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Obama, Congress to kick off U.S. budget negotiations

WASHINGTON (Reuters) – Congressional Republican leaders and the White House will launch negotiations soon on a two-year budget deal that would establish new limits for U.S. government spending in 2016 and 2017, Senate Majority Leader Mitch McConnell said on Tuesday.

Seeking to bring more fiscal stability to Washington, McConnell said he and House Speaker John Boehner had spoken with President Barack Obama, a Democrat, about the talks. Boehner has announced he will step down at the end of October.

After years of lurching from one fiscal crisis to the next, a two-year deal would set top spending levels and permit a more predictable process, McConnell said as lawmakers scrambled to prevent an imminent government shutdown this week.

“The president and Speaker Boehner and I spoke about getting started in the discussions last week and I would expect them to start very soon,” he told reporters in the Capitol.

The White House also indicated that bipartisan talks lie ahead now that Congress was moving to keep the government operating beyond Wednesday, when the current fiscal year ends and 2015 spending plans expire.

The Senate aims to pass by early Wednesday a stopgap spending bill to run from Oct. 1 through Dec. 11. Afterward, the House was expected to consider it quickly and send it to Obama for signing into law before a midnight Wednesday deadline.

“It does look like Congress is on track to take the steps that are necessary to prevent a government shutdown – at least for now,” White House spokesman Josh Earnest told reporters traveling on Air Force One with Obama.

Congressional Democrats said they also intended to be involved in the budget negotiations. “If there are any talks, I’ll be invited,” said Senate Democratic Leader Harry Reid. An aide to House Democratic Leader Nancy Pelosi said her staff were in preparations to discuss topline numbers and spending offsets on a bipartisan basis.

Democrats and Republicans disagree over whether spending caps imposed four years ago should be eased, and if so by how much and what the tradeoffs should be.

Boehner, who stunned Washington last week by announcing he would leave on Oct. 30, on Tuesday left open the possibility of tackling major fiscal measures during his final month in office, including raising the nation’s borrowing limit.

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