US budget: politicians bicker as federal shut-down looms

Grow up – or shut up. President Obama has laid down the law for Congressional leaders – who are arguing themselves into a corner over this year’s Budget. If they can’t agree by Friday – the entire federal government shuts down for the first time in 15 years.

That’s everything from tax offices to Washington’s Air and Space museum – shuttered, bolted, thousands of employees sent home with no idea when they’ll next get paid. Military personnel could also see their pay stopped. The US Office of Personnel Management points out that during a shut down, government workers won’t be allowed to work for free.

Republican and Democratic leaders failed to make much headway last night, despite a series of back-to-back meetings at the White House. House majority leader Republican John Boehner wants to make cuts worth $40bn – that’s around $7 bn higher than a compromise plan that Democratic leaders in the Senate were willing to sign up to.

Spurred on by his party’s radical new intake of Tea Party activists, Boehner insisted last night “we’re fighting for the largest spending cuts possible”. Senate majority leader Democrat Harry Reid was more optimistic: “The government’s not going to shut down – yet” – but not all the sticking points are budget related. Among the riders tacked on to the bill the GOP are insisting on keeping a high level nuclear waste storage site in, guess where, Harry Reid’s own state of Nevada, which he’s not prepared to contemplate.

No wonder, perhaps, that a frustrated Obama demanded that the two sides “act like grown ups” – and in a rare foray into the press briefing room, warned “If they can’t sort it out, then I want them back here tomorrow. And if that doesn’t work, we’ll invite them again the day after that.”

Radical proposals for decade to come

At the same time – the GOP’s point man on budget matters – Rep. Paul Ryan – has unveiled his radical plan for the next ten years – slashing federal spending by more than $6 trillion – yes, you read that right – over the next ten years. To achieve it, he’s proposing fundamental changes to Medicare and Medicaid, the state-funded health schemes for senior citizens, and those on low incomes. The former would be replaced by vouchers to buy private insurance – the latter by block grants which states could spend as they choose. On top of that – he wants to cut the top rate of individual and corporate tax to 25%, reduce funding for schools, roads and other infrastructure projects, repeal Obama’s flagship healthcare reforms and more. For Ryan – “this isn’t a budget, it’s a cause” – even his opponents are calling the plan courageous and bold.

But for liberals – who’ve seen the numbers suggesting that less than a quarter of Americans are in favour of cutting funds for Medicare and Medicaid – it’s a battle which could move things their way. The White House aims to show a Republican party intent on attacking the vulnerable – as they put it, cutting taxes for millionaires and special interests while hitting seniors, families struggling with a disabled child, workers who’ve lost their health care coverage and young people who depend on federal grants.

According to the New York Times caucus blog – Ryan and Boehner are betting that they already have the political advantage and can set the terms of the budget debate by showing their hand first. “Packaging long term Republican ideas into a huge shift in policy, the lawmakers are betting that voters will focus less on the individual things they don’t like and more on the overall impression of the party’s fiscal discipline.”

But all that could be blown out of the water by a damaging government shut down. As former Labour secretary Robert Reich recalls, back in ’95 he was forced to send hundreds of workers at his department home – while the dignity and credibility of the government was severely dented. “It’s not the way to do the public’s business”, he said.

Obama poll worries

Obama himself will be back on the road today: after officially declaring his re-election campaign on Monday, he’s heading off to rally supporters in Philadelphia and New York – beginning his push to fund what could become the first billion dollar presidential campaign.

And he certainly needs something to galvanise the faithful: his approval rating at the end of March, according to the weekly Gallup poll, was just 45% – while Rasmussen’s survey showed just 22% of Americans think the country is heading in the right direction. Not great numbers, on anyone’s reckoning. Campaign-guru Mark Penn also points out that only two Democrats in the last 90 years have been re-elected to a second term – FDR, and Bill Clinton.

Perhaps this time, like ’96, Obama’s team are hoping that a right wing Republican budget plan – and a shutdown fiasco in Washington, could be just what they need to fire up the grassroots – and show the stamp of presidential leadership. Mark Penn, again: “If in the next year America sees a strong president firmly leading the country to solve its big problems and “winning the future,” it won’t matter who the Republican opponent is, he will win. And if they don’t see that, a billion dollars or more won’t stop the tide.”

Felicity Spector is a chief sub-editor at Channel 4 News. Follow her on Twitter @felicityspector.