Congressional leaders give their blessing to Obama’s spending freeze

Congressional leaders on both sides of the aisle gave their blessing to President Barack Obama’s proposed three-year spending freeze.

The leaders met with Obama Thursday morning to map out the critical legislative stretch leading up to the July 4 recess.

{mosads}Their schedules are packed: the BP oil spill is dominating the president’s time, while the House and the Senate are rushing to finish a package of tax extenders and benefits for unemployed workers, as well as a Wall Street regulation overhaul.

But Democrats want to demonstrate they had checked at least one box off their to-do list; agreeing to a three-year freeze on all non-defense-related discretionary spending.

Dealing with the $13 trillion national debt, and with the fact the federal budget deficits will continue into at least the next decade, was a “prominent” discussion topic, Obama said in remarks following the meeting.

“There were actually some very constructive conversations around the table about ways that we could start making significant progress, not necessarily even waiting for the financial commission on some steps,” Obama said.

The president mentioned his three percent spending freeze, noting “there was a good conversation among the leadership about how we adhere to that number. And there were some other creative suggestions, both from Republicans and Democrats, about further progress we could make on that front.”

House Majority Leader Steny Hoyer (D-Md.) said later that he “heard some hopeful comments in there” about reducing spending. During his daily press briefing, White House press secretary Robert Gibbs said party leaders in both chambers agreed to the proposed freeze.

“I would say I think the biggest thing that came out of the meeting was bipartisan approval in the House and the Senate, both sides, on agreeing that the president’s three-year proposed spending freeze on non-security discretionary spending — that was held up by all the leaders as a good idea, one that they would seek to hold their bodies to, Democrat and Republican alike — as a way of making some progress on our medium- and long-term deficit issues in next fiscal year,” Gibbs said.

How stringently to reign in spending, however, has so divided House Democrats that they have not been able to hold a single hearing on their version of the 2011 budget, and Democrats in the Senate have only progressed nominally further.

Concerns about spending also held up passage of a major package of tax extenders, Medicare payments to physicians, and benefits for people hurt by the recession that Senate Democrats are scrambling to finish even as they look toward enacting additional remedies for the ailing economy.

“We have a job-creating bill there we’ve been waiting to get to, but we have to get to this extenders bill first,” Senate Majority Leader Harry Reid (D-Nev.) told reporters after the White House meeting. “And we’re working very hard to get that done.”

While Democrats and Republicans coalesced around the president’s proposed spending freeze, that bipartisanship was offset by breakdowns on the remainder of the topics discussed, notably the legislative response to the BP oil spill.

“We have to move on an energy agenda that is forward looking, that creates jobs, that assures that we are leaders in solar and wind and biodiesel, that recognizes that we are going to be reliant on fossil fuels for many years to come,” Obama said, “but that we have to start planning now, and putting the infrastructure in place now, putting the research and development in place now so that we end up being the leaders in our energy future.”

While Reid said he was preparing the Senate for an energy bill that could “match” the House’s legislation, Senate Minority Leader Mitch McConnell (R-Ky.) said he has “total confidence” that he can defeat the Senate energy bill with bipartisan support.

Joined by House Minority Leader John Boehner (R-Ohio) at their own media appearance, McConnell said Obama and Democrats are “seizing on the oil spill in the Gulf and using that as a rationale, if you will, to pass a national energy tax referred to down here at the White House as cap and trade.”

McConnell chided Obama for continuing to support legislation that “has absolutely nothing to do with the environmental disaster we’re facing in the Gulf,” while saying that Republicans are willing to work with the Obama administration on legislation that is appropriate to the spill, such as reforming the Minerals Management Service.

Boehner was more defiant, saying “both the administration and BP should be held responsible for their various failures.”

Speaker Nancy Pelosi (D-Calif.) credited Obama for sending Attorney General Eric Holder to the region to investigate and pursue criminal charges over the explosion and subsequent cleanup.

Pelosi said BP demonstrated a “lack of integrity” in the aftermath of the explosion, and she said the government should intercede to ensure that BP is paying out claims to small businesses before it makes good on its dividends to shareholders.

“Of course, and that would be their best public relations instead of taking out all these ads,” Pelosi said.

— J.T. Rushing contributed to this story.