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Jobs Report, Pelosi Comments Dim Hopes for Deficit Deal on Sunday

Jobs Report, Pelosi Comments Dim Hopes for Deficit Deal on Sunday

By Alexis Simendinger - July 8, 2011

As Washington's top elected leaders prepared to lay out their deficit-cutting cards at the White House on Sunday, news that the country's unemployment rate rose in June collided headlong into partisan hair-fires on both sides of the aisle at the Capitol, effectively wilting expectations for an accord this weekend.

President Obama ventured into the Rose Garden Friday morning to say that June's hike in the unemployment rate to a disappointing 9.2 percent sharpened the need for long-term deficit reduction. He also repeated his call that Congress send him a handful of pending and bipartisan bills that he said could put more Americans to work.

Obama delivered his remarks just as he concluded an hour-long meeting with House Minority Leader Nancy Pelosi, who told the president that House Democrats will not support reduced benefits in Medicare, Social Security and possibly Medicaid as part of any deal with Republicans to lower federal deficits and resolve the debt-ceiling drama.

Pelosi and her caucus expressed concern Thursday that the president's penchant for playing poker with Republican lawmakers and his zeal to achieve a historic "grand bargain" to reduce deficits might make federal programs for the elderly, the disabled and the poor more vulnerable to the knife in comparison with federal tax benefits enjoyed by the wealthiest Americans and corporations. Pelosi and other progressives have said they worry that Obama's definitions of shared sacrifice and a "balanced" deficit-cutting deal are not identical to their own.

The California congresswoman, in remarks at the Capitol after her meeting with the president, said she remained "optimistic" that Congress would sidestep debt-ceiling default and cut a larger budget deal. But she told reporters that House Democrats would not agree to benefit cuts, and expect revenue increases, resisted by Republicans, to be part of any deficit-cutting package. "It has to be reflective of our values," she said.

Queried about his conversation with Pelosi, Obama told reporters, "It was good." Asked if he and Pelosi are on the same page, the president was silent as he returned to the Oval Office.

The Labor Department's gloomy unemployment report surprised many economists and market analysts who had just this week been more upbeat because other indicators suggested the economy might be building momentum for hiring. The political dimensions of the stubbornly bleak jobs picture hangs over the White House deficit talks, which are to resume Sunday.

House Speaker John Boehner, reacting to the Labor Department report Friday, said in a written statement that June's numbers offered fresh evidence that Obama's policies have hurt the economy. "[T]he misguided ‘stimulus' spending binge, excessive regulations, and an overwhelming national debt continue to hold back private-sector job creation in our country," he said. "Legislation that raises taxes on small business job creators, fails to cut spending by a larger amount than a debt limit hike, or fails to restrain future spending will only make things worse -- and won't pass the House."

Following that statement's release, the speaker and members of his GOP conference went out of their way during an exchange with reporters at the Capitol to tamp down expectations that the White House and Congress might be on the brink of a budget deal. "In all honesty, I don't think things have narrowed," Boehner said. "I don't think this problem has narrowed at all in the last several days." The speaker continues to say that House Republicans will not support proposals to raise taxes.

The political arm of the House, the National Republican Congressional Committee, also took Obama adviser David Plouffe to task for his prediction Thursday at a breakfast event hosted by Bloomberg News that monthly measurements of unemployment and economic growth would not drive voters' choices in next year's presidential election.

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Alexis Simendinger covers the White House for RealClearPolitics. She can be reached at asimendinger@realclearpolitics.com. Follow her on Twitter @ASimendinger.

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