The White House

Office of the Press Secretary

Press Briefing by the Director of the National Economic Council Gene B. Sperling and Communications Director Dan Pfeiffer, 3/3/2011

James S. Brady Press Briefing Room

3:18 P.M. EST

MR. PFEIFFER: Thanks, everyone. Sorry we're late. This briefing is, as I think was indicated in the guidance, on the record, not embargoed. The purpose of it is, as you know, the President -- or the Vice President is heading up to the Hill with Bill Daley and Jack Lew, the OMB Director, to have the first meeting with the House and Senate leadership -- bipartisan, bicameral -- on the budget discussions. And when Jay was up here yesterday there were a lot of questions about the underlying math involving how we're approaching this discussion, what’s been cut, what do we propose cutting. So we wanted to bring Gene in here today to help walk you guys through that.

The basic gist of this is, as we had talked about, the President believes that given our fiscal environment, we need to cut spending; he proposed in the 2012 budgets a five-year non-defense discretionary spending freeze, which cuts $400 billion and gets us to the lowest level since Eisenhower. So we need to do that. But we also need to make sure we do it in a way that doesn’t sacrifice our capacity to win the future by out-educating, out-innovating, and out-building the rest of the world.

In the discussions we're going to have with the Republicans, that's the framework we take going into it. We have, by their measure -- and Gene will explain how this math works -- by their measure, we have already done reduction in spending of $45 billion. We have proposed and we've talked about doing more. So we've essentially met them halfway by their measure. And so that's a starting point for this discussion.

We recognize that in this debate both sides are not going to get everything they want. Just like in the tax cut debate in December, both sides are going to have to give to resolve this. We're willing to do that. We're willing to cut things that in a different fiscal environment we would either maintain, fund, or even expand funding. So we understand that. As you know, we have talked about our opposition to the original House bill that passed, H.R. 1, because we believe that while we agree with Republicans that we need to cut spending, we believe that it goes too far in cutting some of the things that we believe are critical to winning the future -- education, innovation, research and development.

So we go into this knowing we're going to have to cut, we know we're going to have to compromise with them. I'm sure there will be a lot of questions about the meeting. It hasn’t happened yet so our ability to answer those will be limited. And we're not going to talk even after the meeting a lot about what happens in there because we want this to be a good-faith discussion with both parties.

So with that, I'll turn it over to Gene.

MR. SPERLING: Thank you. So as Dan said, the President and the administration is prepared to put forward the specific cuts that will show that we are -- have moved halfway to the Republican House bill, and that we are willing to cut spending further if we can agree on cuts and find common ground in a way that does not do harm to the economy in the short term or in the long term through gutting education, research, innovation -- things that are critical to winning our economic future.

Let me just explain -- and we'll give you -- I will give you the specific numbers and we can come back over them as much as you want. Basically --

Q Do you have a blackboard?

MR. SPERLING: What?

Q A blackboard would help.

MR. SPERLING: Sure. Where’s Austan? (Laughter.)

So, essentially, as Republican leadership has made clear, they reduce spending -- when they talk about reducing spending over a $100 billion, what they are referring to is that H.R. 1 came in $102.3 billion lower than the President’s fiscal 2011 request. That's for all discretionary spending. So they came in at $102.3 billion lower than the President’s request.

If you’d like to -- if you so like, I can give you the exact numbers on that, or we’ll do so in a second.

At that point, the President, however, has agreed to a CR that would be $40.8 billion below what the President’s 2011 request was.

Q $40.8 billion?

MR. SPERLING: $40.8 billion -- that was $40.8 billion. So when the CR -- the CR itself moved -- the March 4 CR moved $40.8 billion towards where the -- towards H.R. 1. Then the two-week CR on March 18th moved another $4 billion to $44.8 billion. So in other words, the gap, again, between the President’s fiscal year 2011 request and where H.R. 1 was, was $102.3 billion. Of that $102.3 billion difference, we have already moved $44.8 billion to closing that gap -- almost halfway.

We are also prepared to put out specifics that will move another over $6 billion closer -- so that we will have met them halfway -- essentially split the difference between the President’s request and H.R. 1. And we’ve made clear that we are willing to cut spending further if we can find common ground on cuts that we can all agree would help reduce the deficit without harming the economy in the short term or harming our long-term competitiveness.

Now, just to give you then the --

Q -- $6 billion in new cuts that you’re going to put out?

MR. SPERLING: Stay tuned. But we’re making clear that we are willing to do that.

MR. PFEIFFER: And this is, as Jay talked about from the podium the other day, we were willing in the course of extending funding for the government to do $8 billion over a month, and so this is in line with that. Essentially we’ve already talked about -- and we have for a few days -- our willingness to go -- already go halfway to the Republicans’ $100 billion.

Q Gene, what was the FY ’11 request that you’re wheedling down?
 
MR. SPERLING: Sure. The President’s 2011 request -- and this includes everything -- defense, security, foreign operations as well as non-security -- was $1.1283 [trillion] -- $1.128 --

Q Trillion.

MR. SPERLING: -- trillion. H.R.1 was $1.026 [trillion]. So if you wrote that down right, it’s essentially $1.128 [trillion]. Take off $100 [billion] to $1.028 [trillion]. Take off another $2.3 [billion] and you’re at $1.026 [trillion]. So that's the $102.3 billion difference.

When the CR passed, it passed -- that extended the budget -- extended CR for two weeks, March 18th -- it went to $1.0835 [trillion] -- $1.0835 [trillion]. So that is where you get us moving $44.8 billion of the way. And we’re already committed that we will move the additional $6.5 billion in specifics that will make clear that we can get to half -- meet them halfway.

We have not put those out yet, but we’re making a commitment. We’ve been clear that we’re committed to doing that and that we’re willing to cut further if we can find common ground on a budget that we think reduces spending in the right way while protecting our investments in education, innovation and research.

Q Just real quick, yesterday with Jay, I thought it was $4 billion and then $4 billion, and now you guys are saying $4 billion plus $6.5 billion? So we’ve just gone up $2.5 billion?

MR. SPERLING: We are making clear that we are willing to go $6.5 billion -- it would be $2.5 above --

Q Yesterday. Okay.

Q But you’re not going to say what any of those are today?

MR. SPERLING: I am not going to say what any of those are right now.

Q Are you providing --

Q Why not?

MR. SPERLING: I would say -- I’d just say stay tuned.

Q What is your --

Q Can you just explain --

MR. SPERLING: I’m not going to say whether we’re putting -- I’m saying that we are committed to doing that, and I would just say stay tuned.

Q Have you determined what they are and you’re just not telling us?

MR. SPERLING: I’d just say stay tuned.

Q Gene, can you talk about the prior cuts? Can you talk about the prior cuts? Because many in the GOP are saying that you have not detailed. They want to know what the cuts are. They don’t know.

MR. PFEIFFER: We have detailed those. I mean, Gene can walk you through them in great detail. But the important thing, though, is to understand the basic math here, which is under their $100 billion number -- it’s their number and their measurement of how they got to $100 billion -- as Gene explained, we’re already -- the current CR level before the one the President signed yesterday has $41 [billion] under. We’ve done an additional $4 [billion].

And the basic point to what Gene is saying is, what we have said is we basically are willing to -- just before the negotiations even start, we’ve already come basically halfway. But this is the beginning of the process and that process begins in about 30 minutes up on the Hill.

Mike.

Q What is your number that is comparable to their $61 billion that they actually passed, which actually cuts current spending levels, and not the 2011 request, which was never enacted? What is your comparable number to $61 [billion]?

Q It’s $10.5 [billion].

Q $4 [billion] plus $6.5 [billion] if you do it. You’ve cut one-sixth of what they’ve done in cutting it.

MR. SPERLING: No, just a sec, can I say something?

Q They’re now projecting --

MR. SPERLING: No, no, no, no -- no, no --

Q -- they’re saying, okay, you caught us --

MR. SPERLING: No, no, no, no --

Q -- it’s really $61 [billion].

MR. SPERLING: No, but actually --

Q And they’re backing off and they’re saying it’s --

MR. SPERLING: Actually -- no, no, no, no. Actually, first of all, this was the standard that they had put forward, the measurement they put forward the whole time.

Q By mistake and they’ve now admitted that.

MR. SPERLING: No, no, no, no. I mean, before -- hold on, just a second --

Q They are, they’re now admitting it.

MR. SPERLING: Just a second. Before you just be that simple about it, you should make sure you understand the way things usually are. Normally for every single time any of us have ever been here, done any of these budgets ever, you take a budget and you make an adjustment for inflation going forward. And if you cut below that, you are cutting actual services because inflation and population goes up every year. Okay? So when you’re doing a CR that’s $40 billion below, off of a $1 trillion base, you are doing fairly significant cuts as any of us would have every measured them.

Also, understand the way there’s $40.8 billion above, which was that there was about $30 billion of this was that the President requested more in defense and security and foreign operations than where the CR was.

The CR actually takes down from the last year about $10 billion more in taking money out from the census, from agriculture programs, long-time savings from the crime victim program. So I would not be -- much of this $40 billion below would represent a significant amount if it would represent cuts by any standard that has ever been used in Washington in terms of budgets. So I don’t think it should be -- I don’t think it’s quite so simple.

Q Well, we were told by people in the White House that the $100 billion was a fake number. And now you guys are saying, oh, it’s a real number, because only by using $100 billion --

MR. SPERLING: Hold on, just a second. Just a second.

Q -- can you get $41 billion.

MR. SPERLING: If you have a negotiation and one side -- this is the President of the United States -- he puts forward a request. The request was a hard freeze, meaning not even a normal freeze -- normal freeze means with inflation -- but a hard freeze, in which you’re essentially cutting below, doing a real cut -- the President proposes that for non-security. Then they come in $102 billion below that. And you’re having -- what you’re having here is a negotiation about how you reach common ground, how you reach compromise. And we had a $102 billion difference between us.

Now, it’s worth noting that we -- that the White House has been willing to move halfway to where they are. Now, when you’re talking about a negotiation and compromise, that’s very important.

And the idea that these things are not kind of real, I mean, if you want to -- the President -- just think about the following. The President had a freeze. That freeze contained a lot of cuts. It also called for increases in things we thought were very important. Those are being -- in agreeing to the CR, that’s seeing $226 million less for national service, $1 billion less for NIH, $912 million less for Social Security Administration dealing with backlogs, et cetera. So the idea this is not real could not be further from the truth.

So the President, again --

Q I’m just saying initially we were told the $100 billion was a fake number by people here at the White House.

MR. SPERLING: I think there was discussion before about when people were annualizing numbers. But I’m giving you -- but this is the purpose of doing this. I’m giving you what the President’s fiscal year 2011 request is. I’m giving you what H.R.1 is -- those are the President’s requests, and their preferred position -- and then telling you that we moved nearly halfway and are willing in the near future to move completely halfway and that we’re willing to move more. That is very important in understanding the effort to reach common ground here.

And then of the $40 billion and the -- significant amounts of those are cuts in real terms that will have a serious effect on benefits and services in areas that matter to people.

Q Can I follow up, since I’ve asked the first question? Mark Zandi, Goldman Sachs, estimated that the bill passed by House Republicans would cost 700,000 jobs. How many jobs would the package you’re proposing cost?

MR. SPERLING: We have not tried to -- we as an administration have not tried --

Q Doesn’t that follow -- it would meet them halfway at 350,000 -- (laughter.)

Q Well, it’s not quite. It’s more like 300,000.

MR. SPERLING: Look, we have tried to put forward -- we have put forward from the beginning an economic strategy. And we put forward things that we thought were very important to the economy in the December package. It was the administration who put it on the table, having 100 percent expensing, which has made a very significant impact in companies accelerating investment in this year.

We put on the table and helped pass a $112 billion payroll tax cut that, with higher gas prices, has proven even more important to this economy. That extra $80 a month in the paychecks of families making $50,000 means that people have more to spend than they would have, even with higher gas prices. All of these things are important.

We felt that in light of those things that we are doing to strengthen the economy, starting the process of doing significant spending cuts because of the benefits that would get to long-term fiscal discipline were part of an economic strategy that would be good for growth now and good for confidence and growth going forward.

At some level if you start to cut too deep it becomes harmful. It has not just risks in the short term but it also has risks in the long term. We are, as the President said in the State of the Union, competing with countries that are doing significantly more on modernizing their infrastructure, on research, on investing in clean energy. These are things that we hear from CEOs, Democrat and Republicans, are critical for competitiveness.

So our focus is, yes, not on cutting so deep that you would have a negative impact on jobs and growth now, but our focus is also on the cutting the type of things that hurt our ability to win the future by ensuring that we can compete in terms of education, skills, modern infrastructure and innovation.

Q How far are you willing to go?

Q The additional cuts that you say that you’re prepared to agree to, are those all in the area of discretionary spending?

MR. SPERLING: I’m making clear today that we are willing to meet them halfway and are willing to put out the cuts to do that. And we have to give a chance for the first meeting to happen at 4:00 p.m. So, again, stay tuned. At some point in the near future, we’ll have more on that.

Q You said repeatedly you’re willing to meet them halfway, and just a minute ago you said you’re willing to -- it sounds like you said further than halfway. So I’m trying to figure out what is the large number --
 
MR. SPERLING: So what I’m saying is, is that we pointed out that there is a $102.3 billion difference between us to start; that with the CR we had already moved nearly halfway, $44.8 [billion]. And we’re making clear now that we’re willing to move so that it’s exactly halfway.

But we’re not saying that that's the end. We’re making clear that we’re still willing to negotiate, to try to find common ground and compromise because of the importance of ensuring that we have both a budget that can restrain spending and still make sure we can invest in the future, but also because it’s important for confidence for the public and the world to not see us in a position where we have to come back repeatedly two weeks after two weeks to keep our government open.

Q A simple follow-up. What is the total number? Is it $44.8 [billion] plus $6.5 [billion]?

MR. SPERLING: I mean, you can figure out halfway between zero and a $102.3 billion, so it’s there.

Q So I think the dispute over meeting halfway has to do with the fact that you guys are counting the President’s fiscal year 2011 budget that was never enacted, right?

MR. PFEIFFER: Well, we’re not counting that. They’re counting that.

Q They’re not counting that.

MR. PFEIFFER: Anymore.

Q They’re not counting it anymore. They’re saying that the $61 billion in cuts are based on the current spending levels; $100 billion would be what President Obama proposed in 2011, but that was never enacted. Therefore, it’s $60 billion. So there’s this $40 billion that was never formally proposed that you guys are taking credit for as a cut that never actually happened.

MR. PFEIFFER: What we’re doing is using -- I understand that maybe people want to change the math now, but -- here’s the point, the overall point we’re making is we want to explain why we feel we’ve come halfway. We’ve done that. I understand that maybe some of the people who originally decided to use that math may not want to use it anymore.

So we wanted to give some detail to why that is the case. What is clear no matter what math you use is that if and when we resolve this, it will be done in a way in which Republicans won’t get everything they want and Democrats and President Obama won’t get everything they want. And so the discussion of how we get there begins today.

And so I can’t tell you what the number is, what they’re going to arrive on. We’re going to sit and we’re going to talk about that. And that will happen in 15 minutes or whatever time that is.

Q But I guess the Republicans’ point is you guys are taking credit for -- in that halfway point, you’re taking credit for $40 billion that were phantom cuts that never happened.

MR. PFEIFFER: I think if you go back and look at the press releases that were put out the day the House CR passed -- we’re not the ones taking credit for that. There are innumerable quotes, many of them in stories and papers that you guys did on that day, which say that they cut -- with Republican leadership saying they cut $100 billion on the day.

By that measure, we have come halfway. We’re going to have -- we’re happy to talk to them about all the math involved in this, but the very simple fact is they say their CR cut $100 billion. Under that measure, we have already come halfway.

And what we recognize -- and we want to explain the math so you guys understand our thinking on this going into the meeting. But what is clear is we’re at the beginning of a process of discussing this. They’re not going to get everything they want; we’re not going to get everything we want. And we’re going to discuss how we get there, much like we did in the tax cut deal.

Q I know ABC News, when we covered it, we covered it as $61 billion, not $100 billion.

Q Yes, us, too.

Q We didn’t. (Laughter.)

Q And I’m glad CBS followed our lead. (Laughter.)

MR. SPERLING: However, Jake, while that might have been a number that goes from the CR, it’s not accurate to say that that is necessarily the cut number, because, as I’m saying, when people talk about savings, when you freeze year after year, you are saving money because you are changing a baseline that assumes you’re going up.

So it is not right to kind of suggest, if you want to -- even if you want to do just pure spending cuts, it is going to be a higher number than you’re talking about because the non-security spending that’s in the CR is actually about $10 billion lower than what passed in fiscal year 2010. And then also, you would normally say that if you froze at that level, that would also bring money down, and so now you’re adding another $4 [billion] and we’re talking about going further.

So there are different numbers that are accurate in what they describe. What you’re describing is what’s below a CR. It does not reflect -- but the other thing I wanted to just remind you of is, their thing hasn’t passed into law either. Right?

Q Right.

MR. SPERLING: This is the President of the United States has put forward a request that’s his ideal budget that he put forward. They put forward their ideal proposal, something they could pass in the House but -- and there is $102.3 billion difference there. I don’t know why, when you’re covering any type of negotiations, that’s not highly relevant to know where the President’s proposal was, where their proposal was, and then if there’s movement, to what degree is that splitting the difference or moving towards one side or another. So I think it’s a totally legitimate, important thing in covering a negotiation.

Q What’s the White House role going to be now in this negotiation? Are you bargaining with the GOP? Are the Democratic leaders bargaining?

MR. PFEIFFER: We’re all at the table together.

Q And the Democrats have their ducks in a row?

MR. PFEIFFER: Of course. (Laughter.) I mean, the point is, we have been having conversations with Democrats throughout this process, we’ve been having conversations with Republicans throughout this process. We’re sitting at the table. And what has to be figured out is what is the best package for the country and what can -- and whether that is something that can make it through a Democratic Senate or Republican House. And that’s why they’re all at the table together. The Vice President has called the first meeting with the bicameral, bipartisan leadership with Jack Lew and Bill Daley, and those conversations will continue after this meeting.

Q What is the White House position on the riders that are accompanying the House CR, including among others, the one that defunds Planned Parenthood? Are those a nonstarter as well for this administration?

MR. SPERLING: We think the focus should be on how to cut spending in a way that is smart for the economy in the short term and the long term, and that no one should get that core mission derailed by focusing on any political or ideological side matters.

Q So you want those stripped from the final language?

MR. PFEIFFER: We’ve already -- on all of those, both when the bill passed and in previous conversations around these same issues and other legislative vehicles, we’ve talked about opposition to those. Let’s have the first meeting before we begin laying out what we are and what we aren’t going to do. So that’s going to happen --

Q Well, I’ll go to them and I’ll tell them what you said. We can negotiate through me.

MR. PFEIFFER: If you’re going to make it to the meeting you’re probably going to have to leave now. (Laughter.)

Jeff.

Q Gene, you said you’d like to have -- find more common ground in addition to the offer that you’re putting out now. Can you give us a flavor for areas where you think common ground might be found? And separately, do you expect the debt ceiling to be on the table or an issue that you will discuss in these talks?

MR. SPERLING: I don’t want to prejudge what will happen in the conversations. But I think most would agree that the immediate issue that we face is finding compromise and common ground on the budget in a way that cuts spending, protects our economic future, and can allow us to show that our government is funded within our means through the end of this fiscal year. That’s got to be the number one objective, most immediate objective going into the negotiations.

Q And the debt ceiling at another time?

MR. SPERLING: I just, again, don’t want to -- I just don’t want to prejudge what’s going to be talked about in a conversation that hasn’t started yet.

Q Gene, is the argument that you laid out for us about “we’ve met them halfway” the same thing that the Vice President and the others from the administration will be telling Republicans when the meeting starts? Is that what they’re going to present as the opening position? And also, could you just address, since Vice President Biden is going out of the country on Sunday, is he still planning on trying to manage this from afar, or is Bill Daley going to sort of take the lead? Just if you could talk a little bit about that process.

MR. SPERLING: Well, again, we have to see how the first meeting goes. But there’s no question that our entire budget team stands ready to talk, negotiate, work non-stop starting now to get this done within the two-week CR, if it’s possible. And there’s -- from our side, we will have a very strong budget team available to talk, negotiate, work any time, day or night, as long as others are willing to.

Q Is that your opening position what you -- will the administration lay that out at the table, what you just told us? In other words, is this for press consumption, or is this what you’re actually bring to the table, this idea of meeting you halfway?

MR. SPERLING: This is where we as the --

MR. PFEIFFER: Only press is here, so --

MR. SPERLING: This is where we as an administration are at this point.

MR. PFEIFFER: The driving behind this briefing was the fact that when Jay has this conversation, and Amy and Jen and others had this conversation with you guys since the briefing yesterday, there’s been a lot of confusion, and there’s been some debate publicly about the numbers. And so we wanted to bring that forward. That’s been our position publicly before a meeting was scheduled or even proposed, in terms of how far we’ve come already and our willingness to do more.

So you don’t necessarily have to link it. This is to help make your life easier.

Q Well, the reason why I ask is because the -- we have -- probably several of us in this room have had strong pushback from the Republican leadership about this idea of meeting halfway; they reject that. And so I’m just wondering whether this is something that the Vice President and others are going to make a case directly to those leaders that you believe that you have met them halfway, or if this is just for our little bantering back and forth.

MR. SPERLING: I just don’t want to pre-characterize what’s going to be said in a meeting that hasn’t taken place yet. I think that, as Dan said, the purpose here is that there are specific numbers behind this and we’re just explaining to you, because there’s been different types of numbers thrown out, what our 2011 request is, what their ideal position is, and why where we are right now is halfway between that. That’s a pretty straight factual and numerical issue.

Q Gene, it seems like you’ve left the door open for further cuts. Can you explain why, if you really met them halfway, why are you saying we’ll keep discussing it? If you really met someone halfway on a compromise, usually you stop negotiating. Can you talk about why, if you’re halfway, you’re going to keep talking to them about more cuts?

MR. SPERLING: Simply because we understand we have to do everything we can to reach common ground and compromise to help reduce spending, keep our investments in our future strong in a way that can allow us, even with divided government, to work together to keep our government open. So nobody can come to these conversations with -- no one, including us, can come to these conversations with a “my way or the highway” position.

And so while we have moved halfway to them, we feel that the right posture we should take is to still be open to finding cuts that we think are agreeable, that further reduce the deficit, and that meet our standards for not going too far in hurting the investments in education and research and innovation that we think are critical for our economy.

Q Gene, I understand that you don’t want to tell us what you’d be willing to cut for that $6.5 billion, but are you going to tell the Republicans what you’d be willing to cut? And if so, are you going to tell them today or wait until later?

MR. SPERLING: I’d just, again, say stay tuned. I think trying to let you know kind of what our plans are in a way that will --

Q I mean, why not tell them now if you’re trying to meet them halfway.

Q If you tell them, they’ll tell us, so you may as well tell us. (Laughter.)

Q Or just open the meeting to us.

MR. SPERLING: That’s another way you could do things -- not maybe the best way, but --

Q But, I mean, really, if you are trying to meet them halfway, if they’ve told you what they’ll cut --

MR. SPERLING: We’re making clear that we are willing right now to go there. And as to the exact timing of when we would do that and everything, again, I’d just say stay tuned.

Q Just to your point of “my way or the highway” is not your approach, but one Republican source is telling us, “If that’s what they bring to this meeting, it’s not going to be a long one” -- talking about the halfway math. So if they’re pushing back like this already, is there more than just that argument that you need to make?

MR. PFEIFFER: Well, it’s important to understand this is going to be -- we don’t expect to solve this problem by 5:00 p.m. today. There’s going to be multiple discussions on this. What we’re -- when we sit down with them, we’re going to go through and figure where there’s additional common ground. Of some of the cuts that were made in this recent CR are things that were in H.R.1 and also in the President’s 2012 budget we rolled out a few weeks ago where we were willing to accelerate some of those cuts into this year.

So we’re going to look for common ground. I think that we -- while there may be some disputes on math and some other things heading into this, we remain optimistic we’re going to be able to get this done for a couple of reasons. One, we’ve proven we can do this before. In December, before we had the first conversations with the Republicans and the Democrats on the tax cut deal, the general consensus was that we were never going to get a deal like the one we did. And we got it done. And so there is a belief that we can work together and if we can work together, find common ground and all come into this with an open mind.

And then second, I think everyone acknowledges that we are in a -- at the state of the recovery we are in right now, it is important that people put political agendas aside, ideological agendas aside, and be willing to give in some of their core -- be willing to give some ground in order to get this done so that we are not putting our economic recovery and economic certainty at risk by playing politics with this.

So there -- we believe we can get this done. We’re having the first meeting. I don't want to be -- no one can tell you when it’s going to get done or what the process is going to be, but we’re going to sit down at the table, Republicans and Democrats, talking about the best way to move forward.

Q I just want to follow up on the jobs discussion that Mike and Jake and some others were pursuing earlier. Do you acknowledge that whatever compromise that’s somewhat more than halfway you reach with them will have a negative impact on jobs and the economy, just it will be less bad than it would be otherwise? Or do you think there is some way to thread the needle and achieve a level of cuts on the scale that you’re talking about that would not harm job creation and the economy?

MR. SPERLING: I think those are all good questions, but I think you’re basically asking me to try to kind of say where we think our bottom lines are, et cetera. And I’m just not going to obviously negotiate here.

I think that when you’re doing -- when you’re putting together an economic strategy, you have to find the right balance. We had a strategy of putting together measures like 100 percent expensing and the payroll tax cut that helped give additional momentum in the economy. We feel a reasonable amount of spending reduction can have benefits in terms of confidence that we are going to live within our means and get our fiscal house in order.

Anything can go too far. And at some level, the negatives in terms of jobs and growth outweigh the positives you get in economic confidence, and we think everybody should take that very seriously.

And I just -- just on spending reductions, I know you hear the President say this all the time but it’s worth just digesting a second what it means -- when you look at the fact that we say spending as a percentage of our economy is going to be at the lowest levels since Eisenhower, what we’re saying is that the path the President was on -- even before these reductions -- was going to take non-security spending to 2.1 percent by 2015. We can’t find another time -- going back all the way back to when records were kept, which was Kennedy’s first year -- where it was ever that low.

So what that means is that by any historical standard with the cuts the President has, non-security spending is actually low historically -- lower than any of the four years where we had surpluses. So the President has put forward even before this started a very tough and stringent spending path for our country to show that we are getting our house in order and living within our means.

And what you’re seeing is a willingness to do additional spending to find common ground and compromise, but the President has also made very clear that this has to be part of an economic strategy and doing this in a way that would not harm educational opportunity or innovation or research, would not work against the larger goal of creating confidence and growth and future prosperity.

Q Gene, just to follow up, you’re saying substantially that their premise is correct, that by definition cuts are not anti-stimulative, and, in fact, the confidence benefits could outweigh the narrower loss of spending on particular programs or loss of particular jobs.

MR. SPERLING: Again, I’m not going to get into the exact level. I think that as part of a balanced package, there is -- there can be confidence benefits in showing that you are starting the path of getting your fiscal house in order. But done too deeply -- which we believe H.R.1 is -- we believe the negative impact for the immediate economy outweighs the benefits, and more importantly, that it would cause reductions in areas that the President -- that top experts, CEOs all believe are critical for us being competitive in creating the good jobs of the future here in the United States.

MR. PFIEFFER: Okay, last one. There you go.

Q Policy riders aside, are any economic proposals also on the table in addition to spending cuts, such as expedited rescissions or tax proposals or things in a 2012 budget to balance the picture?

MR. SPERLING: I mean, what I’d say is I just -- I don't want to, again, prejudge a conversation that hasn’t -- where the first meeting is starting at 4:00 p.m. Again I think the immediate task in front of us is to find the common ground on additional spending cuts in a way that does not harm our economy in the short term or our prospects for winning the economic future in the long term.

MR. PFEIFFER: All right, thank you, everyone.
 
END
3:57 P.M. EST

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