Sharp Fiscal Split Looms Over Obama and GOP

Charles Dharapak, AP
Republican John Boehner, center, looks on as President Barack Obama talks to Democrat Steny Hoyer following the president's address to lawmakers at the start of the Fiscal Responsibility Summit in February 2009.

Weeks after Obama's initial invitation fell through, he is playing host to Republican Rep. John Boehner, most likely the next speaker of the House, and Mitch McConnell, the GOP leader in the Senate. Other Republican and Democratic leaders will be there, including current Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, as well as Vice President Joe Biden, Treasury Secretary Timothy Geithner and Jack Lew, head of Obama's Office of Management and Budget.

Obama said Monday he's looking forward to the meeting. And in a possible bid to beat Republicans to the punch, he announced the administration's latest move to chip away at the federal budget deficit: a two-year pay freeze for all civilian federal workers aimed at saving $2 billion during the fiscal year that ends next October and $28 billion over the next five years.

In doing so, Obama tried to personalize the affected bureaucracy in ways that highlight how differently he and Republicans view government.

"This is not just a line item on a federal register. These are people's lives," Obama said. "They're doctors and nurses who care for our veterans, scientists who search for better treatments and cures, men and women who care for our national parks and secure our borders and our skies; Americans who see that the Social Security checks get out on time, who make sure that scholarships come through, who devote themselves to our safety."

Boehner and McConnell, writing jointly in today's Washington Post, also vowed to cut spending, but while espousing a diametrically opposite view about "Democrats' big-government policies."

Americans "want us to stop the spending binge, cut the deficit and send a clear message on taxes and regulations so small businesses can start hiring again," the Republican leaders wrote.

Obama and his Republican guests are also at odds over blame for a federal deficit that the nonpartisan Congressional Budget Office expects to have exceeded $1.3 billion for 2010.

A decade that saw two wars, a huge new Medicare drug program and massive tax cuts -- as well as a financial crisis treated with significant fiscal stimulus by the Bush and Obama administrations -- left Obama with the current deficit inheritance, the White House argues. And he notes he came into office trying to tackle it by freezing the pay of senior White House officials and other steps, and later included a three-year non-security spending freeze in his budget proposal for 2011.

In contrast, Boehner and McConnell blame what they call "the misplaced priorities of the past two years."

And the two sides' language conflicts similarly over the Bush-era tax changes that will expire at the end of this year if Congress doesn't renew them. Obama calls them "tax cuts," even as Boehner and McConnell instead say that in their absence "one of the largest tax hikes in American history" will result.

While Republicans may face pressure from incoming, tea party-linked legislators in their party to not compromise, Obama, too, is getting flack from Democrats' traditional allies, including criticism of the proposed freeze on federal civilian pay.

"A federal pay freeze saves peanuts at best, and while he may mean it as just a public relations gesture, this is no time for political scapegoating," said John Gage, president of the American Federation of Government Employees. "The American people didn't vote to stick it to a VA nursing assistant making $28,000 a year or a border patrol agent earning $34,000 per year."

The urgency of the fiscal divide reaches beyond the political resonances the deficit issue carried for voters in the midterm elections, and the tax-cut lapse looming at the end of next month isn't the most immediate fiscal deadline for today's White House participants. Today is also looking to be the last for federal emergency aid for some 2 million long-term unemployed Americans unless Congress extends their benefits -- something Republicans resist.

The current temporary-funding measure for government operations expires on Friday, although another temporary measure will probably be passed since either side would likely suffer politically if seen at fault for a government shutdown.

And the bipartisan National Commission on Fiscal Responsibility and Reform appointed by Obama earlier this year faces a Wednesday deadline for its recommendations

A plan put forward earlier this month by its chairmen -- former Republican Sen. Alan Simpson and Erskine Bowles, a chief of staff to President Bill Clinton -- triggered objections across the political spectrum by suggesting about $4 trillion in deficits could be cut over the next decade by overhauling Social Security and the tax code while drastically slashing spending across the federal budget.

It isn't clear whether the commission will be able to agree on a final set of recommendations; 14 of its 18 members must approve any commission report. Amid reports of internal dispute, the commission canceled a meeting planned for today and wasn't set to publicly reconvene until Wednesday morning. Nor are Obama and his guests likely to emerge today with any surprise agreement on federal ways and means.

But William Gale, a senior fellow at the Brookings Institution, suggests the commission's work, even if not welcomed, won't be in vain. And his reasoning could apply to the politicians as well.

"No solution to this problem is going to be politically popular. But even if Congress disregards the current proposals, dismissing them as politically unfeasible, that will not mean the commission's efforts will have failed," Gale said. "By publicly proposing deficit solutions, these commissions already have fulfilled their main function: to start a serious national conversation."

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