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Signs of hope as government shutdown looms

From Dana Bash, Ted Barrett and Deirdre Walsh, CNN
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Many Americans fail federal budget quiz
  • Hopeful signs for no government shutdown, but the devil is in the details
  • House Speaker John Boehner tries to manage frustrated rank-and-file conservatives
  • Negotiations set to continue through the weekend

On the Ticker: Americans flunk budget IQ test.

Washington (CNN) -- With a deadline looming at the end of next week, leaders in both parties sent hopeful signals Friday that they can pass spending legislation to avert a U.S. government shutdown.

"We know that both sides are close. We know that a compromise is within reach," said President Barack Obama.

"We are on the doorstep of a deal," said Sen. Chuck Schumer, the third-ranking Senate Democrat.

"I am not preparing for a government shutdown," House Speaker John Boehner told reporters.

"Let's all be honest, if you end up shutting the government down, it will end up costing more than you save because you interrupt contracts, there are a lot of problems with the idea of shutting the government down. It's is not the goal, the goal is to cut spending," said Boehner.

Still, exactly how Democrats and Republicans will decide on which government programs to cut remains to be seen.

The current funding measure keeping the government running expires on April 8. The legislation under consideration would fund the government for the rest of the fiscal year.

While negotiators agreed tentatively earlier this week on a compromise to slash $33 billion in federal spending, there are still big differences over where in the budget to cut.

A big point of contention: Democrats want to find savings in so-called mandatory spending, the largest part of the federal budget, which is made up of pre-determined spending, like entitlement programs.

"Mandatory spending must be part of the final deal, otherwise the cuts become so deep on certain programs that they cut into bone," Schumer told reporters.

Neither Schumer nor other Democrats would say what mandatory spending cuts they are proposing.

But Boehner made clear that Republicans want the cuts to come only from what's known as discretionary spending, the relatively small percentage of the overall budget that Congress sets every year in the appropriations process.

"We want real spending cuts. We are dealing with discretionary part of the budget. That's what our plan was, to reduce spending for the balance of this fiscal year," said Boehner.

Another prickly issue is the question of so-called policy riders -- eliminating funding for things like Planned Parenthood and the health care law, and banning the Environmental Protection Agency from regulating greenhouse gases.

Democrats say those are non-starters.

"The riders that are ridiculous in nature, and most of them are, have no chance of surviving," said Senate Majority Leader Harry Reid.

But ranks-and- file conservatives are demanding that GOP leaders keep some policy riders in a final deal.

GOP pressure on Speaker Boehner

In fact, the pressure Boehner is getting from fellow Republicans not to compromise on what they say was an election mandate to cut spending is an overarching part of the dynamic in these complicated discussions.

House Republicans ran on a pledge to slash what amounts to $61 billion in spending -- which they voted to cut last month.

"Anything less that the $61 billion is an insult to the gravity of the problem," said Rep. Paul Broun, a Georgia Republican.

"I'm going to have a hard time voting for a bill that doesn't cut significantly in the $60-billion range," said freshman Rep. Tim Griffin, R-Arkansas.

Referring to the new 87-member GOP freshmen class, Michigan Republican Rep. Bill Huizenga said Friday if the $33 billion compromise came to the House floor "I think the vast majority of my colleagues" would oppose it.

Two weeks ago, the last time the House passed a stop-gap measure to keep the government running, a large number of Republicans, 54, voted "no." GOP leaders had to rely on Democrats to pass it.

Senate Democratic leaders signaled Friday that their House Democratic colleagues would help Boehner out again if any compromise results in losing significant GOP votes.

"Speaker Boehner understands that if he comes up with a reasonable approach to this he can look to the other side of the aisle for support," said Sen. Dick Durbin, the second-ranking Senate Democrat.

That may help keep the government running, but compromising over the objections of rank-and-file Republicans who swept him into power could cause big political problems for Boehner.

"It's a defining moment for principled leadership," said Rep. Allen West, R-Florida, a freshman elected with Tea Party support. "It's a defining moment to say will we stand and make some hard decisions for the American people," he said.

Boehner is trying to manage anger among conservatives by insisting publicly there is "no deal" and promising privately, like in a meeting Thursday with House freshmen, that he is doing his best to fight.

Still, after meeting with Boehner and other top House GOP leaders Thursday afternoon, Rep. Billy Long, R-Missouri, continued to press for the House-passed bill, saying, "$33 [billion] is not going to work."

Another freshman, Rep. Stephen Fincher, R-Tennessee, told reporters after the meeting, "it's going to be tough for me to vote for that."

"We were sent up here to be firm and stand firm and do what the American people want," Fincher said.

But several Republicans acknowledged that as much as the focus now is on figuring out how to fund the government for the rest of this fiscal year, they are also eager to move on to work on larger, long-term cuts in the 2012 budget and reforms to entitlement programs like Medicare and Social Security.

Illinois Rep. Joe Walsh, referring to the $33 billion compromise, said Thursday, "it's certainly something we'd look at because there are bigger fights coming in the next couple of weeks, the next couple of months."

But Walsh downplayed any divisions within House Republican ranks, complimenting Boehner and saying, "his conference is actually more unified than you think."

House Republicans pass symbolic measure

Meanwhile, House Republicans used their majority power to pass a bill Friday designed to show they are trying to avoid a government shutdown, and blame Senate Democrats should one occur.

The measure says that if the Senate, run by Democrats, doesn't vote on a spending cut bill before April 6, then the House GOP-passed measure is "enacted into law."

It was a purely symbolic move, since the House has no power to force this on its own, and there is no chance the Senate would pass such a bill.

House Democrats mocked Republicans for scheduling a vote on a bill that they said ignored the Constitution.

"Republicans think an unconstitutional gimmick will give them political cover as they march toward a government shutdown? That must be an April Fool day's joke," Jesse Ferguson of the Democratic Congressional Campaign Committee said in an email.

Negotiations to continue

Negotiations on a spending cut compromise are expected to go on all weekend. If there is no deal by early next week, passing a spending measure through both the House and the Senate by the April 8 deadline may be tough.

Although leaders on both sides of the aisle say there is no appetite for another stopgap bill to keep the government running, Senate Majority Leader Reid said it could be necessary "to finalize the paperwork on the agreement we make."