Obama issues warning about government shutdown

By Steve Holland and Emily Stephenson

WASHINGTON (Reuters) – President Barack Obama warned lawmakers on Friday that it would be the “height of irresponsibility” to shut down the government over a spending battle, pressuring Republicans not to pursue deeper cuts.

Obama’s comments set the stage for an attempt to blame Republicans should congressional negotiations collapse and the U.S. government runs out of cash when a short-term funding measure expires on April 8.

“We know that a compromise is within reach. And we also know that if these budget negotiations break down, it could shut down the government and jeopardize our economic recovery,” Obama said at a UPS shipping facility in Landover, Maryland.

Obama weighed in at a sensitive time in the negotiations.

The talks could still fall apart, but neither party is eager to cause a government shutdown that could lead to thousands of layoffs when voters are nervous about the shaky economic recovery and rising gas prices brought on by political unrest in the Middle East.

Both sides are believed to have tentatively agreed to $33 billion in cuts but are haggling over where the budget knife should fall.

“I’m happy to say that negotiations toward a compromise are moving forward. Not as fast as I would like, but they are moving forward,” Senate Democratic Leader Harry Reid said on a conference call.

Democrats want to cut defense spending and some benefit programs that normally lie beyond the reach of the annual budget process, and protect education and scientific research programs. Republicans hope to deny funding to some of Obama’s top priorities, such as Obama’s healthcare overhaul and greenhouse-gas regulation.

A $33 billion cut would represent a big victory for Republicans, as Obama had initially proposed a budget that would have increased spending by $41 billion but was never enacted.

But newly elected Tea Party conservatives in the House of Representatives want deeper cuts, presenting a challenge to House Speaker John Boehner.

And that is just for the budget for the fiscal year that ends September 30. A bigger battle may be looming for the 2012 budget as Republicans eye further spending cuts, tax cuts and a revamp of big-ticket benefits like the Medicaid program for the poor and disabled.


Boehner said on Friday that a shutdown would undermine Republican goals to cut government spending.

“Let’s all be honest, if you shut the government down, it’ll end up costing more than you save because you interrupt contracts. There are a lot of problems with the idea of shutting the government. It is not the goal. The goal is to cut spending,” Boehner told a news conference.

On Friday, several House Republicans said they would resist meeting Democrats in the middle on the size of the cut as they stood on the steps of the Senate. They want to stick to $61 billion in cuts that have already passed the House.

“Anything less than $61 billion is an insult to the problem,” said Republican Representative Paul Broun.

The size of the package could change, as Republicans are inclined to push for deeper cuts in return for dropping measures that would block funding for birth control, environmental regulation and other agency activities.

Dozens of such restrictions are included in the Republican plan, and some of them will probably make it into the final bill.

“Let’s not shut down the government on a fight over some bumper sticker issue that may have been around for the last 10 or 20 years,” Democratic Senator Dick Durbin said.

Congressional Democrats who saw Republicans punished by voters after a 1995 shutdown when Democrat Bill Clinton was president are eager to place the blame on Republicans once again.

Until Friday, Obama had largely resisted weighing in on the battle.

Obama chose to do so because a Labor Department report showed a slight decline in the U.S. jobless rate to 8.8 percent and he felt it important to comment on the possibility of a shutdown that he believes could hinder the fragile recovery, White House spokesman Jay Carney said.

Democratic and Republican staffers were expected to work through the weekend to lay the legislative groundwork for the deal. Boehner said he would not be in town.

(Additional reporting by Andy Sullivan, David Alexander, Thomas Ferraro, Richard Cowan and Matt Spetalnick; Editing by Paul Simao)

Obama issues warning about government shutdown