Federal Budget | featured news

President Obama signed a spending bill Tuesday that headed off a government shutdown.

The wrangling of President Barack Obama and congressional Republicans over the federal budget underscores a clash of core philosophies about how the economy works that supersedes any skirmish on taxes or spending cuts.

Congressional Democrats and Republicans appeared far apart Sunday on a deal to avert $85 billion in federal spending reductions next month, with a top House Republican saying the cuts appear “inevitable.” The automatic cuts, known as sequester, kick in March 1 because the parties have failed to agree on a less-drastic plan to cut the federal budget and deficit.

The Pentagon has begun laying off most of its 46,000 temporary and term employees and cutting maintenance on ships and aircraft in an effort to slow spending due to fears of new defense budget cuts, Deputy Defense Secretary Ashton Carter said on Friday.

A senior lawmaker said on Sunday that he and fellow Senate Democrats, for the first time more than in three years, intend to meet Republican demands to finally pass a U.S. budget.

Democrats and Republicans say signs of progress are emerging in urgent negotiations to avert the looming `fiscal cliff' ahead of a midnight deadline.

The Republicans used their Saturday radio address to pressure President Obama over possible defense cuts.

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.

Rep. Ann Marie Buerkle (R-N.Y.) is exasperated as she concludes her opening remarks and reaches for a piece of paper on the podium. “I don’t know who was handing out this literature,” she says, “but I think we’ve got to talk about this a little bit.”

"In another attempt to re-fight the battles of the past, one former Bush administration official is wrongly claiming that some of the savings in the Affordable Care Act are 'double-counted' and that the law actually increases the deficit," said Jeanne Lambrew, a deputy assistant to the president for health policy. "This claim is false."