Shutdown nears; furloughs prepared

WASHINGTON (AP) - The federal government lurched toward a shutdown for the first time in 15 years Friday night as President Barack Obama and congressional leaders groped for a last-minute compromise to cut tens of billions in federal spending and end the impasse.

Republicans placed the House on standby for a late-night vote in case a decision was made to pass a stopgap bill to keep the government running for a few days to allow more time for negotiations.

The administration readied hundreds of thousands of furlough notices for federal workers and warned that federal services from national parks to tax-season help centers would be shuttered without a deal by midnight.

"We know the whole world is watching us today," said Senate Majority Leader Harry Reid, D-Nev., during a day that featured incendiary, campaign style rhetoric as well as intense negotiation.

Into the night, the two sides were still swapping proposals from opposite wings of the Capitol and President Barack Obama was on the phone from the White House with House Speaker John Boehner, R-Ohio.

In a Capitol short on news but long on rumors, House Republican leaders circulated an early evening update to the rank and file: "We'd like to clear up some confusion and relay there has not yet been a deal reached, the negotiations are ongoing."

"I was born with a glass half full," Boehner told reporters, indicating optimism about a deal.

Reid, Obama and Boehner all agreed a shutdown posed risks to an economy still recovering from the worst recession in decades.

But there were disagreements aplenty among the principal players in an early test of divided government -- Obama in the White House, fellow Democrats in control in the Senate and a new, Tea Party-flavored Republican majority in the House.

"Republican leaders in the House have only a few hours left to look in the mirror, snap out of it and realize how positively shameful that would be," Reid said at one point, accusing Republicans of risking a shutdown to pursue a radical social agenda.

Hours later, officials said the talks centered on spending cuts in the range of $38 billion to $40 billion. But they stressed there was no accord on either an overall total or the composition of the reductions.

Republicans and Democrats alike said the GOP appeared to be jettisoning a demand to block numerous Environmental Protection Agency regulations on polluters. A federal study of the likely economic impact of the agency's rules was one possible alternative under discussion, they added.

A Republican demand to make changes in a federal program that provides family planning services and women's health care met withering criticism from Democrats. Unexpectedly, several conservative Republican senators urged their counterparts in the House not to shut the government down over the issue.

For much of the day, Reid and Boehner disagreed about what the disagreement was about.

Reid said there had been an agreement at a White House meeting Thursday night to cut spending by about $38 billion as part of a bill to finance the government through the Sept. 30 end of the budget year.

He said Republicans also were demanding unspecified cuts in health services for lower income women that were unacceptable to Democrats.

"Republicans want to shut down our nation's government because they want to make it harder to get cancer screenings," he said. "They want to throw women under the bus."

Boehner said repeatedly that wasn't the case -- it was spending cuts that divided two sides.

"Most of the policy issues have been dealt with, and the big fight is about spending," he said. "When will the White House and when will Senate Democrats get serious about cutting federal spending."

By midday Friday, 12 hours before the funding would run out, most federal employees had been told whether they had been deemed essential or would be temporarily laid off in the event of a shutdown.

The military, mail carriers, air traffic controllers and border security guards would still be expected at work, although paychecks could be delayed.

National parks and forests would close, and taxpayers filing paper returns would not receive refunds during a shutdown. Passports would be available in cases of emergencies only.

Obama canceled a scheduled Friday trip to Indianapolis -- and a weekend family visit to Colonial Williamsburg in Virginia -- and kept in touch with both Boehner and Reid.

Senate Republican Leader Mitch McConnell of Kentucky sounded hopeful, predicting an agreement and saying, "I assure you, these are not unresolvable issues."

The House passed legislation on Thursday to keep the government running for another week while also cutting $12 billion in spending - and providing enough money for the Pentagon to operate through Sept. 30.

Boehner urged Obama to reconsider a veto threat.

That seemed unlikely, although Republicans and Democrats alike talked of trying once more to pass a stopgap bill if the larger agreement remained elusive.

Obama has already signed two of those interim bills, which included a total of $10 billion in spending cuts.

The standoff began several weeks ago, when the new Republican majority in the House passed legislation to cut $61 billion from federal spending and place numerous curbs on the government.

In the weeks since, the two sides have alternately negotiated and taken time out to pass interim measures.

Democrats said Republicans had effectively jettisoned numerous demands to block Environmental Protection Agency regulations aimed at polluters, a key stumbling block in negotiations for weeks.

Originally, Republicans wanted to ban federal funds for Planned Parenthood, a health care services provider that is also the nation's largest provider of abortions.

Federal funds may not be used to pay for abortions except in strictly regulated cases, but supporters of the ban said cutting off government funds for the organization -- currently about $330 million a year -- would make it harder for it to use its own money for the same purpose.

Democrats rejected the proposal in private talks. Officials in both parties said Republicans returned earlier in the week with a proposal to distribute federal funds for family planning and related health services to the states, rather than directly to Planned Parenthood and other organizations.

Democrats said they rejected that proposal, as well, and then refused to agree to allow a separate Senate vote on the issue as part of debate over any compromise bill.

Instead, they launched a sustained campaign at both ends of the Capitol to criticize Republicans.

"We'll not allow them to use women as pawns," said Sen. Patty Murray, a fourth-term lawmaker from Washington who doubles as head of the Democratic senatorial campaign committee.

For Congress and Obama there are even tougher struggles still ahead -- over a Republican budget that would remake entire federal programs, and a vote to raise the nation's debt limit.

Associated Press writers Andrew Taylor, Alan Fram, Julie Pace and Ben Feller contributed to this story.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

By BEN FELLER, AP White House Correspondent

WASHINGTON (AP) -- On the brink of a painful government shutdown, the Obama administration readied furlough notices for hundreds of thousands of workers Friday as Republican and Democratic leaders accused each other of refusing to give ground on a deal to keep operations running.

By midday Friday, most employees of the federal workforce had been told whether they had been deemed essential or would be temporarily laid off from work if lawmakers failed to reach an agreement by midnight. In the event of a shutdown, official furlough notices would begin going out by email, by written letter or in person.

Many workers would be allowed into their offices for up to four hours on Monday to finish tasks, but that would be it.

Senate Majority Leader Harry Reid accused the Republicans of blocking a compromise because they were determined to make it harder "for women to get cancer screenings." That was a reference to money for Planned Parenthood, an organization Republicans assail as the country's largest provider of abortions.

Reid's main antagonist in the long-running negotiations, House Speaker John Boehner, said spending cuts - not social issues - were blocking agreement to prevent a shutdown.

"Most of the policy issues have been dealt with, and the big fight is about spending," Boehner said Friday afternoon.

Barring an agreement or perhaps another temporary bill to keep the government operating, the shutdown of most of the government would begin at midnight. Many essential workers, such as mail carriers, air traffic controllers and the military, would stay on the job, but national parks would close and pay for troops and other workers could be delayed.

Eighth District Republican Rep. Chip Cravaack says he can't confirm whether a deal is close.

"They're keeping it very close to the vest on both sides. I've got some buddies on the other side of the aisle, and I'm asking them, "What are you guys hearing?" They're not hearing anything either. It's very close to the vest. We're seeing them duke it out on the TV like everyone else."

President Barack Obama canceled a trip to Indianapolis Friday to stay in Washington and spoke in separate phone calls with Reid and Boehner Friday morning.

But with no compromise in sight, the White House found itself in a holding pattern as the shutdown clock ticked toward midnight. Aides said there were no plans for the president to summon congressional leaders to the White House.

In another sign of growing uncertainty over an agreement, Obama canceled a weekend trip with his family to Colonial Williamsburg in Virginia.

Obama, Reid and Boehner met at the White House Thursday night for the third time in two days, and their aides struggled without success to reach agreement in middle-of-the-night talks in the Capitol.

Republicans have been seeking $40 billion in cuts, as well as several other provisions to advance the conservative agenda backed by a rank and file that includes dozens of first-termers elected with the support of tea party activists.

Reid said the two sides had reached agreement on $38 billion in spending cuts and the only hang-up was a Republican demand to cut a federal program that provides women's health and family planning services.

"They are willing to throw women under the bus, even if it means they'll shut down the government," he said. "Republican leaders in the House have only a few hours left to look in the mirror, snap out of it and realize how positively shameful that would be."

But Boehner said there was "only one reason that we do not have an agreement as yet, and that issue is spending."

"When will the White House and when will Senate Democrats get serious about cutting federal spending?" he asked.

Boehner urged Obama to reconsider a veto threat against legislation to keep the government open for one additional week while negotiators continue working on a deal to fund federal programs through Sept. 30.

The short-term measure includes $12 billion in spending cuts and would provide enough funds to keep the Pentagon in operation through Sept. 30.

Obama said ominously on Friday night that the machinery of a shutdown was already in motion.

Congressional aides were trying to cobble together a deal on how much federal spending to slash, where to cut it and what caveats to attach as part of a bill to fund the government through the end of the budget year on Sept. 30. The most recent temporary federal spending measure expires at midnight.

For a nation eager to trim to federal spending but also weary of Washington bickering, the spending showdown had real implications.

A closure would mean the furloughs of hundreds of thousands of workers and the services they provide, from processing many tax refunds to approving business loans. Medical research would be disrupted, national parks would close and most travel visa and passport services would stop, among many others. "I don't know why we're doing this now," said Sen. Al Franken. "Why you would want to shut down the government. We just had 216,000 new jobs last month. The economic recovery is beginning to really happen and this is not the time to shut down the government over ideological issues."

Despite the standoff in Washington, the Minnesota Democrat plans to return to the state on Saturday. He'll be around Moorhead, watching flood preparations and helping out with sandbagging efforts.

Republicans want deeper spending cuts than the Democrats favor and also are pressing for provisions to cut off federal funds to Planned Parenthood and to stop the Environmental Protection Agency from issuing numerous anti-pollution regulations.

"They're difficult issues. They're important to both sides and so I'm not yet prepared to express wild optimism," the president said.

There was agreement that a shutdown posed risks to an economy still recovering from the worst recession in decades.

The political fallout was less predictable, especially with control of government divided and dozens of new tea party-backed Republicans part of a new GOP majority in the House. Twin government shutdowns in the mid-1990s damaged Republicans, then new to power in Congress, and helped President Bill Clinton win re-election in 1996.

This time, individual lawmakers worked to insulate themselves from any political damage. Sens. Sherrod Brown, D-Ohio, and Ben Nelson, D-Neb., both seeking new terms in 2012, became the latest to announce they would not accept congressional pay during any shutdown.

"If retroactive pay is later approved, I'll direct my part to the U.S. Treasury," Nelson said. Some two dozen senators of both parties scurried to make similar pledges.

There also were hints Thursday of Republican flexibility on the ban they were seeking to deny federal funds to Planned Parenthood. Officials said Republicans had suggested giving state officials discretion in deciding how to distribute family planning funds that now go directly from the federal government to organizations such as Planned Parenthood.

That would presumably leave a decision on funding to governors, many of whom oppose abortion, and sever the financial link with the federal government.

---

Minnesota Public Radio reporter Brett Neeley and Associated Press writers David Espo, Jim Kuhnhenn, Darlene Superville and Julie Pace contributed to this report.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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