–White House, Congress Work Toward Accord On FY’11 Budget
–Senate Leader Reid, House Speaker Boehner Seek Deal Before April 8
–House Budget Committee Chief Ryan To Call For $4 Trillion In Savings

By John Shaw

WASHINGTON (MNI) – In a potentially critical week, the White House
and Congress will continue to work fitfully toward a final 2001 fiscal
year spending agreement while the Republican chairman of the House
Budget Committee is set to outline a ten year budget that secures up to
$4 trillion in savings.

As it pertains to the FY’11 budget, the White House and Congress
are focused on a plan that cuts spending by $73 billion below what
President Obama first proposed and $33 billion from current spending
levels.

The two parties are working toward a FY’11 discretionary spending
cap of $1.055 trillion.

But beneath this overall number, there appears to be considerable
disagreement over the specific cuts.

Senate Majority Leader Harry Reid has said that savings from both
defense and entitlements should “contribute” to the final package of $33
billion in additional spending cuts for FY’11.

The 2011 fiscal year began on Oct. 1 and the government has run on
six short-term funding bills.

Congress’ most recent temporary spending bill for the 2011 fiscal
year will keep the federal government funded until Friday.

House Speaker John Boehner has been much more cautious in assessing
the status of the budget talks, saying that negotiations are focused on
both the final spending cut number and the details of the final package.

“There is no number. There is no agreement on a number,” Boehner
said Friday.

He added that House Republicans are pushing for “the largest
spending cuts possible” in the final FY’11 bill.

Boehner has insisted that House Republicans don’t want a government
shutdown next Friday.

The Speaker still faces pressure from a large group of conservative
House Republican freshmen who do not want the GOP to compromise on
fiscal matters.

Congressional observers expect the two sides to come to an
agreement this week, in time for the House and Senate to vote on the
FY’11 package before Friday. But an FY’11 agreement is not certain.

As the bitter battle over FY’11 spending winds down, the fight over
the FY’12 budget will enter into a new phase this week.

House Budget Committee Chairman Paul Ryan is set to unveil his
FY’12 budget Tuesday and the plan is expected to call for about $4
trillion in ten year savings from Medicare, Medicaid, other entitlement
programs and discretionary programs.

Ryan’s budget is likely to avoid policy details. Changing
entitlement programs require separate legislation apart from the budget
resolution which is what Ryan will present this week.

Even before Ryan’s budget has been unveiled, House Democrats have
begun to pounce on it, charging it calls for punishing cuts that would
unravel key programs.

Senate Budget Committee Chairman Kent Conrad is expected to release
his FY’12 budget later in the month. Conrad continues to work with a
bipartisan group of senators on turning the main elements of the
Simpson-Bowles deficit reduction plan into a bipartisan legislative
package.

In other matters this week, Treasury Secretary Tim Geithner will
testify Tuesday at 10 a.m. on Treasury’s FY’12 budget to a subcommittee
of the Senate Appropriations Committee.

A subcommittee of the Senate Banking Committee will hold a hearing
Wednesday morning at 9:30 a.m. on the role of the accounting profession
in preventing another financial crisis. A separate subcommittee of the
Senate Banking Committee will hold a hearing Wednesday afternoon at 3
p.m. on the state of community banks.

The Senate Finance Committee will meet on Thursday at 10 a.m. to
consider two pending nominations: David Cohen to be the undersecretary
of Treasury for terrorism and financial crimes and Jenni LeCompte to be
assistant secretary of Treasury.

The House Financial Services Committee will consider
Republican-drafted legislation Tuesday at 10 a.m. to overhaul the
operations of Fannie Mae and Freddie Mac.

A subcommittee of the House Financial Services Committee will hold
a hearing Wednesday at 10 a.m. on proposals to overhaul the newly
established Consumer Financial Protection Bureau.

Congress’ Joint Tax Committee will hold a roundtable Wednesday at
9:30 a.m. to discuss tax reform. Former Treasury Secretary James Baker
will testify .

The trade subcommittee of the House Ways and Means Committee will
hold a hearing Thursday at 10 a.m. to discuss a pending trade agreement
with South Korea.

** Market News International Washington Bureau: (202) 371-2121 **

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