The White House is arranging talks with key lawmakers aimed at reaching a budget agreement for the rest of the fiscal year, but officials are privately resigned to accepting more short term deals, though spokesman Jay Carney says that's "no way to run a business or a government."
The big fight will be over spending cuts that Federal Reserve Chairman Ben Bernanke says will likely cost jobs in the short run. But Bernanke also says Congress and the White House need to agree on a plan "that will persuade markets that there's going to be real progress made against the deficit over the next five and 10 years."
The White House announced the budget talks, which will be led by Vice President Biden, in a statement after the Senate passed a two week continuing resolution to keep the government's spending authority from expiring at the end of the week. In the statement, President Obama said "Living with the threat of a shutdown every few weeks is not responsible, and it puts our economic progress in jeopardy."
House Speaker John Boehner says if the White House had gotten involved in the budget debate earlier "...we might have had something to talk about, but the fact is that we were forced to move on our own."
Privately, administration officials doubt Democrats and Republicans can agree on a package of spending cuts for the rest of the fiscal year in just the next couple of weeks. And Congress takes a week long break later this month, so officials are resigned to accepting more short term continuing resolutions. It's a frustration for federal agency heads, which can't plan their spending because they aren't sure what their budgets will be.
Meanwhile, even though there was little if any argument over the $4 billion in cuts in the CR that passed today, lawmakers say those were easy. Carney says the White House is prepared to go along with another $4 billion in cuts in another spending agreement of a few weeks, and he says that will almost meet the Republicans half way on their push for $100 billion in cuts.
The reasoning behind that calculation is that Republicans want to trim $100 billion from Mr. Obama's 2011 budget proposal, which was never adopted. The continuing resolutions are based on the 2010 spending plan, which was $41 billion less. So the White House feels like it has already agreed to $41 billion in spending cuts. Republicans are unconvinced. Speaker Boehner said today, "The house position is clear: cut $100 billion. We have no clue where our colleagues on the Senate side are."
And once negotiations for further cuts begin, Carney suggests, Democrats aim to turn the tables on Republicans and saddle them for responsibility for a 'jobs weak' economic recovery. He said the president's aides rejected a Republican proposal for $100 billion in cuts because "we cannot accept a proposal that does harm to our capacity to grow the economy and create jobs."
Democrats feel they got support from Bernanke, who told the House Financial Services Committee a $60 billion budget cut over the remainder of the fiscal year would cut economic growth one or two percentage points this year and another point in 2012. "And that would translate into a couple of hundred thousand jobs" Bernanke said. "So it's not trivial."