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Budget Negotiations To Stave Off Shutdown And Sequestration May Actually Prove Successful

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WASHINGTON -- Lawmakers are close to a breakthrough on a budget deal that would avoid another government shutdown next year and provide relief for sequestration cuts, congressional aides from both parties told The Huffington Post on Tuesday.

Far from the grand bargain talks of 2011 and 2012, any deal reached by the bipartisan budget conference committee would be small in terms of scope, each side notes. But there is more optimism about the possibility of an agreement than at any point during talks over the past few years. So far, both sides have agreed to set a spending level for the next fiscal year above the $967 billion in place under current law. According to both Democratic and Republican aides, who would only speak about the talks on condition of anonymity, the higher number will be around $990 billion, though it could potentially go as high as $1 trillion.

In addition, both sides are coalescing around approximately $80 billion in savings that could be used to replace cuts from sequestration over the next two years. The sequestration relief would be shared among defense and non-defense programs alike. Among the items being considered to pay for it include broadband spectrum auctions, an increase in certain TSA fees, changes to the postal service and federal pension reforms. A Senate Democratic aide noted that structural changes to entitlement programs are not on the docket.

As with these types of high-stakes talks, the possibility of everything blowing up at the end remains very real.

"They are close but it's always the last 10-20 yards that are the hardest," said another Democratic Senate aide. "They are definitely making positive progress and closing in on something, but it is not final yet by any means."

"Talks are very fluid," said a Republican House aide. "These things change minute-by-minute and hour-by-hour, which means what is accurate at 10 in the morning is not by 4 in the afternoon."

But time is beginning to be a factor. Lawmakers involved in these budget talks, which are being led by House Budget Committee Chair Paul Ryan (R-Wisc.) and Senate Budget Committee Chair Patty Murray (D-Wash.), have until Dec. 13 to announce a deal. Should they meet that deadline, it would then be up to appropriators from each chamber to fill in the blanks of the budget before the government runs out of money on Jan. 15.

House Speaker John Boehner (R-Ohio) has said that if negotiators fail to produce a deal, he will push for a continuing resolution to fund the government past Jan. 15 at the $967 billion level. Republicans on the Hill expect him to move such a bill before Congress leaves for Christmas break.

Whether this will fly with Democrats is an open question. Politico reported Tuesday morning that Senate Majority Leader Harry Reid (D-Nev.) would accept a continuing resolution bill rather than risk another government shutdown. Those close to the majority leader say he would have to consult with his caucus before making any such decision, and that if he were to agree to the stopgap measure, he would demand that it be short in duration.

But other Democratic leaders are less willing to go along.

"I'm not going to support a short-term CR," House Minority Whip Steny Hoyer (D-Md.) said Tuesday. "I believe that hurts our national security, it hurts our economy and it undermines our responsibility of running government at a level that is productive for our people," he said of keeping sequestration in place.

The good news for Hoyer, Reid, and other Democrats -- at least at this juncture -- is that Republicans also want to see changes made to sequestration. In mid-January, the sequester will cut an additional $20 billion from the defense budget, prompting many national security-minded conservatives to push for some fiscal relief. So while Boehner may have leverage in knowing that if nothing is done, the top line number heads in his direction, down to $967 billion, he also has to contend with members of his own party who don't want that to happen.

"I think there are certain Republicans, the pro-defense appropriators, [who] want a number above 967," said the House Republican aide.

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