JIM LEHRER: The clock continued to tick this evening toward a government shutdown. With a midnight Friday deadline now less than 30 hours away, President Obama met again with the main players.
NewsHour congressional correspondent Kwame Holman begins our coverage.
KWAME HOLMAN: For the third time in as many days, the president and vice president met at the White House with the Senate's top Democrat and the top Republican in the House.
Ninety minutes later, Senate Majority Leader Harry Reid and House Speaker John Boehner emerged to say only that there would be more talks.
REP. JOHN BOEHNER, R-Ohio, speaker of the House: We continue to have productive conversations. And you should all know they're -- they're polite, they're to the point.
But there is no agreement on a number. There's no agreement on the policy issues that are contained with this. We are continuing to work toward an agreement, because I do believe all of us sincerely believe that we can get to an agreement. But we are not there yet.
SEN. HARRY REID, D-Nev., Majority Leader: So, we're going to continue to work to get this done. It's not easy to do, but it's doable.
And, as I said, we don't have a lot of time to do that. We are going to get back here at 7:00, and we hope that, that time, when we come out, we will have something done. If not, we will, of course, have to look forward to a bad day tomorrow, which is a government shutdown.
KWAME HOLMAN: President Obama declined to comment on the status of the negotiations in his only public appearance of the day, a meeting with the president of Colombia.
The day's negotiations came after a Wednesday night session that produced public statements of narrow differences and progress. But the roadblocks include proposals by House Republicans to curb federal funding for Planned Parenthood and limit the authority of the Environmental Protection Agency to regulate greenhouse gases. Democrats firmly opposed both ideas.
The two sides also still were at odds over spending cuts, with Republicans said to be pushing for $39 billion, and Democrats offering about $5 billion less. With time running out on leaders to reach an agreement to fund the government through September, House Republicans moved ahead today with another short-term bill.
It would fund government operations for a week, but cut $12 billion from everything but the Defense Department, which would be funded for the rest of the fiscal year. But the bill also included policy changes on abortion and other issues, and the administration rejected it.
A White House statement said, "If presented with this bill, the president will veto it."
The number-two House Democrat, Steny Hoyer, said Republicans simply were trying to deflect blame if the government does shut down.
REP. STENY HOYER, D-Md., House minority whip: The president will not sign this bill. Why? Because you put in poison pills that you know are unacceptable to him. Why? So, you can get the votes on your side of the aisle to vote for your bill to keep the government open. Why is that difficult? Because so many of your folks, unless they get 100 percent, are prepared to shut down the government.
KWAME HOLMAN: Indiana Republican Mike Pence countered that it's the Democrats standing in the way of a compromise.
REP. MIKE PENCE, R-Ind.: We are going to pass this continuing resolution. We are going to fund our troops in harm's way and stationed all across the world and all across this nation.
And if Democrats here in Washington would rather play political games and shut down the government than support our troops, defend our treasury, and respect our values, than I say, shut it down. And I'm certain the American people are going to know who to blame.
KWAME HOLMAN: The one-week extension passed on a mostly party-line vote, but it appeared to have little chance in the Senate. The president already has signed two stopgap funding bills, including a total of $10 billion in spending cuts. He has said he would accept another short-term measure, so long as no policy provisions are attached.
JIM LEHRER: And to two reporters who have been covering various aspects of this story, Naftali Bendavid, congressional correspondent for The Wall Street Journal, and Ed O'Keefe of The Washington Post.
Naftali, how close are we to a -- in the real world, to a shutdown, do you think, right now?
NAFTALI BENDAVID, The Wall Street Journal: Well, it seems like we're pretty close. I mean, as you know, the deadline is midnight on Friday.
And just to give you a sense, the two sides right now can't even agree on what it is that they disagree on. The Democrats are saying that it's these abortion restrictions and these restrictions on clean air regulations that are standing in the way, and if we could just get rid of those, we would have a deal.
But the Republicans, and Speaker Boehner in particular, are saying that there are much broader disagreements, that nothing is settled until everything is settled.
And, so for now, we can't even agree on what the sticking points are. Having said that, there's a certain dynamic where, sometimes, leaders feel like they have to go to the brink just to show their own followers that they have done everything they possibly can to win things for their side. So, it's possible still that, tonight or tomorrow, they will pull a rabbit out of a hat, but there's no question that they're playing with fire and cutting it very close.
JIM LEHRER: What is -- if you had to state it simply, what is the Democratic argument and the Republican argument in each case?
NAFTALI BENDAVID: Well, the Democratic argument is that if the Republicans wouldn't keep insisting on introducing ideology, in the form of abortion restrictions and clean air regulations, then, you know, this wouldn't even really be a problem.
But, you know, the Republican position is, look, we had an election in November. It showed that people want huge cuts in government spending. The Democrats are refusing to go along with that, and that's the problem.
And, again, the Democrats say it's the Republicans who are being reckless and want to slash government in all kinds of terrible ways. So, we're seeing some real ideological differences. We're always seeing, in some ways, the results of last November's election coming home to roost in a way that we haven't really seen before.
JIM LEHRER: Now, when they say, well, we can continue to talk and continue to negotiate, it -- you're -- you're also saying these -- if there are ideological differences, it's really hard to negotiate ideological differences away, correct?
NAFTALI BENDAVID: Absolutely.
You know, it's one thing to talk about funding, where there's a certain age-old principle that you can sort of split the difference. If one side wants zero and the other side wants $60 billion in cuts, you end up with $30 billion in cuts. That doesn't always happen, but at least that's the basis for some kind of an agreement.
But when it comes to something like whether or not abortion should be restricted, I think people's views are so different, that it's hard to reach an agreement. And this is one thing the Democrats are saying. They're saying, look, this argument should be about money. That's what this is about. It's a spending bill. Let's stick to that. Let's not bring in these broader issues.
But the Republicans really don't see it that way. I mean, they see it as, how the money is spent is an important part of what we're talking about here, and if they don't want money spent on abortion, then that's a very legitimate thing to be pushing for.
So, yes, there's a certain difference in world view here that I think is one of the reasons this has proven so difficult to overcome.
JIM LEHRER: All right, now, Ed O'Keefe, what actually would happen at the stroke of midnight tomorrow night if in fact no agreement is reached and there is a shutdown?
ED O'KEEFE, The Washington Post: Well, let's start with here in Washington.
The National Mall and all of its monuments would close. The Smithsonian Institution museums and the National Zoo would shutter. Same goes for national parks and landmarks all across the country, from the Statue of Liberty, to Alcatraz, to Independence Hall, to Yellowstone National Park.
Pay, if this continues, for federal workers and troops would be delayed, even though they'd keep earning paychecks. And then, of course, there's the question of whether or not you're an essential or nonessential federal employee. It's expected that about 800,000 federal workers would be furloughed if this continues into Monday.
They live all across the country and work for just about every government agency. But, you know, hundreds of thousands, millions more would actually stay on the job because they have essential positions, mostly related to national security, to some economic security issues. And, of course, the troops would continue fighting overseas and on their bases here in the United States.
So, all sorts of widespread concerns. And, of course, the longer this goes on, the greater the uncertainty, NASA saying today that it could potentially delay the launch of the space shuttle Endeavour. There will be problems with tax refunds, especially for those who filed on paper.
The State Department won't issue passports, unless it's an absolute emergency situation, and there will be all sorts of other examples across the bureaucracy.
JIM LEHRER: Now, who makes the decisions? Who made the decision -- who made the decision, OK, we're going to close the Smithsonian museums, and we're going to close the national parks? Is that done for public consumption reasons, or is that mandated somewhere?
ED O'KEEFE: It is mandated somewhere. It dates back to memos that were started in the final days of Jimmy Carter's presidency and refined a bit during the Reagan and Clinton administrations.
And they basically say that essential government functions have something to do with national security and the protection of life and property. So, if you take that as your basic legal principle, that means TSA agents will still screen bags at the airports, air-traffic controllers will still guard the skies. You will see Veterans Affairs hospitals still open and a host of other essential duties across the government.
But a nonessential thing that doesn't match that description is something like a national park, the National Mall, the zoo, community outreach to crime victims at the Justice Department, and all sorts of other examples.
JIM LEHRER: What happens to the nonessentials who would be furloughed? Do they lose pay forever, or are they eventually paid, if -- assuming the shutdown eventually goes away?
ED O'KEEFE: Well, and we should hope that a shutdown would eventually go away.
ED O'KEEFE: That's a big unknown question. Back in 1995 and 1996, during those two shutdowns, all workers, whether they worked or not, did earn retroactive pay.
But Democratic lawmakers and federal worker union leaders are warning that, with a more fiscally conservative Congress in place, there's a possibility that those that are furloughed, those 8000,000, wouldn't necessarily get back pay.
And we have to point out something very important, Jim, I think.
JIM LEHRER: OK.
ED O'KEEFE: The troops, those fighting in Iraq and Afghanistan, those flying over Libya, those stationed in South Korea and Europe, they will be paid for this week. But Friday is the middle of a two-week pay period.
Troops in uniform serving in battle will not necessarily receive paychecks on time if a shutdown begins. And that's causing a lot of concern for military families across the country, Secretary Gates today in Iraq saying he doesn't like this. He's hoping that, if only for that reason, a shutdown is avoided.
But troops will receive pay for this week. Anything after this is a big open question. They will eventually be repaid once a shutdown is over.
JIM LEHRER: Now, to bring in Naftali back into this, both of you now, starting with you, Naftali, all of this, the politics of this are enormous. And flip a coin? If this in fact -- if the scenario that Ed just outlined actually happens, who pays the political price?
NAFTALI BENDAVID: Well, you're right. There's enormous political brinkmanship going on here.
Both parties are afraid of this. They know that the situation would be volatile, that voters would be very angry if the government closed, not simply because they care about these government functions, but because it would be such a display of incompetence on the part of Congress that there would be some kind of backlash.
Polls suggest that both parties would share the blame, but the fact is that, privately, both sides believe that Republicans would get a little bit more of the blame than Democrats. Partly, I think that's because of what happened last the government shut down, in '95 and '96, when Newt Gingrich suffered a whole lot more than Bill Clinton.
And part of it is, I think, an overall sense that Republicans are more critical of government. They talk all the time about cutting government, slashing government. And so there's a sense that, if the government shuts down, maybe it's something that they wanted more than the Democrats.
But, really, the key thing here is that it's volatile. Nobody knows how it would play out. Both sides are really worried about it.
JIM LEHRER: Yes.
What would you add to that, Ed?
ED O'KEEFE: I would say that, you know, I think you're going to see all sorts of different things happen if a shutdown begins.
And I'm very curious to see whether or not Americans sort of shrug their shoulders and say, well, maybe we can do without that, or whether there will be real outrage. I mean, the fact that tax day is approaching, for example, on April 18, what's to say that some taxpayers will say, hold on a second, if the government isn't operating, why should I pay my taxes?
You know, you might see other examples, I think, for example, the passport situation. Not only is that potentially a problem for Joe and Jill traveler, but with people -- business travelers trying to get around the world and renew passports, that could become a problem.
E-Verify is an example of something that is used by, you know, businesses to verify immigration status. If you're holding up the functions of the economy, which this will do, I think you're going to see a real impact, not only politically, but potentially economically.
The fact that 800,000 federal workers are going to be furloughed across the country -- remember, most of them are outside Washington, D.C. -- if you're a, you know, lone-earning paycheck -- if you're the only person earning a paycheck in your family, and your family is living paycheck to paycheck, you are going to feel the impact of that, and they will be sure to blame both the president and Congress, most likely.
JIM LEHRER: And the economic issue has been raised, particularly by President Obama, because he has said that this would hurt the economy, which was beginning to recover.
Is that just -- are those just words in an argument, or is it -- can that be proven?
ED O'KEEFE: Well, if you look at the fact that the Federal Housing Administration will have to withhold giving loan guarantees to people trying to buy their first homes with FHA loans, that the Small Business Administration is going to withhold small business loans, that the IRS isn't going to pay out refunds to people who filed by sending it in the mail, yes, it's going to have an immediate and potential real-world economic impact.
JIM LEHRER: This is more than about ideology, finally, then, isn't it, Naftali?
NAFTALI BENDAVID: Well, it really is. And it's actually, I think, two million people that wouldn't be getting their paychecks, because both the people furloughed and the people not furloughed wouldn't be getting their money.
ED O'KEEFE: Exactly.
NAFTALI BENDAVID: And this is a very fragile moment in the recovery.
And so I think, when President Obama makes his point, he is making it for a political reason, to say that the shutdown shouldn't occur. But I think there's some very clear real-world impact that this would have. I mean, I don't think people are going to shrug their shoulders if the government shuts down.
I think that experience has shown that they would be outraged, they would be frustrated, partly because of things like getting their passports, which was a real problem last time for the travel industry, for people who wanted to go places. But also again just because of this idea that, look, we elect these people. We send them to Washington. They can't even get themselves together on something as basic as how to fund the government.
That's their job. And I think people feel very upset if they can't manage to pull that off.
JIM LEHRER: And would it be fair to say that all 535 members of the Congress of the United States know everything that you two men have just been talking about?
NAFTALI BENDAVID: Absolutely.
One of the amazing things about this is the way that they're walking steadily toward this cliff...
NAFTALI BENDAVID: ... even though they know that it's right there.
JIM LEHRER: Yes.
NAFTALI BENDAVID: And both sides are maneuvering like crazy to make sure the blame goes to the other side, should be there a shutdown.
But they really know that they can't escape it entirely themselves. And it's a really curious part of this dynamic that, despite that, they each have these political imperatives that are making it hard to compromise.
JIM LEHRER: OK.
NAFTALI BENDAVID: Again, something could still happen by tomorrow night, but, right now, it just doesn't look that good.
JIM LEHRER: All right.
Gentlemen, thank you both very much.
ED O'KEEFE: Great to be with you.
NAFTALI BENDAVID: Thank you.
JUDY WOODRUFF: Our coverage of the ongoing budget negotiations will continue on our website tonight. That's NewsHour.PBS.org.