Instead of passing a budget for fiscal 2011 last year, Congress passed a continuing resolution that will keep the federal government running until March 4. As that date approaches, however, legislators are no closer to reaching agreement on a continuing resolution for the balance of the fiscal year. If no agreement is reached by March 4, the federal government will face a shutdown.

The reason Congressional Democrats and Republicans haven't reached a compromise yet to keep the government operating is spending levels. Just last week, the GOP-led House passed legislation to cut spending by $60 billion. So far, the Democratic-led Senate has refused to agree to these cuts, and President Obama has threatened to veto any such legislation. Democratic leaders, especially President Obama, have been pushing to keep spending frozen at 2010 levels for five years. In addition, Democrats point out that negotiations over continuing resolutions have never been used to cut spending, there is no reason to start a new precedent now. They would prefer to have any cuts wait for a bill focused on longer-term spending.

Glimmers of Hope

Despite this public stalemate, Congressional leaders of both parties have been hinting at the details of negotiations taking place behind closed doors. While publicly leaders of both parties believe they could emerge victorious from the political fallout if a government shutdown does occur, Republican leaders do not want a repeat of what happened in late 1995 to early 1996, when political fighting over the budget led to a government shutdown during President Clinton's first term. While Speaker of the House Newt Gingrich believed he would win the public relations battle over the shutdown, Clinton successfully pinned the blame on Gingrich before going on to win re-election. Republicans don't want that bit of history to repeat itself.

Speaker John Boehner (R-OH) has been meeting with freshman in the House Republican caucus to convince them that the continuing resolution is necessary to keep the government running, even though it likely will not include $60 billion in cuts. Although Senate Majority Leader Harry Reid (D-NV) has publicly refused to accept further spending cuts this year, other leading Democratic senators have hinted that they are flexible on this issue.

Speaker Boehner, along with Majority Leader Eric Cantor (R-VA) and Republican Whip Kevin McCarthy (R-CA), held a meeting last Friday with more than 70 freshman House Republicans to encourage them to accept less ambitious cuts. Some of the freshmen, such as Representatives Tim Scott (R-SC) and Raul Labrador (R-ID), have said they are open to compromise, but only up to a point; they believe the government cannot operate indefinitely on continuing resolutions without a wider agreement on spending.

The White House has also been involved in trying to reach a compromise. Chief of Staff Bill Daley had dinner with Boehner last week, although Senate Minority Leader Mitch McConnell (R-KY) said that, as of Monday, the White House had not reached out to him.

A final wrinkle preventing a deal from coming together: the Senate is in recess this week. Representative Ann Marie Buerkle (R-NY), however, has called for senators to work on drafting legislation this week instead of waiting until the end of the recess. In a statement released yesterday, Representative Buerkle said, "I understand that today is Presidents' Day, but why not start work this Tuesday instead of waiting another week to get the Continuing Resolution enacted. We are about to hit the 'fiscal wall', yet the Senate is in recess."

If Congressional leaders are able to reach a compromise and pass a continuing resolution to keep the lights on, the funding would keep the federal government running until October 1, the start of the new fiscal year.

President Obama Awards Presidential Medal of Freedom

President Obama last week presented the Presidential Medal of Freedom to a select number of prominent individuals, including former President George H. W. Bush. The Presidential Medal of Freedom is the highest honor a civilian can receive in the United States. In his remarks upon presenting the awards, President Obama said, "We honor George Herbert Walker Bush for service to America that spanned nearly 70 years. From a decorated Navy pilot who nearly gave his life in World War II to U.S. ambassador to the United Nations; from CIA director to U.S. envoy to China to the vice presidency -- his life is a testament that public service is a noble calling."

Representative John Lewis (D-GA) also was honored, both for his work during the Civil Rights Movement and as a member of Congress. German Chancellor Angela Merkel was recognized for being "the first East German -- and the first woman -- to become chancellor of Germany." Investor Warren Buffet received the medal in recognition of his contributions in business and philanthropy. Gerda Weissmann Klein, a Holocaust survivor, received the award for her role in founding and running the "Gerda and Kurt Klein Foundation to promote tolerance, respect and empowerment of students throughout the world." Sylvia Mendez, whose victory in the legal case Mendez v. Westminster ended legal segregation in California, also was a recipient. Jean Kennedy Smith received the award for her work with disabled children and for pushing for peace in Northern Ireland. Labor leader John Sweeney was recognized for his time as a former president of both the Service Employees International Union and the AFL-CIO.

Three noted artists, the poet Dr. Maya Angelou, the cellist Yo-Yo Ma and the painter Jasper Johns, also were presented with the award for their contributions to the arts. They were joined by former professional athletes Stan Musial, who a St. Louis Cardinals outfielder, and Bill Russell, former Boston Celtics center. Thomas Emmett Little received the award posthumously for his work as a doctor in Afghanistan from the 1970s until his murder in 2010. His wife, Elizabeth Little, received the award on his behalf.