Obama On Budget Negotiations: No Time For Games

The government faces a shutdown this weekend if Democrats and Republicans can't reach agreement on the current federal budget. And while the White House and Congressional leaders jousted over a few million dollars, GOP Rep. Paul Ryan offered up a proposal to trim more than $4 trillion out of next year's budget.

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One thing to remember about the budget drama here in Washington is that by congressional standards there is still plenty of time. Much of the government shuts down at the end of this work week if lawmakers don't agree on a budget, but of course it is only Wednesday. Lawmakers do tend to push up to or beyond their deadlines.

This is all part of larger battles to come as the White House and Capitol Hill negotiate the budget. NPR's Scott Horsley reports.

SCOTT HORSLEY: President Obama says Democrats and Republicans are closer than ever to an agreement on a budget for the current fiscal year. He's pushing lawmakers to finalize a deal, saying the last thing the U.S. economy needs now is the disruption of a government shutdown.

President BARACK OBAMA: We don't have time for games. We don't have time for trying to score political points or maneuvering or positioning. Not on this.

HORSLEY: The president hosted a meeting with top lawmakers at the White House yesterday, but they left without an agreement. House Speaker John Boehner said afterwards Republicans won't be boxed in to accepting a budget that doesn't meet their demands.

Representative JOHN BOEHNER (Republican, Ohio; Speaker of the House): We've made clear that we're fighting for the largest spending cuts possible. And we're talking about real spending cuts here. No smoke and mirrors.

HORSLEY: The president says Democrats have already agreed to cut spending by some $33 billion, equal to what some Republicans, including Boehner, originally asked for. Mr. Obama said he would call lawmakers back to the White House today for another round of negotiations.

President OBAMA: And if that doesn't work, we'll invite them again the day after that.

HORSLEY: One reason for the president's impatience is that this budget battle is something of a sideshow. The cuts are concentrated in the discretionary, non-defense part of the budget, which represents only 12 percent of federal spending. To make a serious dent in the deficit, lawmakers will have to tackle the big-ticket items like defense and Medicare.

President OBAMA: There are going to be, I think, very sharply contrasting visions in terms of where we should move the country. That's a legitimate debate to have. By the way, part of the reason that debate's going to be important is because that's where 88 percent of the budget is.

HORSLEY: House Republicans tried to launch that larger debate yesterday by introducing their version of a 2012 budget. Paul Ryan, who chairs the House Budget Committee, says their plan would cut trillions of dollars in federal spending over the next decade, while lowering the top corporate and individual tax rates to 25 percent.

Representative PAUL RYAN (Republican, Wisconsin): It is a plan to give our children a debt-free nation so they too can realize their American dream.

HORSLEY: Ryan's plan doesn't eliminate the debt, or even balance the annual federal budget for decades. The plan's biggest spending cuts come in government health care programs. Under Ryan's plan, people under 55 today could no longer expect open-ended Medicare coverage when they retire a decade from now. Instead, they'd get a fixed government subsidy to buy private insurance, with the money going directly to the private insurer.

Ryan's plan is modeled on one developed by Bill Clinton's former budget director, Alice Rivlin. She says the subsidy could save the government a lot of money.

Ms. ALICE RIVLIN (Former Director, Congressional Budget Office): The government would then be able to control the amount of the subsidy or the growth of the subsidy. Right now Medicare is a fee-for-service system and the government just has to pay the bills, whatever they are.

HORSLEY: Critics warn that the subsidies won't keep pace with rising health care costs, leaving seniors to pay more and more of their own medical bills. Ryan is counting on competition among those private insurers to help keep costs in check.

Rep. RYAN: The question with health care going forward is either health care is going to be run by 30,000 bureaucrats in Washington, with command and control and price controls, or 300 million Americans acting as consumers, demanding performance and competition among doctors, hospitals, insurers for our business.

HORSLEY: But before that issue is joined, lawmakers will face another deadline more ominous than Friday's threatened government shutdown. Next month, the government will exhaust its authority to borrow money, unless Congress agrees to raise the debt ceiling. Some lawmakers are balking at that. But Treasury Secretary Timothy Geithner warns failure to do so would be catastrophic.

Secretary TIMOTHY GEITHNER (Department of Treasury): Default by the United States would precipitate a crisis worse than the one we just went through. I think it would make the crisis we went through look modest in comparison.

HORSLEY: So this week's budget showdown is just one in a series of fiscal fights, testing whether Washington's divided government can, in Geithner's words, actually solve problems, not just talk about them.

Scott Horsley, NPR News, Washington.

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