Government Shutdown Looms As Budget Standoff Drags On
DOW JONES NEWSWIRES
Negotiations between White House and congressional leaders about keeping the government funded through September slogged on as an agreement remained elusive Friday.
Senate Democrats were preparing their own short-term spending measure Friday afternoon to keep the government running after the midnight deadline.
The day was marked by a swirl of conflicting and evolving information on Capitol Hill.
Friday afternoon, Sen. Charles Schumer of New York, the third-ranking Democrat, said the Democrats' spending measure would fund the federal government through April 15 and include $2 billion in spending cuts from current levels.
Senate Majority Leader Harry Reid (D., Nev.) said he was consulting with Republican leaders about the procedural options to fast-track such a package.
Democrats said the negotiations remain hung up over funding for women's health services, and Reid said the impasse could be dealt with if Republicans honor an agreement made at a Thursday night meeting between him, House Speaker John Boehner (R., Ohio) and President Barack Obama.
"All we need for them to say is that the agreement we made last night will be fulfilled," Reid said, insisting that the two sides agreed to a spending bill that includes $38 billion in cuts.
Earlier Friday, Boehner told rank-and-file House Republican lawmakers at a lunch meeting that there has been no agreement on the level of cuts.
He later told reporters that how much to cut the federal budget remains the key area of dispute with Democrats. "We're still in discussions," Boehner said. "The big fight is over the spending."
EFFECTS OF A SHUTDOWN
The Obama administration says a shutdown would affect roughly 800,000 federal employees and has the potential to halt the economic recovery.
Among its possible effects:
-The National Park Service would close all 394 national parks. A National Park Service spokesman said roughly 10,000 campers and hotel lodgers already staying within the national parks would be told to leave by Monday at 6 p.m. In New York, the ferry to the Statue of Liberty ferry would stop running, and in Washington, the Smithsonian museums will be closed.
-The Securities and Exchange Commission would operate with a skeleton staff and wouldn't be processing new or pending registration statements. That means no one would be around to green-light initial public offerings and many follow-on offerings, and they would be unable to price.
-The Labor and Commerce Departments said they would be forced to close. Data they publish provide crucial economic snapshots that inform the Federal Reserve's monetary policy decisions.
-The Treasury Department said it would furlough more than two-thirds of its staff, but maintain enough workers to accept tax returns, make interest payments on the national debt, send out Social Security checks and continue other essential activities. But the agency would suspend tax audits, curtail some law enforcement functions and stop some grant programs.
-The U.S. Department of Health and Human Services said it would have to furlough 47,693 of its more than 76,000 employees, including workers at the Food and Drug Administration, the National Institutes of Health and the Center for Medicare and Medicaid Services.
U.S. stocks fell modestly as investors exercised caution ahead of the potential government shutdown.
Crude oil futures topped $112 a barrel, with a dollar weakened by the deadlocked budget talks providing the impetus.
Treasurys fell, though losses were moderated as some investors moved out of stocks amid the impasse.
Investors sought refuge in precious metals, pushing gold futures closer to $1,500 and sending silver above $40 for the first time since 1980.
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