Emergency budget passed but Congress still divided on cuts

AMERICAN politicians have averted a threatened government shut-down by approving a stop-gap budget, but failed to stave off a looming row over spending cuts.

Ahead of a deadline yesterday, the Senate gave the green light to an additional $6 billion (about 3.7bn) in reductions in a move that extends funding for programmes until 8 April.

But growing disquiet from conservatives in Congress may mean party leaders face an uphill battle in agreeing a longer-term solution to the problem.

Republican and Democrat positions are still $50bn apart in terms of what they want to strip from a budget that last year topped $1 trillion.

Both sides have said they want the latest stop-gap measure to be the last. It leaves them with just three weeks to find a compromise to see them to the end of the fiscal year in September.

If none is found, it could see a number of programmes - including some health and education services - grind to a halt.

The White House has said it is "optimistic" that a solution to the mess can be found. But politicians on both sides seem unwilling to give ground.

Republicans, under pressure from the growing Tea Party conservative grass roots movement are calling for major cuts from last year's $1.3 trillion discretionary budget.

Meanwhile, Democrats would be loath to concede ground if it meant slashing money for cherished programmes such as Medicare and Medicaid, which provide health insurance coverage to the elderly and poor.

The scale of the problem facing party negotiators was clear in the passing of the latest stop-gap spending bill.

In both the Senate and the House of Representatives the measure was approved, but begrudgingly and with increased opposition from conservatives.

In the House, 54 Republicans voted against it, with 13 joining them in the Senate.

The result raises the prospect of a split in Republican ranks that could make it difficult for party leaders to push through an agreement.

The divide is also an indication of the problem the Republicans could face as the party gears up to find a presidential nominee. Some Democrats in Washington are openly exploiting the split between Tea Party-backed Republicans and less conservative members.

Senator Chuck Schumer, a New York Democrat, said in light of the vote: "It's clear that there is no path to compromise that goes through the Tea Party.

"We urge House Speaker John Boehner to push ahead without them.We are ready to work with him if he is willing to buck the extreme elements of his party."

Mr Boehner has ratcheted up the pressure on Democrats to find greater cuts following the latest short-term measure.

He called for an end to the "spending binge in Washington", adding that cuts in the stop-gap bill went "nowhere close to what is needed" and would not be adequate for a long-term bill to see the budget through to the end of the fiscal year.

Barack Obama signed the bill into law yesterday ahead of five-day tour of Brazil, Chile and El Salvador, his first presidential visit to South America.