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Surprise! Budget mess rolls on

April 19, 2012: 11:30 AM ET

Congress and the White House took another few steps away from conducting a well-reasoned, bipartisan budget process on Wednesday, as Democrats and Republicans let loose another round of ultimatums and rhetorical bombs.

Let's start with the battle between House Republicans and the White House. Last year, with just hours to spare before a voluntary default on the nation's debt, Congress passed a piece of legislation called the Budget Control Act.

Along with raising the debt ceiling, the law capped spending levels at $1.047 trillion for fiscal year 2013.

Democrats don't want to spend below this level. Republicans -- naturally -- disagree. They say the number is a ceiling, not a level up to which Congress must spend.

In March, the House GOP acted on this belief, putting out a budget proposal that would set discretionary spending at $1.028 trillion, or $19 billion less than the $1.047 trillion cap set in last summer's budget deal. The bill passed the House, but never stood a chance in the Senate.

Enter the White House. The acting director of the Office of Management and Budget -- he works for the president -- said Wednesday in a letter to Hal Rogers, the Republican chairman of the House Appropriations Committee, that the president will not sign any spending bills that cut below the original cap.

Jeffrey Zients, the OMB official, told Rogers that the House budget resolution "breaks our bipartisan agreement" and is not acceptable. "Until the House of Representatives indicates that it will abide by last summer's agreement, the president will not be able to sign any appropriations bills." (Read the letter here)

Meanwhile, back on Capitol Hill, Democratic budget guru Sen. Kent Conrad tried try to revive the so-called Bowles-Simpson plan as a starting point in negotiations over a long-term debt-reduction plan. But his colleagues across the aisle were less than thrilled.

Bowles-Simpson is generally recognized as the most likely vehicle for a "grand bargain" debt reduction deal. But until the political dynamic on Capitol Hill changes, little progress on fiscal matters is likely to be made.

"It is fairly obvious that no legislative action of any significance is going to occur prior to the election," former Sen. Judd Gregg wrote earlier this week in The Hill. "This is typical in a presidential year, but this year the forces for staying in neutral appear to be even stronger."

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About This Author
Charles Riley
Charles Riley
Reporter, CNNMoney

Charles Riley lives and works in Hong Kong, where he covers markets, economics and other high-impact stories across Asia. He previously worked for CNNMoney in New York and CNN in Washington. He tweets @CRrileyCNN

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