Federal Budget Battle Update

PRESS BRIEFING

BY PRESS SECRETARY JAY CARNEY

AND DEPUTY DIRECTOR FOR MANAGEMENT

AT THE OFFICE OF MANAGEMENT AND BUDGET

JEFF ZIENTS

James S. Brady Press Briefing Room

12:44 P.M. EDT

MR. CARNEY: Thank you, ladies and gentlemen. Good afternoon. As you know, in 15 minutes the President will be meeting with the Speaker of the House and the Majority Leader of the Senate -- the President and Vice President will be meeting with them -- in the Oval Office to continue their discussions about the need to fully fund the government through the end of this fiscal year.

So I anticipate that you’ll have questions for me about that, which I can entertain, but I’ll tell you that I won’t have much to say about that process since when I take those questions the meeting will be happening. And I’m sure we will get back to you after that meeting is finished.

In the meantime, I have with me today Jeff Zients, whom I know many of you know. He is the Deputy Director for Management at the Office of Management and Budget. He is responsible for overseeing the process for the entire federal government of dealing with contingency plans should there be a stop in funding if, in fact, there is a shutdown of government.

So that’s part of the plans that exist. And you’ve had a lot of questions for me over the last days and weeks about what might happen if we cannot reach resolution. And Jeff is a much better person to answer those questions, so I have him with me here today.

I will turn it over to him. Questions on other issues, direct to me. Questions on the President and these negotiations, direct to me. And Jeff will start now.

Thanks.

MR. ZIENTS: Thanks, Jay. I thought I’d just say a few words up front and then take questions. The Office of Management and Budget, as all of you know, in addition to its budgeting role, is the agency that helps the President manage the executive branch. Jack Lew, our director, has asked me to be his point person on contingency planning, and our team has been at work working closely with the agencies across the past several weeks as they update their plans and refine them for how they will operate if Congress is unable to pass a funding bill for the government.

This week, given the Friday deadline, we ramped up our planning and are making the prudent moves necessary to have an orderly shutdown in case it should come to that. This morning we had a call with agency chiefs of staff and deputy secretaries and recommended they begin to notify their employees about the agencies’ shutdown plans. These conversations will include what agency services will remain open and what employees will be furloughed.

Agencies also will begin to brief various stakeholders, including contractors, federal employee unions, state and local governments, grantees, key stakeholders about the agency shutdown plans. Also this afternoon, OMB Director Lew will issue official guidance to the agencies, instructing them to take steps to prepare for a possible lapse in funding. That memorandum will soon be posted on the OMB website.

We’re taking these steps because responsible management demands it. We still hope that we do not have to execute the plans, but we are prepared to implement if necessary.

If there is a shutdown it would have very real effects on the services the American people rely on, as well as on the economy as a whole. In terms of how a shutdown would play out, generally speaking, services that are critical to safety of life and protection of property are excepted from a shutdown. Services that have alternative sources of funding, such as advanced appropriations, mandatory funds, or user fees, can also stay open.

Let me give some specific examples on what would be closed versus what would be open. As to what would be closed, the Federal Housing Administration -- FHA -- would not endorse any single-family mortgage loans or have staff available to process and approve new multi-family loans. FHA single-family lending represents a market share of more than 20 percent of overall loan volume of home purchases and refinancings.

There would be no new approvals of SBA-guaranteed loans for business working capital, real estate investment or job-creation activities.

National parks, national forests, and the Smithsonian Institution would all be closed.

The NIH Clinical Center will not take new patients, and no new clinical trials will start.

Those filing paper tax returns would not receive tax refunds from the IRS, and many taxpayers would not be able to receive service from the IRS to help them meet their tax obligations. For example, the 400 walk-in service centers would all be closed.

Permits and other approvals will not be processed, such as permits and clearances the EPA issues to allow building projects to proceed.

The Mine Safety and Health Administration would not be able to conduct regular safety and health inspections. Only emergency passport services would be open. Normal processing will not. Most of the veteran benefits customer support services would be suspended.

Most Department of Defense budget planning in preparation would cease and military personnel will not receive paychecks during a funding lapse.

Customer service will be significantly impacted across the federal government. For instance, if you have a question about your Social Security check or Medicare reimbursement, it may be very difficult to get an answer. Throughout the government, websites and online services will be shut down or at limited functionality.

As to some of the activities that will continue if there’s a shutdown, the FAA would keep the air traffic control system open and safe. FEMA disaster operations would continue. Social Security checks will be sent to beneficiaries. National Weather Service alerts and forecasts, as well as volcano and earthquake monitoring by other agencies, would continue.

U.S. Postal Service would continue mail collection, delivery, and other operations. Custom and Border Protection activity would continue. Military operations in Afghanistan, Libya, and Iraq would continue. NASA satellite missions currently in operation would continue. SNAP, or what’s better known as food stamps and other child nutrition benefits would continue. Most federal student aid operations would continue. Core federal law enforcement such as FBI and U.S. Marshals would continue, as would prison and detention operations.

So with that overview, let me now open it up for questions.

MR. CARNEY: Let me just -- I’ll go ahead -- let me just say that Jeff is a font of information. But if you dig deep down in questions about specific agencies and operations within those agencies and how they’re affected, he’ll likely have to refer you to those agencies. So think about that when you’re asking questions.

Ben.

Q Thanks, Jay. Thanks, Jeff. One of the scenarios being thrown about is that if a shutdown happens, it might last for a few days, that that’s the period of time it would take for all parties to agree. How would you characterize the effect of a shutdown on the economy and the American people if in fact it only lasts for a few days? Would that be a seriously harmful force or is it only a sustained shutdown that would cause that --

MR. ZIENTS: Funding lapse is I guess early Saturday morning, 12:01 a.m., so it is a weekend. So if your few days were a couple days on the weekend, obviously less of an impact than if it was several business days. But between the FHA, the IRS that I talked about, businesses -- having come from the private sector, the inability to get a permit, that slows things down and leads to fewer jobs and other ramifications for the economy.

So, overall, if we were to have a shutdown, obviously the shorter the better. But the impact I think will be immediately felt on the economy.

Q So do you think that -- is it fair to say that if it should last only a few days, that that -- I mean, I guess to kind of sum this up, that’s not that big of a deal, which is kind of an argument that’s being posed?

MR. ZIENTS: When I think about the scale of the number of operations that will be shut down and then would be have to be reopened, I think the impact on the economy, even for a short period of time, could be relatively significant. Furthermore, what does it say about confidence in the country if the government actually indeed shuts down.

MR. CARNEY: Caren.

Q Would the government still be able to release economic data?

MR. ZIENTS: For the most part -- to Jay’s question -- for the most part, no, but specific, statistical agencies should follow up with the agencies who can give you the detailed answer to that question.

MR. CARNEY: Jake.

Q Two questions. One is, why would the decision be made, or how is the decision made that troops, who you say will continue to be fighting in Afghanistan and Iraq, would not receive paychecks while Social Security checks --

MR. ZIENTS: That’s actually -- that’s actually not a decision. That comes from what is their funding source. And if we have no money in the annual appropriations we can’t pay the troops. So they will continue to earn their money, but they will not receive paychecks.

Q Just because it’s a different source than Social Security.

MR. ZIENTS: Absolutely.

Q And then the other question I have is it sounds like it would -- based on what you’re saying it would be a good idea for President Obama to sign the short-term funding bill that the House Republicans are putting out that we just got a veto threat about. Would it not be better for the country?

MR. CARNEY: Jake, I think, as you mentioned, we have issued a veto threat on that measure, and the reasoning behind that is precisely because the President has signed several short-term extensions to allow for time to continue negotiations. Those negotiations have gone on for quite a while now. They, at the highest level, begin again in a few minutes. And he remains confident that if all sides are reasonable, all sides are willing to give, all sides are willing to accept that they cannot get 100 percent of what they want, that we should get this done.

He has said also that he willing to sign a short-term CR that is essentially clean, that allows for time to get an agreement that might be reached -- time for that agreement to work its way through the Congress because of the rules and procedures in the Congress. But he does not believe that we should sign another short-term measure that carries within it a lot of policy implications in order to kick this can down the road and pay the tollbooth any longer. It is simply no way to do business.

We are at a point now, as you know, where the President and Democrats have demonstrated their willingness to come more than halfway, if you -- towards the Republicans. If you start here with zero and here with 100, 73 is quite a distance. If you start here with zero and here with 61, 33 is significantly more than halfway. And in these negotiations, what has to happen is a closing of the gap, not a furthering of the gap. That’s our position.

And we also believe, as the President said last night -- for those of you who stayed late -- and has said previously, that this is not the vehicle, this is not the appropriate vehicle to have ideological or political agenda items debated and voted on. They can be done elsewhere. This work needs to be completed. The funding of the government, the substantial spending cuts that are included in these measures and that the President and Democrats are very willing to support, that needs to be done. And it can be done very quickly if all sides are reasonable and reach an agreement.

Q And the veto threat, I didn’t see -- other than the idea that it serves as a distraction, I didn’t see enumerated the policy implications that you’re talking about. Can you explain what is in this short-term CR that the President finds objectionable?

MR. CARNEY: The point is, is that the President and the Democrats, we have been negotiating in good faith and we have closed the gap. As the President said last night in the meeting he had, a long meeting with the Speaker of the House and the Senate Majority Leader, that it clarified some of the issues that remained, it narrowed the number of issues that remain, and staff worked literally through the night on those issues, and that we have already demonstrated how we can get to substantial spending cuts -- the largest in history, larger as a percentage of the GDP since 1982 in Ronald Reagan’s first term.

That is the President’s position. It is the Democrats’ position. We do not need another short-term measure with $12 billion of additional spending cuts separate from these negotiations because we are now at a point where we can get the deal done. The people expect us to get the deal done. It is simply small ball compared to the big issues that we face, and it is enormously frustrating I think for most Americans to see politics or other issues separate -- create a situation, a stalemate situation, that could lead to a shutdown of government that creates the kind of problems that Jeff just enumerated. That’s why the President called the meeting today; that’s why he called it last night; that’s why he is so focused on it right now, so we can get this done.

But let’s -- if we’re going to start down that road, what I’d like to do, so that Jeff can get back to work, is if you have more questions specifically for him on his issues, let’s do that. Otherwise we’ll let him go.

Q If you can just tell us what a shutdown would look like at the White House here, who would be impacted. Would much of the staff not be essential?

MR. ZIENTS: The White House is part of the Executive Office of the President. The Executive Office of the President is using the same framework that I talked about before in terms of funding sources and activities to determine who’s furloughed and who’s not furloughed. And the bottom line is there will be many fewer staff at the White House if indeed we’re shut down.

Q Can you give us anything more specific than that? Will the chief of staff be working? Will Jay be working? (Laughter.)

MR. ZIENTS: Commissioned officers are working and politically appointed Senate-confirmed folks are working. Many political appointees will not be working.

MR. CARNEY: Chip.

Q You talked about the effect on the economy of FHA and Small Business Administration and all that kind of thing. But this is an administration that believes that government spending can stimulate the economy. Isn’t the greatest effect on the economy kind of the anti-stimulus of having 800,000 people suddenly not working and not doing government work? Is this an anti-stimulus, exactly the opposite of the stimulus plan the President --

MR. ZIENTS: Well, 800,000 is the number of folks that didn’t work in 1995, and we believe that we’re going to be in that same vicinity if indeed the government is shut down. And, yes, that has a -- to use your words -- anti-stimulus effect.

Q Is that more powerful than the SBA and FHA and all those kind of things? Isn’t that really what would affect the economy most?

MR. ZIENTS: Actually, I don’t think so. I think that while that’s not insignificant, and also we have to think about those lives, 800,000 people and their families and how they’re going to be impacted -- and these are dedicated public servants -- I think the effect of FHA on the housing market, people not getting their tax returns, SBA loans -- these collectively have a major impact on the economy.

Q Two quick semantics questions. Do you still use “essential” and “non-essential,” and would it be accurate, as Michele Bachmann says, to call this a government slowdown, not a government shutdown?

MR. ZIENTS: Well, I think there are a bunch of different legal terms. I think the easiest way to think about it is furloughed and non-furloughed employees. And as I articulated, there are many services that are going to be shut down and some essential services will remain open.

MR. CARNEY: Savannah.

Q Can you explain how the shutdown will cost ultimately the government money? I’m not talking about the ripple effects that Chip was talking about, but some have suggested that it actually will cost the government to shut down.

MR. ZIENTS: Well, in some situations, oftentimes -- I alluded to this earlier -- when you have to shut something down, that costs money, and ramping something back up costs money. So --

Q Is that the case here?

MR. ZIENTS: Yes, absolutely. That’s built into contractors. It’s built into a lot of the different cost structures of the federal government.

Q What is that likely to be, and is that independent of the amount of time -- I mean, even for a couple of days if you’ve got to ramp down, you got to restart, there would be a cost associated with that. How much is that likely --

MR. ZIENTS: We have not -- as to the actual government operations, we’ve not sized that. We will do so if indeed we reach that point. But I don’t have an estimate for that. Again, the cost on the economy I think is far greater, as I articulated earlier.

MR. CARNEY: Carol.

Q To Wendell’s question, do you have any estimates based on the last time that this happened, what it costs to --

MR. ZIENTS: I do not.

MR. CARNEY: Mark.

Q Is it the administration’s plan to reimburse furloughed employees for lost pay?

MR. ZIENTS: As you know, in 1995, indeed, furloughed employees were paid. It’s Congress’s decision, but the administration will support reimbursement.

MR. CARNEY: Ari.

Q If American people have specific questions about services, whether they will or will not be available, particularly if switchboards are shut down, is there any way for them to find out before they go to a government office whether that service will be there for them?

MR. ZIENTS: It’s going to be difficult because, as you said, customer service lines are going to be down, 800 numbers are going to be down, many websites are going to be down, many websites are going to be at limited levels in terms of updating of information. So I think we’ll count on all of you to help disseminate that information in the unfortunate event of a shutdown.

MR. CARNEY: Helene.

Q Can you explain just a little more for me the whole IRS part of this, because aren’t a lot of these IRS workers seasonal and isn’t there a fear that after April 15th they’re not going to be available to do a lot of these tax returns anyway?

MR. ZIENTS: I don’t know the composition of the IRS workforce, but to the extent there are seasonal workers, to go back to Savannah’s question, there will be real transition costs if you were to not allow them to work because they’re furloughed. Presumably they would seek other employment and might not be available when the government reopens. So that’s again an example of the type of cost that we’ll suffer for having to shut down and then reopen.

Q So income tax returns could be delayed even more than --

MR. ZIENTS: Oh, absolutely. I mean, I think this is peak season. And 30 percent of returns are paper-based, so if we were shut down during peak season we’d have a significant backlog and then we’d have the problem of ramping back up and dealing with that backlog. So there could be significant delays.

Q Can you quantify at all the cost per day to the economy? You said there will be an impact. Have you guys put any numbers on this as far as beyond the payroll or other services that are affected?

MR. ZIENTS: We have not. I think other economists have attempted to do so, but those are not numbers that we have.

MR. CARNEY: Christi and then Sam.

Q Hi, Jeff. Thank you for coming to the briefing room. Political appointees, can they voluntarily work?

MR. ZIENTS: No.

Q Can they use their BlackBerries?

MR. ZIENTS: No.

Q They can’t use their BlackBerries at all?

Q Why couldn’t you volunteer? Why can’t you volunteer?

MR. ZIENTS: There’s laws against volunteering.

Q Will they be punished?

MR. ZIENTS: It is illegal to volunteer.

Q Will there be a fine?

Q What about Jay? You haven’t answered the Jay issue.

Q Is there a fine?

MR. CARNEY: I unfortunately -- (laughter) -- I’ll be here.

Q He does work.

MR. ZIENTS: Let me not go to the specifics. Let me not go the specifics of volunteering and fines, because I don’t know those. Overall, this is governed by the Antideficiency Act, where violations of the Antideficiency Act are criminal violations. So this stuff is very serious.

And if we were to shut down at 12:01 a.m. on Saturday morning, those that are furloughed need to power down their BlackBerries and not do any work. And those who are working cannot reach out to those employees for work purposes.

Q And also, will Air Force One fly?

MR. CARNEY: That’s a very good question. I’ll have to take that. I assume it falls under one of those categories. But we can take that question, Christi.

Sam.

Q Thanks. Jeff, as you reach out -- as you let these employees know that they -- that are going to be furloughed, are you giving them a worst-case scenario about how long this could last?

MR. ZIENTS: We’re not speculating at all. I mean, right now we’re doing everything we can to make sure that this doesn’t happen, as Jay has talked about, and if in the unfortunate scenario it happens that we’re able to execute on the shutdown plans.

MR. CARNEY: Keith.

Q What’s the potential fallout and danger if there’s a national emergency during a government shutdown?

MR. ZIENTS: National emergency personnel are for the most part going to be at work, and some will be on call. So we will be well positioned to deal with a national emergency.

Q But aren’t there many other logistical issues that other agencies would have to pick up, I mean, if there’s some kind of an attack?

MR. ZIENTS: If something like that was to occur, agencies would look at the legal framework and how it’s changed since they did their planning based on the circumstance and, therefore, would be able to bring back appropriate employees if necessary as dictated by the circumstance.

MR. CARNEY: Let’s do two more here. Sam, and yes, sir.

Q It might be out of your purview, but private contractors who work inside government buildings, do you have any models about how they’ll be affected economically or in terms of their workload?

MR. ZIENTS: Same framework. So if they’re doing activities that come from multiyear funding or user fees, i.e., there are dollars to fund, then they’ll continue to execute on their contracts. If they are part of these activities, protection of life or property, then they’ll continue to work. Otherwise, they will not. Those contracts will not be in place.

Q In reaction to the Japan tsunami, what about U.S. relief efforts in Japan and elsewhere -- relief efforts abroad? Would those continue? And what about the radiation monitoring here in the continental United States?

MR. ZIENTS: I believe the monitoring would continue, and the specific relief efforts I think you need to follow up with the agencies. It’s a case-by-case situation.

Q How about embassies and consulates?

MR. ZIENTS: Embassies and consulates will continue to operate at lower levels of service. And I had mentioned earlier, only emergency passports; so regular passports and visas will not be processed.

Q What classifies emergency passports? I mean, what --

MR. ZIENTS: State Department could help you with that.

Q Jeff, what about the big dig out there? Does that stop? (Laughter.) Is there a --

Q Is there a national security --

Q -- a shining cloud, a shining light --

Q It’s only infrastructure.

MR. ZIENTS: Again, I don’t know the specifics of the big dig, but EOP has its plan, as I said earlier, and it will use -- it uses the exact same framework -- is there multiyear funding or not in this situation? Clearly, it would not be a protection of life.

Q Jeff, this is confusing for us, but what would you say to the rank-and-file worker who’s sitting there wondering today, what’s my status after Friday?

MR. ZIENTS: First of all, I’d say -- I very much sympathize. It’s a hard, hard, hard situation for people to operate with this level of uncertainty. And so we have asked agencies to begin communicating to employees as to --if there is a shutdown, hoping again that there is not -- what their status will be. Will they be furloughed or will they indeed be at work?

MR. CARNEY: Thank you very much. Thank you. We’ll move on. Appreciate it, Jeff.

Q Thanks, Jeff.

MR. CARNEY: Okay. As I said at the top, I just want to warn you as you ask your questions that I don’t want to get ahead of a very important meeting that’s happening as we speak. And with that admonition I will call on Mr. Feller.

Q Thank you, Jay. Last night the President said from this room that the issues were narrowing. Based on what Speaker Boehner and Leader Reid said today, it certainly doesn’t seem like that; it seems like it’s going the other direction. What happened since last night? Where did this get off the rails?

MR. CARNEY: Well, Ben, what I would say is, because they are in there discussing just these issues right now, I’m not going to get into details about proposals and counterproposals, but I will say that at the very least, the meeting, the long meeting, 84-minute meeting last night in the Oval Office, did produce clarity about what the issues are and what the avenues would be to discussing and hopefully resolving them.

So what we have said and what remains true is that, as I discussed earlier, that the numbers we have shown that we are willing to do, is end the debate about whether or not we’re serious about reducing spending. I mean, it simply cannot be suggested that the President of the United States endorses a proposal to reduce discretionary -- non-defense discretionary spending by $73 billion, or overall spending by $73 billion in this measure, which is the largest nominal reduction, discretionary reduction, in history and the largest as a percentage of the economy since 1982, that that does not represent a serious commitment to reducing spending and reducing the deficit. There’s an agreement on that.

There is also -- there are some lines that the President has drawn about what are essential priorities that must be funded because of their significance to economic growth and our economic future. He has also made clear that this is not the place -- and we believe the American people would broadly agree with this notion -- that this is not the place -- a funding measure, an appropriations measure for last year’s business, for the remaining six months of this fiscal year -- is not the place to inject contentious ideological political agenda items.

Within those parameters, there is a great deal of room for a compromise, again, because we have shown ourselves willing to go -- meet the Republicans so much further than halfway because we agree on the importance of cutting spending and because we all agree that a government shutdown would be harmful. It would cause great uncertainty in the economy. Somebody asked how many days we would be planning for. Well, we don’t -- you know, how would we know? And that’s part of the uncertainty that’s created since it’s contingent upon a settlement, an agreement, among the political parties and a bill that passes Congress and is signed by the President. So -- and that’s in addition to all the ramifications that Jeff just outlined.

So the leadership in the Congress has said they want to avert a shutdown. The President has made very clear he wants to avert a shutdown. The means by which we can achieve that are very clear. And with any luck, an agreement will be reached and we will avoid that situation.

Q Two other quick ones. You mentioned the term “clarity,” but Leader Reid said today that there’s essentially agreement on the numbers and you’re down to these ideological policy issues. And the Speaker’s office is saying that as of this morning that’s not true. What’s the White House stand?

MR. CARNEY: Well, again, I just outlined our stand in terms of where we have been and the fact that there was an agreement on $73 billion, which, by the way, is the same number in terms of the degree of spending cuts that was first put forward by the Speaker of the House and the chairman of the House Appropriations Committee at the beginning of this process. Remaining issues need to be worked out, and hopefully they will be because it will be awfully hard to explain why they -- why the issues that prevented that from happening were important enough to cause the kind of uncertainty and economic problems that would follow a government shutdown.

Q The last one, quickly, as candidly as you can, does the President think that House Republicans genuinely want to solve this or does he think that they want a government shutdown?

MR. CARNEY: I think the President is not interested in assigning motivation. He believes that -- he takes the Speaker of the House at his word, Senate Minority Leader at his word, about their desire to avoid a shutdown. The Speaker of the House mentioned not that long ago that, as I think Savannah or someone -- Savannah brought up, that it would actually cost more to shut the government down than it would save money. And that’s just leaving out the broader economic implications of this.

And obviously it’s a large body of lawmakers, so to guess at the motivations of individual lawmakers would be a pointless exercise. What he’s doing is negotiating with the leader of the House Republicans, and his team is negotiating with the relevant leaders of the process to try to reach a deal.

Jake.

Q I think she wanted --

MR. CARNEY: You looked like you didn’t want to call on you.

Q No, I was looking at my notes. I definitely have a question.

MR. CARNEY: Yes, sorry, go ahead.

Q Can you talk about the President’s approach in these meetings? How specific is he getting on the details of the discussion? Is he offering proposals on some of the most sensitive issues like Planned Parenthood and the environmental issues? Or is he just telling the two sides, look, there’s a lot at stake, you’ve got to reach a deal?

MR. CARNEY: Without going into the details of a private meeting from last night or previous private meetings, or obviously the one that’s happening now, I will simply say that he spent nearly an hour and a half in the room with leaders last night, so it was obviously a fairly detailed conversation. Now, there were others in the room who are masters of the some of the arcane details, but he’s very engaged.

But he believes also that this is not that complicated, it simply is not that complicated, and that there are -- if we are reasonable, there are fairly clear and acceptable ways to get from here to there.

Q But is he actually mediating in the sense of saying, look, you’re this far apart on this issue; how about we do it this way? Is he offering specifics in that way?

MR. CARNEY: Again, I don’t -- except to say that he is clearly very much engaged in this, I don’t want to characterize the back and forth, because I think that’s -- it’s important to protect the privacy of those discussions in the name of hoping that by doing that we can help achieve a result.

Yes, Jake.

Q While the President was working with congressional leaders throughout 2010, does he wish that he had asked them to pass a budget for fiscal year 2011?

MR. CARNEY: Look, I think the President was very hopeful at the end of last year that funding for the full year could have been achieved. It was obviously a time with a lot on the table. And there was, as you remember, an unexpected by most, I think, observers and very significant bipartisan agreement on a tax cut compromise and further measures to help advance the recovery that was taking hold last year.

So he -- he obviously fully supports and has always supported the idea that Congress would get its work done and move forward. But these are complicated issues -- or they can be. What is the case on this, is that we have been focused on this portion of the fiscal year now for many, many weeks. We have -- the President has signed into law already several extensions, continuing resolutions with significant spending cuts contained within them in order to allow more time to get -- to reach a compromise.

It is -- we are well past time for that to take place. It is -- the issues that confront us here at the White House and on Capitol Hill are too large to continue to linger over this negotiation, because we should just get a deal and move on.

Q I interviewed a number of people who will be hurt by a government shutdown; President Obama cited one of them last night. I don’t really sense that they care much about whether or not the President is fed up with the number of continuing resolutions. I think they just want to be able to get their tax refunds and their military pay.

MR. CARNEY: And my guess is that they’re fed up with the noise they hear from Washington when they find out that they’re -- in the scope of the size of the economy and the distance of their differences, that Washington can’t simply get this done and be reasonable. And, again, we simply say -- and obviously we rely on those who hear us speak and write about our positions -- we believe we have been, the President has been very reasonable and demonstrated a significant willingness to find common ground.

So what I would say --

Q Can I finish my question?

MR. CARNEY: Let me just -- let me finish my answer, then you can finish your question. But the -- he entirely sympathizes, and I think that’s why he cited the gentleman that you referenced, with the uncertainty this creates. It should not be this way. It does not need to be this way. And passing a continuing resolution for another week so we can kick the can down the field a little further without focusing on what we can get done now does not add to the certainty that the economy needs or that individuals need.

Q Right, but my point would be I think that they --

MR. CARNEY: This is a question, not a debate, right?

Q Yes. What I want to know is, what would the President say if somebody says, wait a second, you mean you actually -- the Republicans are offering another short-term resolution so I will get paid next week, but you just don’t want to sign it because you’re fed up with the --

MR. CARNEY: Well, the President supports a clean -- an essentially -- a simple continuing resolution that would allow that to happen --

Q So it isn’t --

MR. CARNEY: -- to allow -- includes $12 billion in additional spending cuts which then -- there are already $73 billion in the proposal on the table from the President and the Democrats -- and muddies the issue, again, when we are on the verge of a potential compromise. So we are focused on the work at hand today and we believe that it can get done. We believe the American people want it done. We take the leaders of Congress at their word that they want it done. And that’s why he’s in there now.

Yes, Dan.

Q Jay, you mentioned that the President said he doesn’t believe that this is that complicated. Well, obviously it’s very complicated if they can’t reach an agreement.

MR. CARNEY: Well, Dan, is that a question?

Q Well, it’s part question, part statement. I mean, isn’t it complicated? Because to this point --

MR. CARNEY: Well, Dan --

Q -- there have been all these meetings and --

MR. CARNEY: -- I think I’ve outlined and I think the President has and others have that we have a situation where in the beginning of this process the Speaker of the House and the chairman of the Appropriations Committee proposed a funding bill for the rest of fiscal year 2011 which would have -- which called for $73 billion in spending cuts. Through this process, they then -- the House then decided that wasn’t enough and passed a resolution with $100 billion in spending cuts -- $100 billion plus -- based on the President’s proposed 2011 budget.

The Democrats have come -- and the President -- have come from that starting point, the same starting point if you put it at zero, to $73 billion. And in any definition of meeting the Republicans more than halfway, I think we have -- we’ve met that and exceeded it. Spending cuts are the issue. Republicans have made that clear and we agree that spending cuts are important. The President has demonstrated his commitment to reducing spending.

And what we have left now is a debate about a relatively small number and how you compose those cuts, and whether or not, for example, you reduce funding for Head Start for children or you eliminate spending for highway projects that are earmarked -- that are designated for earmarks; whether you cut funding for medical research or you cut funding that the Pentagon has deemed wasteful and unnecessary. Those are some of the choices. When we talk about getting the composition of the numbers, those are really the choices on the table.

At another level, there are these issues -- this issue of the injection of policy matters that are highly contentious and should be debated on their own precisely because they’re highly contentious, and do not belong in a funding bill because the insertion of them in there is precisely designed to inject politics in a process that the American people do not want politics injected into.

Q Just to follow on Ben’s question, so there’s no agreement on a number? Or is there agreement on a number?

MR. CARNEY: Well, look, they’re negotiating now. What I will tell you is --

Q Well, last night, did they have an agreement last night on a number?

MR. CARNEY: I’m not going to characterize anything more than what was said by the President in terms of last night’s discussions. What we have said, and I know anybody who has sources on the Hill can confirm, that there was an agreement on a target of $73 billion for the appropriators to work off of to try to find a way to a deal. And that’s been true now for more -- well more than a week.

Yes, Chip.

Q Jay, I just want to understand, are you saying the President will not support any one-week unclean CR even if that’s the only choice other than a shutdown?

MR. CARNEY: Chip, you’re setting up straw men because we believe these negotiations should bear -- can and we hope will bear fruit. And I have simply said that the President has made clear that he will sign a short-term extension if it is simple and for the purpose of facilitating the conclusion of an agreement reached on the rest of the fiscal year; not so he can start the process all over again, move the goal post a little further, reopen everything, and hope we get there in a week. That’s just not acceptable for the American people. It’s not the way to run a business and it’s not the way to run government.

Q Does it have to be perfectly clean --

MR. CARNEY: I’m not going to negotiate with you, Chip. We put out a statement, a pretty clear statement. And more importantly, there are important conversations happening in the Oval Office right now.

Q One other. Reid, Durbin, and Schumer are just repeatedly taking shot after shot at the Tea Party, blaming them for being the problem here. Does the President agree with that assessment?

MR. CARNEY: The President, again, is focused on the conversations he’s having with the leaders of the House and the Senate and the appropriations committees, and his staff is working with relevant staff and members to try to get this done. It’s not -- he’s not characterizing motivations, he just simply thinks that the American people broadly expect their leaders in Washington to work it out; to have in the way that they reach a solution the same kind of approach that most of us have when we resolve a problem, and that is to give a little, compromise, and accept a good deal on behalf of the American people. But, again, let’s -- we’re going to have more for this to say, obviously, about this as the afternoon continues. So let’s -- I encourage us not to dwell too much longer.

Wendell and then Carol.

Q You’ve repeatedly said that the President has gone more than halfway. What’s your response to some liberals who say he’s already given up too much?

MR. CARNEY: What I would say is that the President made clear with his fiscal year 2012 budget and with his positions in this process that he has been willing, in the name of reaching common ground and in recognition of the fact that spending -- reducing spending is important, to accept cuts that in an ideal world he would hope would not be necessary because they are cuts to -- in some cases, to programs that he thinks are very worthy and would merit fuller funding if we did not all need to tighten our belts and share the sacrifice. So that’s his position.

Q And if I could try again with Karen’s question. Majority Leader Reid said today, “We have bent and bent as much as the President will let us bend.” Who’s negotiating here? Is it the President and Boehner? Is it Reid and Boehner? Is it a three-way --

MR. CARNEY: In the room last night, there was the President of the United States, Speaker of the House, the Senate Majority Leader. That’s who was in the room -- and the Vice President, and obviously relevant staff. But the appropriations chairs are significantly engaged because this is an appropriations bill. And as are -- everybody obviously then talks to and gets input from the people in their committee, caucus, or staff.

So this is a congressional matter, no question. It obviously is very much of concern to the President because of his priorities, and because of the potential damage that could be caused by a shutdown of government -- to the economy and to individuals. So he is very engaged in this process as well.

Q Are there just two sides, though? The President and the Majority Leader of the Senate totally on the same page here?

MR. CARNEY: The President and, as I’ve said I think three or four times, the Democrats have presented a position that represents $73 billion in reductions, in spending reductions. And that is a position they share.

Savannah -- and let’s -- probably just a couple more.

Q So this veto threat that you’ve issued, essentially it reflects a judgment that this one-week budget extension is worse than a government shutdown?

MR. CARNEY: Savannah, look, you can parse it in a lot of ways. What we’ve said is that if we can focus on getting a deal on the rest of the year, the President will sign a measure that allows for a very short period of time to get that process done. If we have an agreement and there is a day or two or three or a few more days necessary

to push that pig through the python, then you do that. But you do not continue the cycle that we’ve been on, because it hasn’t gotten us to conclusion. It has created more uncertainty.

Q But just so people understand, the cycle you describe -- you have judged, the President has judged -- that cycle is worse than a government shutdown. He’d rather see a government shutdown.

MR. CARNEY: He does not believe -- no. He does not believe that a shutdown is necessary and that we’re not -- if everyone is serious about getting a compromise and finding common ground, then they will do that in these negotiations, and they will, if necessary, agree that in order to get an agreement through the end of the year, they will support a simple “clean” CR for several days to allow that to happen. It is not necessary to start all over again when we are so close to getting it done.

Q Haven’t the Republicans kind of out-maneuvered you, because if it gets to the point where the Republicans pass a one-week extension and the President is going to veto it as he’s promised --

MR. CARNEY: Savannah, I’m not going to --

Q -- then he’s the person that’s the instrument of the government shutting down.

MR. CARNEY: You’re saying if, if, if. I don’t think that the people are interested in who’s out-maneuvering or who’s playing the best politics. They got a lot on their minds. They have gas prices on their minds. They have job security on their minds. They do not believe that this is necessary. And I think that acting on behalf of the people who brought them here, the elected leaders who represent the American people, I think -- more importantly, the President thinks -- that they need to sit down and work it out. And that’s why they’re doing just that right now, we hope.

Carol.

Q Can I ask you on Japan --

MR. CARNEY: Yes.

Q Can you give us a comment on that? Was the President briefed on that? (Inaudible) the White House (inaudible) assessment --

MR. CARNEY: The President is aware of the earthquake. I was with him when he was notified. And we are monitoring that. We have seen the reports. We have also seen the reports that the power plant at Fukushima was not affected and that -- and also seen the reports that there is not expected to be a tsunami.

So, again, this is information that’s coming in that we’re analyzing, so -- but we’re obviously aware of the situation.

I’m going to --

Q Can I just follow up on the --

MR. CARNEY: Okay, this is the last one.

Q You said he’ll agree with a short-term extension if there’s an agreement. If they’re close to an agreement then --

MR. CARNEY: I don’t want to negotiate the --

Q Well, I just want to figure out at what point would you guys actually agree to an extension to let them continue to talk? Is there a hard and fast agreement at midnight tomorrow?

MR. CARNEY: We’ll let you know. We’ll let you know.

Thanks very much.

END 1:33 P.M. EDT