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Republican senator says Federal budget talks have hit snag


WASHINGTON (Reuters) — The panel of U.S. lawmakers seeking to craft a bipartisan budget deal is in a deadlock early in its deliberations, according to a Senate member, reinforcing fears that a Dec. 13 deadline could produce no agreement.

Republican Senator Lindsey Graham told Reuters the negotiations were "stuck, not irreconcilably, but stuck."

Nearly one month ago, Congress created the House of Representatives-Senate working group as part of a deal that reopened the federal government following a 16-day shutdown and raised U.S. borrowing authority to avoid a potential default.

The panel's purpose, in part, is to restore some order to the federal budget process and stop lurching from one temporary funding crisis to another, each of which carries the risk of a government shutdown.

The deadlock described by Graham would be no surprise. Because of deep differences in priorities between Republicans and Democrats, the 29-member "conference committee" started work on Oct. 30 with low expectations.

Many Democrats and Republicans hope at least to replace or adjust the large and indiscriminate across-the-board spending cuts-known as the "sequester" - which have wreaked havoc with the budgets of federal agencies, particularly the Defense Department.

Graham, in a brief hallway interview in the Capitol, complained that Democrats on the panel insist on replacing some of those spending cuts with new revenues, thus trying to "bust" current limits on spending.

"Republicans are saying, how about some vetted entitlement reform? We're not going to replace spending cuts with revenue, so we're stuck," Graham said.

The South Carolina senator said that the White House is "more open-minded" about finding some savings to "entitlement programs," which normally refers mostly to Social Security, Medicare and Medicaid retirement and healthcare programs for the elderly and disabled.

"Frankly, I think the White House is in a much more reasonable place about some small entitlement changes" to replace some of the automatic spending cuts, Graham said.

Even though President Barack Obama's involvement in past deficit-reduction battles has stirred up Tea Party resentment, Graham said it would be helpful if the White House publicly came forward with some proposals to advance the budget talks in Congress.

"I think the president leading on an issue like this would be quite helpful," Graham said.

Besides the Dec. 13 deadline for the committee to finish its work, Congress faces a Jan. 15 date when current funding runs out for many federal programs, as well as a Feb. 7 deadline for again raising Treasury's borrowing authority.

Wisconsin Senator Ron Johnson, a Republican, expressed frustration on Wednesday with the insistence by Democrats on higher tax revenue as part of any deal to cut spending.

"They're denying the reality that they're not going to get a tax increase," said Johnson, who is a member of the budget panel.

Senate Budget Committee Chairwoman Patty Murray, the panel's Democratic leader, declined to comment on the status of the talks, saying that an agenda for the next public meetings on Nov. 13 had not yet been announced.

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