Congress, Federal Budget | featured news

President Obama told congressional leaders Tuesday that he is extending a two-year pay freeze for federal employees until at least next spring because Congress has not agreed on a budget for the next fiscal year.

Republicans are ready to ram through the House an election-year, $3.5 trillion budget that showcases their deficit-cutting plan for revamping Medicare and slicing everything from food stamps to transportation while rejecting President Barack Obama's call to raise taxes on the rich....

Despite discomfort in the Republican ranks, House and Senate negotiators reached a deal in principle early Thursday to extend a payroll tax break, continue unemployment benefits and ensure that Medicare doctors do not get a pay cut this year.

In a sharp turnaround, House Republican leaders Monday dropped a key demand that the cost of extending the payroll tax cut be offset by spending cuts elsewhere in the budget.

Congressional Republicans rejected President Obama’s $3.8 trillion spending outline as nothing more than a political document meant to guide his reelection campaign while putting off any of the tough decisions about ballooning red ink until after the voters have cast their ballots.

It's just about over for a special deficit-reduction supercommittee, which appears set to admit failure today in its quest to sop up at least $1.2 trillion in government red ink over the coming decade. The bipartisan 12-member panel is sputtering to a close after two months of talks in which key members and top congressional leaders never got close to bridging a fundamental divide over how much to raise taxes. The budget deficit forced the government to borrow 36 cents of every dollar it spent last year.

This is what a smaller government will look like: There will be less money for local cops, but more money for FBI agents. Less to repair public-housing complexes. More to feed hungry children. There will be less to fix polluted rivers. But more to fix crowded prisons.

The House of Representatives on Tuesday passed a bill that puts the government on stable financial footing for six weeks but does nothing to resolve a battle over spending that is likely to flare again.

The legislation will finance the government for the first four days of October, until lawmakers return and can vote on a more ambitious seven-week spending bill.

The Senate gave final approval Tuesday to legislation to raise the nation's debt limit by $2.4 trillion while cutting federal deficits, sending President Obama a hard-fought bipartisan package he was expected to swiftly sign into law.