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Congress Weighs How Deep To Cut Budget


This is WEEKEND EDITION from NPR News. I'm Scott Simon.

The U.S. government is still in business today thanks to a stopgap spending bill approved by Congress this week, but the government spending authority only lasts another couple of weeks. Lawmakers hope to use that time to come up with a budget for the second half of the fiscal year. For the moment though, Democrats and Republicans seem far apart.

NPR's White House correspondent, Scott Horsley, joins us in our studio. Scott, thanks for being with us.

SCOTT HORSLEY: Good to be with you.

SIMON: It buys lawmakers a little time, but what happens next?

HORSLEY: Well, we expect to see two votes in the Senate this coming week. One is on the budget passed by the House. We can consider that the Republican plan. It would cut spending about $61 billion below last year's level.

A second vote on what's now sort of the Democratic alternative, it would be about $10.5 billion less than we spent last year. Both of those budgets are expected to fail. That would sort of throw out the extremes and tell everyone okay, it's time to get to the bargaining table and strike a compromise.

SIMON: What's the President's position, and the role he's playing now?

HORSLEY: You know, the White House did not play a big role, at least a very visible role in negotiating this two-week stopgap measure. Now we're beginning to see a more visible role for the administration. The White House says we're all at the table, the administration is represented, the Democratic leadership of Congress is represented, the Republicans.

On Thursday, Vice President Biden organized a meeting with the legislative leaders. He said afterwards it was a good meeting and that the conversation will continue.

SIMON: Do we know what kind of government programs are on the table?

HORSLEY: Most of these are in the discretionary, non-defense sector of the budget, so it's a fairly small piece of the federal budget that is the focus of all this conversation, but it could have effects all across the government.

The Democrats are talking about taking some money away from NASA, taking excess fire suppression money away, doing away with some seatbelt grants, cutting money for transit systems.

And of course the Republicans are talking about much deeper cuts that would include things like clean water funds, Head Start programs, Title 1 funding for impoverished school children; pretty broad effects.

SIMON: There were some encouraging news in jobs reports yesterday. The economy added 192,000 jobs last month, and the unemployment rate dropped to 8.9 percent. How does the budget battle affect the jobs picture right now?

HORSLEY: Well, this is a good question. The Republican argument is that there's very little affect, or in fact, that the more they cut government spending, the better for the economy. That's the GOP philosophy that less government means more jobs in the private sector.

There are a lot of economists who say that would be the case if the private sector were growing great guns and we were pretty much using up all the money that was out there, and government borrowing was crowding out private sector activity. A lot of economists say we're not in that situation, that the private sector doesn't have a lot of demand for credit right now, and that interest rates are low. There's plenty of money available.

So there is not that kind of crowding-out effect, and in fact, that making very deep sizable cuts in government spending is just cutting off one of the legs that's been propping up the economy.

We do see already as state and local governments cut their budgets, that's been the one part of the job picture that has been the least rosy lately. In February we saw about 30,000 government jobs cut, even as the private sector was adding more than 200,000 jobs.

That said, I was told by the President's top economic adviser, Austan Goolsbee - he's pretty confident that they're going to find some sort of middle ground that won't be that painful for the economy.

Mr. AUSTAN GOOLSBEE (Chairman, White House Council of Economic Advisers) You saw the tax deal come together at the last minute, but in a bipartisan way, and in a way that a few months later is having a positive impact. I anticipate the same on the budget.

HORSLEY: We'll find out then in the coming weeks whether the White House confidence that the negotiations will produce that sort of just right result is warranted.

SIMON: Well, NPR's White House correspondent, Scott Horsley, thanks very much for being with us.

HORSLEY: My pleasure. Transcript provided by NPR, Copyright NPR.