House Republicans, Obama seek end to budget stalemate

WASHINGTON — WASHINGTON Negotiations to end the government shutdown and avert default continued Friday as Senate Republicans huddled with President Barack Obama privately to discuss a pathway out of the impasse.

POLL: MOST FAULT REPUBLICANS FOR SHUTDOWN

A Wall Street Journal/NBC News poll showed more people blaming Republicans than President Barack Obama for the shutdown, 53percent to 31percent. Just 24percent viewed the Republican Party positively, compared with 39 percent with positive views of the Democratic Party.

"The question is: Can you get something in the next 72 hours? The president seems committed to being engaged in it, and he hadn't been up to this point, so I'm optimistic," said Sen. Richard Burr, R-N.C., after the meeting.

House and Senate Republicans appear to be pursuing different negotiations with the White House, and it is unclear whether either proposal can win over Obama and Senate Majority Leader Harry Reid, D-Nev., who is leading congressional Democrats in the negotiations.

Democrats have resisted GOP efforts, led by House Speaker John Boehner, R-Ohio, to engage in budget talks until the government is reopened and the debt ceiling is increased before the Oct.17 deadline.

Day 11

The shutdown, in its 11th day Friday, began when Republicans demanded a delay or defunding of the Affordable Care Act in exchange for their votes to keep the government running.

The funding discussion has now snowballed to include a plan to increase the U.S. borrowing limit so the nation can continue to pay its bills on time. Republicans have since moved on from focusing solely on the health care law to seeking broader concessions on fiscal issues.

Congress will continue to work through the weekend. House Republicans will huddle Saturday morning and the Senate is scheduled to vote on a key procedural hurdle to move ahead with a 15-month increase in the debt ceiling with no conditions attached.

House Republicans have offered a short-term path to resolve the shutdown and avert default in order to reach a broader budget deal, while Senate Republicans appear to be mulling longer-term solutions in order to reach an agreement.

Stopgap measure

Sen. Susan Collins, R-Maine, is working with senators in both parties on a budget framework that includes a six-month stopgap funding bill and suspends the debt ceiling through January. The extensions would give Congress breathing room to reach a broader budget agreement.

"I believe that still gives us plenty of leverage to work out a long-term fiscal plan, but it removes the threat of an immediate default," Collins said Friday.

Multiple Senate Republicans said the conversation with the president did not include the competing House proposal that would increase the debt ceiling for six weeks.

Republicans have also proposed a short-term stopgap spending bill to reopen the government after Obama rejected their proposal for only a debt ceiling increase.

Senate Republicans seem eager to resolve the impasse. Sen. John McCain, R-Ariz., cited a "devastating" NBC/WSJ polled released Thursday that showed the Republican Party's favorability at an all-time low. "I know that they're reading the polls," McCain said of House Republicans.

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Livingston touts budget cuts, loses Porsche keys

(PNI) Not helping his case … Rep. David Livingston, R-Peoria, joined the budget battle this past week by proposing his version. He's suggesting 5 percent across-the-board cuts from House Speaker Andy Tobin's proposed budget.

"Your family has cut. So should we be different?" Livingston asked via Twitter.

He also wants to separate the Medicaid expansion vote from the budget debate. Livingston is a staunch opponent of expansion.

But he didn't help his argument when shortly after announcing his proposal, he began asking for help finding his lost Porsche keys.

The state Democratic Partytook to mocking him via Twitter.

With sense of humor still intact, Livingston sent a tweet Friday morning to Democrats thanking them for their concern for his lost keys and announcing they'd been found. Now if only he could find votes for his budget …

Into the wild blue yonder…It's the kind of drama that crops up when time gets short and vote counts get tight: Fire up the state plane and rush a lawmaker back to the Capitol.

The Governor's Office was reportedly ready to do that last week, when it looked as if Rep. Sally Gonzales, D-Tucson, couldn't get to Phoenix fast enough for a Medicaid vote. She has been at home, as her brother is gravely ill. But like a good Dem, she wants to vote for Medicaid expansion, and Gov.Jan Brewer was willing to provide quick transport, if needed. If not the state plane, perhaps the state helicopter could be deployed to fetch Gonzales.

We'll see if the rapid transport will be needed this week, when a vote is (again) expected, if Gonzales' family situation continues to keep her at home.

The feds made me do it! …Congressman Trent Franks, R-Ariz., hates the federal Affordable Care Act, aka "Obamacare." So much so that he's signed onto a bill to repeal the part of the act that allows Medicaid expansion.

But in the vein of "hate the sin, love the sinner," he is casting no aspersions on Brewer for pushing the state to expand its health-care program for the poor.

"I refuse to offer any criticism whatsoever toward Governor Brewer or other Arizona elected officials for advocating a different position on the expansion component after being forced into an impossible conundrum by a totally irresponsible Federal Government," Franks said in a statement.

Given some of the harsh words directed the governor's way in the Medicaid debate, is it too much to think some legislative conservatives might follow Franks' lead?

Quote/tweet of the week

"It's go time."

--Rep. Warren Petersen, R-Gilbert, on the coming week, which should feature critical Medicaid and budget votes.

Compiled by Republic reporters Mary Jo Pitzl and Alia Beard Rau. Get the latest at politics.azcentral.com.

Copyright 2013 The Arizona Republic|azcentral.com. All rights reserved.For more information about reprints & permissions, visit our FAQ's. To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification. To view our corrections, go to corrections.usatoday.com.

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Obama’s Budget Revives Benefits as Divisive Issue

In the midterm races already taking shape, Democrats who back Mr. Obama’s budget proposals to trim future benefits as part of a long-term deficit-reduction compromise could be attacked from the left and the right.

Liberal groups and some union activists are threatening to recruit candidates to challenge these Democrats in their primaries. At the same time, the head of the House Republicans’ campaign committee gleefully signaled last week that he would use Mr. Obama’s “shocking attack on seniors” against Democrats in general-election races — though Republican Congressional leaders demanded the concessions from Mr. Obama. And while party leaders rebuked the campaign committee chief, Representative Greg Walden of Oregon, individual Republican candidates and “super PACs” would be free to wage their own attacks.

For now, at least, the political warnings to Democrats are coming mostly from the left of their own party.

“You cannot be a good Democrat and cut Social Security,” said Arshad Hasan, the executive director of Democracy for America, a liberal grass-roots group, which staged a small protest outside the White House last week even before Mr. Obama released his annual budget on Wednesday.

“People would be looking to punish them,” said Robert Borosage, a co-founder of the Campaign for America’s Future, another liberal group, “and they would be looking for primary challengers.”

Even if Democratic incumbents do not draw a primary challenger, liberal activists say, they might face a shortage of volunteers motivated enough to do the hard work of campaigning — just as Democrats did in the 2010 midterms, which resulted in big Republican gains.

Looking further ahead, to 2016, some on the left have already begun talking about encouraging a liberal Democrat — the freshman Senator Elizabeth Warren of Massachusetts is the name most bandied — to take up the “don’t touch Social Security or Medicare” banner as part of a liberal bid for the party’s nomination to succeed Mr. Obama, even against Hillary Rodham Clinton or Vice President Joseph R. Biden Jr.

Such talk was stoked when Ms. Warren, within hours of the release of the president’s budget on Wednesday, sent supporters an e-mail sounding an alarm: “Our Social Security system is critical to protecting middle-class families, and we cannot allow it to be dismantled inch by inch.”

She was not available for an interview, aides said on Friday.

“If the major candidates running for the Democratic nomination hedge on important issues like Social Security, they will leave open a tremendous amount of space for an insurgent,” said Adam Green, a co-founder of the Progressive Change Campaign Committee, a group often critical of Mr. Obama.

But, Mr. Green acknowledged, “I wouldn’t say anybody’s laying the groundwork yet.”

At a minimum, Mr. Borosage said, all Democratic candidates in 2014 or 2016 “will be forced to take a stand.”

That prospect could complicate the campaign strategies of establishment favorites. Mr. Biden is inevitably tied to Mr. Obama’s policies. And Mrs. Clinton, as a senator, was a fiscal moderate who extolled her husband’s budget-balancing record of compromise. President Bill Clinton negotiated Medicare savings with Congressional Republicans, and their 1997 deal nearly included the same proposal trimming Social Security cost-of-living increases that Mr. Obama has put in his budget to entice Republicans to compromise in turn.

Ideological litmus tests have lately been more divisive for Republicans than for Democrats, over taxes and social issues like abortion, same-sex marriage and immigration. But the agitation on the left to defend Social Security and Medicare, the two programs that Democrats consider perhaps their party’s greatest legacy, did not begin last week with Mr. Obama’s new budget.

It had been building since mid-2011, when the president, in private negotiations with Speaker John A. Boehner, tentatively agreed to the new formula for calculating cost-of-living adjustments in Social Security; economists recommend the formula as more accurate, but it would mean smaller increases for Social Security beneficiaries. Even so, Democrats in Congress and the White House agree that the party would have supported Mr. Obama back then if a compromise deal had come to a vote.

But the 2011 talks, just like a second round of negotiations in December, collapsed after Mr. Boehner declined to agree to Mr. Obama’s counterdemands: new taxes on the wealthy and on some corporations, and job-creating investments in infrastructure projects, research and education.

Sarah Wheaton contributed reporting.

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Senate Democrats Offer a Budget, Then the Amendments Fly

WASHINGTON — And on the 1,448th day without one, the Senate Democrats finally brought forth a budget, and Republicans saw that was good — but first, they made them pay.

After four years of hectoring Democrats to put their political and fiscal priorities to paper, Republicans got their wish on Friday and answered the effort with hundreds of amendments, some politically charged, others just odd, kicking off hours of laborious votes that sent the chamber into a marathon session just before spring recess.

There was the amendment thwarting regulations of greater and Gunnison sage grouse and eliminating funds to monitor the Utah prairie dog. In case a federal court ruling was not enough, Senator Ted Cruz, Republican of Texas, wanted to make sure money would be there to prevent the regulation of the size and quantity of food and beverage.

Senator David Vitter, Republican of Louisiana, stood vigil against any attempt by the United Nations to register American guns. Senator Rand Paul, Republican of Kentucky, went one better, demanding that the United States withdraw from the United Nations. Another amendment demanded that President Obama buy his health coverage on the new insurance exchanges being created under the new law. Still another would withhold the pay of the president’s budget director if he was ever late again with a White House budget. It was approved by voice vote, without opposition.

And even if any of those were to be adopted, none of them would have any force of law. “We all know this will come to naught. The House will pass a budget. We’ll pass a budget, and we’ll never agree on it. There’s a lot of folderol about it,” said Senator Tom Harkin, Democrat of Iowa.

“It’s a charade,” said Senator John McCain, Republican of Arizona.

After all the complaints about Democratic irresponsibility on the budget front, what unfolded Friday boiled down to spectacle, hundreds of amendments, all advisory only, and more tailored to the next campaign than to actual governance.

Even the name of the session — the “vote-orama” — belied how seriously senators take the exercise. “Can’t hide from the vote-orama,” trumpeted a statement by the National Republican Senatorial Committee, pretty much showing the whole point of it.

In truth, a Congressional budget accomplishes far less than advertised. It sets top-line limits for the Appropriations Committees to live within as they work on the real, binding spending bills, and it sometimes sets up fast-track procedures to consider changes to tax and entitlement laws. Even those two functions can happen only if the Senate and House can reconcile their budget plans, a long shot this year.

Beyond that, all the details hung onto the document are largely meaningless, ignored by the committees that actually draft legislation.

“Are there political games being played? Yes, there always will be,” said Senator Tom Coburn,  Republican of Oklahoma, who had filed 66 amendments by evening.

Senators signaled widespread frustration on Friday night by adopting a nonbinding amendment, 68-31, to scrap the current budget process and start writing budgets every other year.

Most lawmakers expressed relief that finally, after so many years, the Senate was working on a budget. Its plan stands in stark contrast to the House plan that passed on Thursday. It includes $100 billion for an upfront job-creation and infrastructure program, instructions to expedite an overhaul of the tax code that would raise $975 billion over 10 years and could not be filibustered, and spending cuts and interest savings that total $975 billion, by Democratic calculations, and $646 billion in increases, by Republican accounting.

Even by Democratic estimates, the Senate plan would still leave a deficit of $566 billion in 2023, while adding $5.2 trillion to the federal debt over the next decade. The House plan ostensibly comes to balance that year.

That discrepancy did not dampen the enthusiasm.

“We’re doing our jobs. We’re doing the process,” said Senator Amy Klobuchar, Democrat of Minnesota. “Our constituents are just so happy we’re moving forward on a budget.”

But such big numbers seemed almost beyond the point Friday, buried in a blizzard of meaningless amendments. The term “vote-orama” officially entered the Senate lexicon in 1977, according to the Senate historian’s office. By 2009, it had become ridiculous enough to prompt a hearing to demand changes. At that time, Democratic and Republican Budget Committee leaders lamented a process that had gone off the rails. In 2006, senators submitted 87 amendments. In 2007, there were 91, in 2008, 113.

This year, there were more than 500.

The main function of the vote-orama is to put senators on record on hot-button issues sure to show up in campaigns next year. Some votes were substantive, if nonbinding. On Friday evening, 62 senators — Republican and Democratic — voted in favor of building the Keystone XL pipeline. Democrats forced Republicans to vote on women’s access to employer-provided contraceptive coverage and to state whether they supported turning Medicare into a program that hands out vouchers for the purchase of private insurance. Republicans put almost all Democrats on the record opposing an amendment to block a carbon tax.

And though advisers to the Republican senatorial committee helped coordinate some of the amendments, the chairman of the campaign committee, Senator Jerry Moran of Kansas, was not at all sure the votes would make a bit of political difference.

“I think voting records matter,” he said. “But I also know the public hears explanations about votes from Republicans and Democrats, and it’s hard to sort out what it really means. In the world of all this political activity and buzz, voters throw up their hands, shake their heads and say: ‘All these people in Washington, D.C., are a bunch of politicians. I don’t know what to believe.’ ”

Jennifer Steinhauer contributed reporting.

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Senate Passes $3.7 Trillion Budget, Setting Up Contentious Negotiations

The 50-to-49 vote in the Senate, which is controlled by Democrats, sets up contentious — and potentially fruitless — negotiations with the Republican-controlled House in April to reconcile two vastly different plans for dealing with the nation’s economic and budgetary problems. No Republicans voted for the Senate plan, and four Democrats opposed it: Mark Pryor of Arkansas, Kay Hagan of North Carolina, Mark Begich of Alaska and Max Baucus of Montana. All four are from red states and are up for re-election in 2014.

“The Senate has passed a budget,” Senator Patty Murray of Washington, the Senate Budget Committee chairwoman, declared at 4:56 a.m.

The House plan ostensibly brings the government’s taxes and spending into balance by 2023 with cuts to domestic spending even below the levels of automatic across-the-board cuts roiling federal programs now, and it orders up dramatic and controversial changes to Medicare and the tax code.

The Senate plan, by contrast, includes $100 billion in upfront infrastructure spending to bolster the economy and calls for special fast-track rules to overhaul the tax code and raise $975 billion over 10 years in legislation that could not be filibustered. Even with that tax increase and prescribed spending cuts, the Senate plan would leave the government with a $566 billion annual deficit in 10 years, and $5.2 trillion in additional debt over that window.

“The first priority of the Senate budget is creating jobs and economic growth from the middle out, not the top down,” Ms. Murray said. “With an unemployment rate that remains stubbornly high, and a middle class that has seen their wages stagnate for far too long, we simply cannot afford any threats to our fragile recovery.”

Republicans were harshly dismissive of the Democrats’ priorities. “Honest people can disagree on policy, but where there can be no honest disagreement is the need to change our nation’s debt course,” said Senator Jeff Sessions of Alabama, the committee’s ranking Republican. “The singular truth that no one can escape is that the House budget changes our debt course while the Senate budget does not.”

Passage of the competing spending plans does advance a more orderly budget process after nearly three years of crises and brinkmanship. If House and Senate negotiators can agree on a framework for overhauling the tax code and entitlement programs like Medicare, Congress’s committees could go to work on detailed legislation, possibly under special rules that protect the bills from a Senate filibuster.

If the negotiations prove fruitless, the next budget crisis looms this summer when Congress must again raise the government’s statutory borrowing limit or risk defaulting on the federal debt. On Thursday, House Speaker John A. Boehner of Ohio revived a rule — breached in January — that any increase in the debt ceiling must be accompanied by equivalent spending cuts.

Final passage of the Senate budget was upstaged by the process that got the senators to it, a marathon session known since 1977 as the budget “vote-a-rama.” More than 500 amendments were filed, and 70 were voted on. Those numbers dwarf previous marathon voting sessions, reflecting pent-up Republican demand for votes and a new, uncompromising view of procedure on the part of Tea Party-backed senators.

The amendments were advisory only, but they put the Senate on record on a dizzying variety of subjects, including limiting the regulation of sage grouse, preventing the United Nations from infringing on Americans’ right to bear arms, repealing a tax on medical devices that helps finance the president’s health care law and building the Keystone XL pipeline.

By 4 a.m., the senators were sitting quietly in their seats, plowing through amendments like sleepy schoolchildren, breaking only to give the Senate pages a standing ovation and to grumble when a senator demanded a roll-call vote if a voice vote would suffice. As the senators recorded their final votes, they hastily left for a two-week spring recess.

But the sleepy bonhomie did not bridge the divide between the parties. Senate Republicans and Democrats could not even agree on what was in the Democratic budget. Ms. Murray said the plan matched its $975 billion in revenue increases with cuts and interest savings of equal size. But Republicans said it did not, since it reversed $1 trillion in across-the-board cuts but did not count that against their spending cuts.

Those differences did not lend themselves to much optimism about the coming budget negotiations. “The only good news is that the fiscal path the Democrats laid out in their budget resolution won’t become law,” said Senator Mitch McConnell of Kentucky, the Republican leader.

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Obama, Invoking Clinton, Says Romney Budget Doesn't Add Up

MELBOURNE, Fla. — President Obama, picking up where former President Bill Clinton left off, said Sunday that the budget proposals offered by Mitt Romney and Paul D. Ryan do not add up.

The president was quick to jump on appearances by his Republican rivals on the Sunday morning talk shows, in which they were asked separately what loopholes they would close to pay for their proposed tax cuts. Neither of the men answered the question.

The relationship between Mr. Obama and Mr. Clinton started off rocky — Mr. Obama, after all, ran against Hillary Clinton for the Democratic nomination in 2008. But after Mr. Clinton’s ringing endorsement of Mr. Obama in a well-received Democratic convention speech on Wednesday, the president mentioned his Democratic predecessor at every stop on a bus tour of Florida over the weekend.

“President Clinton told us the single thing missing from my opponents’ proposal was arithmetic,” Mr. Obama told a rally here, to a burst of applause.

“When my opponents were asked about it today,” Mr. Obama said, “it was like 2 plus 1 equals 5.”

On NBC’s “Meet The Press,” Mr. Romney did not answer several questions from the host, David Gregory, on which tax deductions he would seek to eliminate, saying only that he would target “some of the loopholes and deductions at the high end” while lowering the “burden on middle-income people.”

On the ABC News program “This Week,” Mr. Ryan said that “the best way to do this is to show the framework, show the outlines of these plans, and then to work with Congress.”

Mr. Clinton, at the Democratic National Convention, said the Romney-Ryan plan did not  add up. Since then, Mr. Obama has adopted that line on the stump, and he has reiterated it in almost all of his public remarks.

This post has been revised to reflect the following correction:

Correction: September 9, 2012

An earlier version of this post said incorrectly that former President Bill Clinton addressed the Democratic convention on Thursday. His speech was Wednesday.

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Exclusive: Democrats seek up to $3 trillion in budget savings (Reuters)

WASHINGTON (Reuters) – Democrats are proposing $2.5 trillion to $3 trillion in measures to reduce the budget deficit, including revenue increases and significant cuts to Medicare, congressional aides told Reuters.

The plan was unveiled on Tuesday at a closed-door meeting of a special 12-member congressional panel, the so-called "super committee" that is tasked with finding at least $1.2 trillion in deficit reduction over 10 years.

It was the first formal proposal by Democrats on the committee and is aimed at galvanizing talks that are quickly running up against a November 23 deadline.

The congressional aides did not say why Democrats were proposing such a big deal, but Democratic congressional leaders have repeatedly called on the committee to go beyond its mandate to fix the country's fiscal mess.

According to congressional sources, the plan includes a roughly equal mix of spending cuts and revenue increases; between $200 billion and $300 billion in new economic stimulus spending that would be paid for with lower interest payments from reducing deficits; and around $400 billion in Medicare savings, with half coming in benefit cuts and the other half in cuts to healthcare providers.

While sources portrayed the proposal as a Democratic plan, they also noted that at least one Democrat on the super committee, Representative James Clyburn, had reservations about the move to cut Medicare spending.

One of the congressional sources said Republicans on the committee did not react favorably to the Democratic plan.

Republicans have long been opposed to more economic stimulus spending and increasing revenues in deficit-reduction efforts.

(Editing by Sandra Maler)

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Congress delays budget fight until Monday (Reuters)

WASHINGTON (Reuters) – The Congress set the stage for another last-minute budget showdown as lawmakers delayed action on a broad spending bill until Monday, shortly before disaster relief funds will run out completely.

This time, the brinkmanship threatens to disrupt assistance to victims of floods, wildfires and other natural disasters in one of the most extreme years for weather in U.S. history.

That money could run out as soon as Tuesday, but Republicans and Democrats appeared no closer to a solution after a week of legislative maneuvering.

A billion-dollar dispute over an electric-vehicle program favored by Democrats is preventing Congress from passing a trillion-dollar bill that would replenish disaster funds and ensure the government keeps running past October 1, the start of the new fiscal year.

"Everyone, once in a while, needs a little cooling off," Senate Democratic Leader Harry Reid said. "We'll come here Monday and more reasonable heads will prevail."

Reid spoke after the Democratic-controlled Senate, by a vote of 59 to 36, rejected a version that had passed the Republican-led House of Representatives.

Lawmakers have tried to lower the temperature on Capitol Hill after a series of acrimonious budget battles rattled markets, spooked consumers and disgusted voters.

Still, the stark partisan divide over spending that has dominated Washington this year once again threatened Congress' ability to pass even the most basic legislation.

The bill in question would give the Federal Emergency Management Agency more disaster relief money and ensure that the government can continue operating while Congress debates a full 2012 budget.

Failure to act by then would force the government to suspend everything from space exploration to river dredging. It also would disrupt a flood-insurance program, delivering a further hammer blow to the troubled housing market.

ADDING TO UNCERTAINTY

Analysts and lawmakers said a government shutdown remains unlikely at this point as Congress now routinely resolves budget disputes at the last possible minute. But the wrangling adds further uncertainty to markets that are already on edge.

"Something like this is just a reminder of a lack of policy response by government, not only here in the U.S. but across the globe, in coming up with solutions to the financial and economic problems that we face," said Gary Pollack, managing director at Deutsche Bank Private Wealth Management.

Democrats and Republicans remained at odds over a $1.5 billion cut to an electric vehicle program championed by President Barack Obama.

Republicans proposed the cut to partially offset the added disaster costs to avoid adding to the nation's fiscal woes.

Democrats point out that Congress usually exempts disaster money from normal budget rules. They say the cut would threaten thousands of manufacturing jobs at a time when the country is struggling with 9.1 percent unemployment.

The Senate is scheduled to vote on Monday on a version of the bill that would restore the car loan program. The chamber's top Republican, Mitch McConnell, predicted it would fail.

The dispute throws into question lawmakers' ability to find common ground on the more painful choices they will have to confront in the coming months as a special bipartisan committee searches for trillions of dollars in budget savings.

"Any delay that occurs because of inaction in the Senate will only imperil needed disaster relief for these thousands of families all across our country," House Speaker John Boehner, the top Republican in Congress, said at a news conference.

Boehner has so far declined to give ground to Democrats as he seeks to control a rebellion from his party's conservative Tea Party faction, which is pressing for deeper spending cuts.

Democrats have shown an increased reluctance to compromise after a year of bruising budget battles has left their liberal supporters feeling like they have already given away too much.

Budget fights in Congress earlier this year pushed the government to the brink of a shutdown in April and the edge of default in August, leading to a cut in the country's top-notch AAA credit rating.

(Additional reporting by Donna Smith, Susan Cornwell and Thomas Ferraro in Washington and Karen Brettell, Rodrigo Campos and Richard Leong in New York; editing by Ross Colvin and Eric Walsh)

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California legislators prepare for budget vote (Reuters)

SACRAMENTO, California (Reuters) – California lawmakers prepared on Tuesday to approve a state budget that closes a nearly $10 billion shortfall a day after Governor Jerry Brown and top Democrats unveiled the package.

Democrats, eager to have a budget in place by the start of the new fiscal year on Friday, will be able to approve the entire package because they have majorities in both the state Senate and Assembly.

Brown and fellow Democrats closed the final $10 billion hole with a combination of rosy assumptions for $4 billion in additional revenue, additional cuts to state universities and welfare programs, and deferring payments to schools.

A pickup in the state economy, which still suffers from double-digit employment and a housing market bloated with foreclosures, is replenishing state coffers faster than hoped.

The plan is sound enough to let the state issue $5 billion in debt to cover normal summer cash shortages, the state treasurer's office said.

Votes on the plan are expected to begin at about 4 pm PDT.

But Marilyn Cohen, president of Envision Capital Management in Los Angeles, said the revenue expectation was risky and reminded her of the budget tricks Brown said he would avoid.

"I like to call it the Abracadabra budget," Cohen said. "Abracadabra and the $4 billion magically materializes."

A budget approved and enacted before the start of new fiscal years is a rarity in California, the most populous U.S. state and the biggest issuer in the $2.9 trillion U.S. municipal bond market.

California's budget politics are closely watched in the market, which some analysts say is primed for a wave of state and local government defaults.

Brown, who vetoed a spending plan from Democrats earlier in the month, abandoned his own proposal that the legislature set a referendum on tax extensions.

A measure to put tax extensions on the ballot would have required a handful of Republican votes to reach the two-thirds vote requirement in the legislature for tax issues.

Republicans had blocked tax extensions, prompting Brown to cease trying to win their votes and to partner with Democrats over the weekend to craft the budget package.

The package includes provisions of the Democratic budget he vetoed earlier this month, additional spending cuts, and relies on $4 billion in better-than-expected revenue to help plug the state budget gap. Education will face more cuts if the revenue does not come through.

(Reporting by Jim Christie in Sacramento, editing by Peter Henderson)

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When Conservatives Walk Out on Budget Talks, Democrats Win Eventually (ContributorNetwork)

COMMENTARY | Republicans walked out on a member of the president's staff after a budget meeting. Discussions revolve around massive debt, taxes and lots of public bickering. It's not the 1995 to 1996 budget battles between President Bill Clinton and a conservative Congress. It's a repeat of the same events 15 years later.

President Obama sent his wing man, Vice President Joe Biden, to talk to Republican leaders in Congress about what the president wants from the budget. According to the Associated Press, Biden said we need to raise taxes. Speaker of the House John Boehner said raising taxes was "off the table."

The GOP then walked out of the discussions abruptly.

This budget discussion can go one of two ways. Either the sides compromise or they don't. The GOP walking out is just a symbolic gesture to let the American public know how they feel about raising taxes. The Democrats still have the upper hand, as they control one side of Congress.

Clinton compromised on his budget proposals with Newt Gingrich and the GOP-led Congress. When Clinton got re-elected, the Republicans made him pay for his popularity. They filed articles of impeachment against him regarding a lie under oath about having sex.

If history serves, the Republicans and Democrats will bicker back and forth for weeks. The two sides will come together in crunch time and get the work done. There will be a combination of what both sides want. In the end, it won't be perfect, but both sides will say they accomplished a lot.

Obama clearly understands Clinton's position. He got re-elected after a budget battle but paid a price. Obama will surely try to compromise, but only after making Republicans sweat out a deal. Plus, the current commander-in-chief probably won't be having sex with interns any time soon.

Obama and his team have surely learned from recent events. There are fears of citizens having their benefits reduced or removed altogether. Obama played into this argument after his speech about bringing troops home from Afghanistan. The president said it's now time to focus on domestic issues, not wartime problems.

The Republicans want to make cuts. They didn't learn from the special congressional election in May when a Democrat defeated a Republican in a conservative-leaning area. Instead of the GOP placing fear in people's minds over "death panels," now the Democrats can make voters feel like their entitlements will be taken away if conservatives stay in power. Kathy Hochul used Medicare cuts to win against her GOP opponent, Jane Corwin, in upstate New York, according to ABC News.

A walk out by Republicans is no big deal. This is still a process, and the work will get done eventually before something drastic happens.

It's a win-win for the Democrats if they can parlay as much budget-cutting as possible until the 2013 session of Congress starts. By that time, the 2012 election would have decided who controls Congress after the next president is elected.

Who wins when Republicans walk out? The Democrats do eventually because the president owns veto power.

William Browning is a research librarian specializing in U.S. politics. Born in St. Louis, Browning is active in local politics and served as a campaign volunteer for President Barack Obama and Missouri Sen. Claire McCaskill.

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