Budget battle changes as some Republicans refuse cuts

WASHINGTON — Even by the standards of a Congress that has earned a reputation for dysfunction, this past week — the last before a long summer recess — set a mark for futility.

Republican leaders in the House had hoped to pass a bill providing money for several major government agencies. Instead, they halted the vote after a GOP campaign to reduce spending levels hit an unexpected roadblock: Rank-and-file Republicans refused to approve cuts in programs that home-state governors and mayors rely on to fix roads, streets and bridges.

Conservatives were stunned that their more moderate colleagues could not stomach the reductions they all had agreed to a few months ago as part of an austere Republican budget plan.

But other Republicans saw the revolt as inevitable: The budget slashing that has dominated GOP spending talks over much of the last year may have run its course, they said, suggesting that the time may have come to compromise with the White House.

“It might be a wake-up call,” Republican Sen. Johnny Isakson of Georgia, a soft-spoken grandfather and former Sunday school teacher, said as he rode the Senate subway back to his office. “We may have reached our point.”

If so, the nation’s best hope for avoiding a budget crisis and a possible government shutdown this fall may rest in the office of the low-key former real estate broker.

Isakson has assembled a group of like-minded GOP senators who have been meeting quietly with President Obama’s staff. They’ve been seeking a resolution to the budget stalemate that has preoccupied Washington all year and that threatens to create a new crisis soon after Congress returns to work in September.

Their private talks gained sudden currency with the failure late Wednesday of the spending bill covering government transportation, housing and community development programs. The revolt in the House sent Republican lawmakers home on a sour note, frustrated that they had weakened their hand heading into negotiations with the administration.

White House officials saw the House move as an opening. Budget director Sylvia Mathews Burwell called it an “inflection” point in the long-running budget debate because it showed that the low levels of spending called for in the Republican budget plan are not “workable.”

Congress has failed to pass any of the annual appropriations bills needed to fund government agencies. Because of that, when lawmakers return in September, they will have just nine workdays to devise a stopgap plan or risk a government shutdown Oct. 1 when the current funding bills expire.

“I understand the frustration that they’re dealing with,” House Speaker John A. Boehner (R-Ohio) said as lawmakers prepared to leave town. But he said the House would not agree to a higher level of overall spending or an end to the across-the-board budget cuts known as the sequester.

“I just want make clear: The sequestration is going to remain in effect until the president agrees to cuts and reforms that will allow us to remove it,” he said.

Democrats and the White House want to undo the $100 billion a year in sequester cuts, replacing them with a combination of smaller reductions and some new revenue. Republicans want to continue the cuts, but they also want to shift the burden away from defense-related spending, requiring even deeper cuts in domestic programs. That was the plan they signed on to in theory under the budget written in the spring by Rep. Paul D. Ryan (R-Wis.), the former vice presidential nominee.

The transportation and housing bill was the first look that many House members got at what those deeper domestic cuts would be like in practice. Many balked.

“Most of our members were looking at that, and they got jittery,” said Rep. Jack Kingston (R-Ga.), who said he would have voted for the reductions. “I think it makes it really difficult to move forward.”

In the Senate, the Democratic majority tried to pursue a compromise worked out with Sen. Susan Collins (R-Maine) that would have spared transportation from some of the steepest cuts.

But even as the House GOP splintered, Sen. Mitch McConnell, the Republican minority leader, led a filibuster to make sure the Senate would hold the line against increased spending.

“This is so absurd,” an exasperated Collins said after the vote. “I truly don’t know the path forward.”

Isakson says he hopes that talks he has hosted may provide that path. So far, however, the meetings in the Georgia senator’s office have not resolved the stalemate that lawmakers and the administration have been stuck in for months: Republicans want to cut the nation’s Medicare and Social Security retirement programs to reduce spending, while the White House prefers changes in the tax code to bolster revenue.

The group is pursuing a “grand bargain” that could end the cycle of crises for the next decade, but it is well aware that a shorter-term solution for the next year or so may be all that is in reach.

“Here’s a news flash: Washington is not particularly functional,” said Sen. Ron Johnson (R-Wis.) before the group met with Obama for an hour Thursday at the White House.

“I don’t think this is going to be solved by a 90-yard Hail Mary pass. I literally think this is going to be 3 1/2 yards and a cloud of dust.”

lisa.mascaro@latimes.com