Budget talks to ward off another government shutdown begin

WASHINGTON — With another government shutdown looming as soon as January, congressional negotiators convened Wednesday to attempt to reach a budget compromise and end the brinkmanship that has left the capital lurching from one fiscal crisis to another.

But just two weeks after a short-term deal ended the 16-day government shutdown, familiar partisan divisions over tax hikes and spending cuts reemerged and expectations remained low that members of the House and Senate panel would achieve the kind of far-reaching deficit reduction deal once pursued by President Obama and House Speaker John A. Boehner (R-Ohio). Most said they would be lucky to simply prevent another shutdown in the new year.

"I don't think we're going to do a 'grand bargain' here," said Sen. Rob Portman (R-Ohio), who was director of the Office of Management and Budget under former President George W. Bush. "I think we can do something that moves us in the right direction, and I think we can call it a 'good bargain.'"

The panel, created from this month's budget agreement, has until Dec. 13 to negotiate a budget framework. Funding to keep the federal government open runs out by Jan. 15.

Republicans resisted new taxes, saying they would rather reduce spending on Medicare and other safety-net programs. Democrats want wealthy individuals and corporations to contribute more tax revenue to help solve the nation's fiscal problems.

"I want to say this from the get-go: If this conference becomes an argument about taxes, we're not going to get anywhere," said Rep. Paul D. Ryan (R-Wis.), the House Budget Committee chairman and his party's former vice presidential nominee. "Taking more from hardworking families just isn't the answer. I know my Republican colleagues feel the same way."

Democrats, though, said the House GOP's budget blueprint was unacceptable because it shifts the burden of spending cuts away from the Pentagon and onto domestic programs for children, seniors and the poor.

"I'm ready to make some tough concessions to get a deal," said Sen. Patty Murray (D-Wash.), Senate Budget Committee chairwoman. "But compromise runs both ways…. Republicans are also going to have to work with us to scour the bloated tax code — and close some wasteful tax loopholes and special-interest subsidies."

The two parties have common ground in their desire to alter the next round of across-the-board spending reductions coming in January. Both sides believe savings could be accomplished in more targeted ways.

But finding a compromise amid the partisan differences remains difficult. Obama was once willing to entertain a deal that would accept Republican proposals to cut Medicare and Social Security benefits, but only in the context of new revenue from taxes or closing tax loopholes.

As the economy has improved, the momentum for such a deal among Democrats has waned. Their motivation fell further Wednesday amid news that the deficit dropped to $680.3 billion in the 2013 fiscal year, which ended Sept. 30. That's the first deficit under $1 trillion since Obama took office, the Office of Management and Budget said.

Republicans remain eager to cut spending, but the GOP's defense hawks and budget hawks are split over how deeply they are willing to tap accounts related to national security. The GOP divisions, particularly with Boehner's majority in the House, have complicated his ability to negotiate successfully with Democrats.

Many Republicans have grown weary of the hardball tactics their far-right allies have taken in pursuit of budget cuts, as polls showed the public largely blamed the GOP for the government shutdown. Experts estimated that the shutdown cost the economy $24 billion.

"This kind of government by manufactured crisis is a disaster for the American people and the American economy," said Sen. Patrick J. Toomey (R-Pa.). "Let's take the government shutdown off the table."

In a symbolic vote Wednesday, House Republicans passed a resolution disapproving further increases in the nation's debt limit. Borrowing has already exceeded the $16.7-trillion statutory limit and reached $17 trillion. It will need to be extended in the new year to remove the threat of default on the nation's bills.

lisa.mascaro@latimes.com