US Congress works on funding to avoid shutdown

WASHINGTON (AP) — Washington's gridlock appears to have eased just enough to avoid a shutdown of the federal government, but its budget battles are far from over.

Congress is finally poised to pass a bipartisan funding bill that will clean up its unfinished business for the long-underway 2013 budget year. The Senate, controlled by Democrats, is expected to approve the catchall spending bill Tuesday.

The Republican-held House of Representatives, which has already passed its own version, is then expected to quickly clear the measure and ship it to President Barack Obama for his signature.

Passage of the huge spending measure would merely end the fight over the annual spending bills required to fund federal government operations. That would allow Congress to turn away from the current budget year and resume partisan battling over future spending.

The House and Senate are gearing up for votes this week on sharply different budget blueprints for next year and beyond. The annual ritual is meant to lay out each party's stance on federal spending.

The rival House and Senate budgets for the future are party-defining documents that won't become law as written, with Washington as divided as ever over how to rein in deficit spending without hurting the economy.

The House budget measure promises a balanced budget by the end of a decade with spending cuts alone. The Senate budget would mix spending cuts and tax hikes. It would leave significantly larger deficits but stabilize the national debt as a share of the economy, a measure that economists say is essential to avoiding a debt crisis like Greece and other European nations have experienced.

The U.S. debt is now at $16.6 trillion. The Treasury Department has indicated that the annual deficit, at least, is starting to shrink. Higher taxes and an improving economy are expected to hold the deficit below $1 trillion for the first time since Obama took office.

Budget negotiations will be complicated by $85 billion in annual across-the-board spending cuts that are slamming both the military and domestic agencies.

The automatic budget cuts — the so-called sequester — were designed to be so crude that they would force both sides to reach a long-term spending agreement. But no deal was reached and they were triggered on March 1.

The spending cuts are set to continue through the decade, leaving the government with no flexibility in implementing them. Both parties agree that is bad policy.

Despite Washington's failure to reach a lasting deal, Obama hasn't given up on a so-called bargain. The president has continued talks with Republicans, even making a rare visit last week to Congress.

Obama has indicated he is willing to reduce spending on big entitlement programs— traditionally a taboo among Democrats — in exchange for raising taxes by closing loopholes in the tax code.

Republicans oppose any more tax increases. They say Democrats got their way with hikes on the wealthy in the New Year's Day "fiscal cliff" deal that prevented income tax increases for most people.