two sides can come to a compromise on this Continuing Resolution, the budget for the rest of this year, it could build some trust so they could deal with the debt ceiling. They could start working on the longer range entitlement reform debate - that the president says he wants to have but just not yet. And Republicans say they are determined to have, because they say in their 2012 budget, which they are going to release in April, that there will be cuts to Medicare and Medicaid.

HANSEN: NPR's national political correspondent Mara Liasson. Mara, thank you.

LIASSON: Thank you, Liane.

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