POLITICS
04/08/2011 08:45 am ET | Updated Jun 08, 2011

Government Shutdown Threat Prompts Obama, GOP To Scramble To Strike Budget Deal

WASHINGTON - The federal government lurched toward a shutdown for the first time in 15 years on Friday as Republicans and Democrats in Congress struggled for a way out and swapped increasingly incendiary charges over which side was to blame.

The Obama administration readied hundreds of thousands of furlough notices for federal workers, to be released if no deal was reached by a midnight deadline to keep operations running.

"We know the whole world is watching us today," said Senate Majority Leader Harry Reid, D-Nev., and into the night the two sides were still swapping proposals from opposite wings of the Capitol in search of an elusive agreement.

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

Reid, President Barack Obama and House Speaker John 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.

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.

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.