Obama, Republicans seek spending cut endgame

WASHINGTON, April 3, 2011 (AFP) - President Barack Obama and his Republican foes, spurred on by archconservatives irate over gaping deficits, have until Friday to agree on what may be the deepest spending cuts in US history.

Key Democratic and Republican lawmakers, joined by top Obama aides, are inching privately towards a deal to fund the government to October 1 and avert a partial federal shutdown triggered when a short-term funding measure expires at midnight on Friday.

Republicans have publicly disputed a Democratic claim that the two sides have agreed to slash $33 billion (23 billion euros) and are now arguing over where to make the cuts, saying no single component is set in stone until a comprehensive deal is reached.

The outcome of the fight is sure to shape Obama's 2012 reelection prospects, and will help determine the political clout of the "Tea Party" movement that has demanded deep spending cuts in return for their support for Republicans.

In a rare moment of public agreement, Obama and Republican Speaker John Boehner both warned Friday against failure to reach a compromise -- though each gave a different reason for fearing a government shutdown.

Speaking after a new jobs report that found unemployment at a two-year low -- but still high at 8.8 percent -- the president warned that a shutdown could hamper the fragile US recovery.

"It would be the height of irresponsibility to halt our economic momentum because of the same old Washington politics," Obama said. "That could jeopardize the economic recovery."

Boehner called the jobs report "welcome news" but stressed that "Washington needs to do a lot more (to) get our economy moving again" and warned that a shutdown would carry a high price tag because of disrupted government contracts.

"Frankly -- let's all be honest -- if you shut the government down, it'll end up costing more than you save," he told reporters.

Boehner's comments came a day after scores of "Tea Party" members demonstrated a stone's throw from the US Capitol to demand that Republicans stiffen their spine and reject compromise with Democrats.

"It's time to pick a fight," Republican Representative Mike Pence told the rowdy crowd under a chilly drizzle, warning that the standoff was "a defining moment for the new (Republican) majority in Congress."

Pence and other speakers said they were willing to shut the government down if Democrats rejected what he called "a small down payment on fiscal discipline and reform" -- putting Boehner in a potentially tough spot, with 87 new House members who owe their November election in part to the Tea Party.

"We're going to fight for the largest spending cuts that we can get, and I'm hopeful that we'll get it as soon as possible," Boehner promised Friday.

A day earlier, the speaker had sounded more defensive, saying Republicans "can't impose our will on the Senate" and only control the House, which passed $61 billion dollars in cuts early this year.

If the $33 billion figure anchors the final deal, Republicans could credibly claim a victory over Democrats, who condemned such a figure in February as "extreme" and "draconian."

But Democrats have vowed to hold the line against what Democratic Senate Majority Leader Harry Reid on Friday called "ridiculous" Republican proposals, notably one that would block the Environmental Protection Agency from regulating greenhouse gas emissions blamed for global warming.

And Boehner may need moderate Democrats' help to muscle the compromise bill to passage -- something he can count on if the deal is "reasonable," according to number-two Democratic Senator Dick Durbin.

Obama on Friday expressed optimism that a final compromise is "within reach" even though "there's still details and differences to work out."

But in separate phone calls to Reid and Boehner on Saturday, he told them that budget negotiators were "running short on time."

The president told the congressional leaders that he had directed White House budget negotiators "to work hard over the weekend with the appropriators to help reach resolution on the composition of those cuts," a White House statement said.

Meanwhile, Boehner, delivering a weekly Republican address on Saturday, disputed the claim that the sides had agreed on a number for cuts.

"You've heard Democrat leaders claim an agreement has been reached on this issue. But let me be clear, there is no agreement," he said.

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