Heading into the final month of the 2007 congressional session, political gamesmanship between President Bush and Democratic leaders continues to block action on the measures that fund federal activities from Baghdad to Dallas.

They’ll try again next week, but as long as the two sides seem as willing to compromise as Iraq’s Shiites and Sunnis, the deadlock still could force the government shutdown both sides say they want to avoid.

It may take next year’s election to resolve the stalemate.

The basic issues are simple: Democrats want to spend more on domestic programs than Bush and speed Iraq troop withdrawals. They’re trying to do what the American people voted for when they gave the Democrats majorities in the House and Senate.

Recent votes show that a majority of both houses favors that. But that’s not enough; it takes 60 votes to pass bills in the Senate and two-thirds in both houses to override a presidential veto.

With a Democratic Congress and Republican president, that’s a prescription for stalemate, unless the two can compromise. So far, that’s been impossible. Judging from a recent exchange between Capitol Hill and the White House, it remains unlikely.

House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid wrote Bush, urging “a dialogue” to resolve their continuing differences on funding levels.

But they couldn’t resist a partisan jab: “Key to this dialogue, however, is some willingness on your part to actually find common ground. Thus far, we have seen only a hard line drawn and a demand that we send only legislation that reflects your cuts to critical priorities of the American people.”

The White House compounded the ill feeling. Instead of a letter from the president, press secretary Dana Perino issued a statement condemning Congress for failing to pass the bill with most Veterans Administration funds.

“Rather than sending legislation to the president to fund our nation’s veterans before Veterans Day, Speaker Pelosi and Majority Leader Reid today instead sent a letter to explain their failure to meet this goal,” she said.

Ignoring the request for a dialogue, she urged Congress to pass the remaining funding bills “within the reasonable spending limits recommended by the president,” rather than “wasting dwindling legislative days on political statements and legislation that will never become law.”

Clearly, each side thinks it holds the political high ground.

But Scott Lilly, a longtime congressional budget staffer now with the liberal Center for American Progress, notes that, in such fights, “you always have the potential of one or the other side misjudging their standing politically.”

Bush, believing the public backs his efforts to hold down spending despite a less-than-convincing record, has found it easy to take a no-compromise stance because enough House Republicans will vote to uphold his vetoes. That strategy prevailed again when the House failed by two votes to override his veto of a $606 billion bill funding the Departments of Labor and Health and Human Services.

Republicans also hope that stressing congressional failures will benefit them politically next November.

The Democrats, meanwhile, think the public supports adding $22 billion for such popular programs as education, cancer research, job training and aid for returning Iraq veterans.

Curiously, they shied away from a strategy of sending a parade of bills to the White House and forcing Bush to veto them while he seeks more funds for the Iraq war. Still, there’s no sign yet that public disapproval of Congress will hurt them next year.

Beyond differences in domestic priorities and political strategy, congressional Democrats have exacerbated the partisan divide by trying to withhold new funds for Iraq until the administration agrees to cut troop numbers.

Next week, Democratic leaders will try to force a decision by wrapping all of the unpassed money bills into a single package that lowers additional domestic spending to half of the initial $22 billion and omits the extra Iraq funds. But that might merely provoke another veto – and another unsuccessful override attempt.

Democrats might have to settle for a package that drops all of the $22 billion or a stopgap measure to fund the government at last year’s levels, something many conservatives favor since it would kill extra funds Congress approved this year.

Whatever happens, one thing is clear: This deadlock and the accompanying gamesmanship will persist until voters give a stronger hand to one party or the other.