US faces new shutdown threat as budget talks stall

US lawmakers said Tuesday a new budget stalemate over funding for disaster relief could lead to a government shutdown if an agreement is not reached by the end of the fiscal year September 30.

The latest bone of contention comes over aid for recovery for states hit by Hurricane Irene and subsequent flooding.

Republicans have said any new relief funds should be offset by cuts in other services, and also want some of the funds to be put into the 2012 fiscal year which begins October 1.

Senate Majority Leader Harry Reid, a Democrat, said he was not persuaded by comments from some Republicans that they would avert a shutdown, saying the Republican-led House of Representatives may take a hard line.

"I'm not that sure (that a shutdown will be averted), because the Tea Party-driven House of Representatives has been so unreasonable in the past, I don't know why they should suddenly be reasonable," Reid said.

The Senate has approved the release of $6.9 billion for disaster relief included in the budgets for fiscal 2011 and 2012.

But in the House, the Republican leadership is working toward approval of $1 billion for the current year and $2.6 billion for fiscal 2012.

House Majority Leader Eric Cantor said the Senate leadership is the cause of the stalemate.

"There is nothing but politics involved if Harry Reid wants to go and play these games," Cantor said. "We are delivering the monies that are needed. We are twice what is requested from the emergency standpoint." He noted that President Barack Obama has requested $500 million in emergency funds.

Cantor said that if the government is forced to curtail services, "it will be on Leader Reid's shoulders, because he's the one playing politics with it. No one wants to stand in the way of disaster relief monies that are needed."

Reid said lawmakers should keep working to avert a shutdown despite a planned recess next week.

"We are not going to back down. Remember, the government doesn't shut down on Thursday or Friday," he said.

"If they want to stay into next week, that's fine. We can do that. Next week, we can work all next week. Government doesn't shut down until -- I think it's a week from Saturday."

The latest stalemate comes just weeks after a bruising political debate overbudget cuts and the raising of the US debt ceiling, with a shutdown narrowly averted after the White House and lawmakers agreed to create a "supercommittee" to examine deep cuts.
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