A Testy Exchange at White House Over Jobs Proposals

Jackie Calmes|The New York Times

As diplomats might say of a meeting between rivals that is just short of undiplomatic, President Obama and Congressional Republican leaders had a full and frank discussion at the White House on Wednesday when they met to discuss how to create more jobs.

The 90-minute session, while described by both sides as cordial over all, was a bit testy at times. Mr. Obama and the Republicans aired their philosophical differences over whether the government should keep spending money for stimulus measures to spur employers to hire, as Democrats favor and the Republicans oppose.

President Barack Obama
Photo by: Pete Souza

The meeting came on a day when the House voted to extend $31 billion in tax cuts for businesses and individuals, while the Treasury secretary announced an extension of the bailout program for banks, small businesses and troubled mortgage-holders.

According to Republicans’ reconstruction of the session, Mr. Obama started it.

In opening remarks, they said, the president, who campaigned on a pledge of bipartisanship, suggested that Republicans, by their refusal to work with him, “seem to be almost rooting against recovery” and for high unemployment in an effort to make gains against Democrats in the midterm elections next year.

Minutes later, the House Republican leader, Representative John A. Boehner of Ohio, handed Mr. Obama a letter and a copy of what the House minority calls its no-cost jobs plan calling for no tax increases, new trade agreements and fewer regulations. (Mr. Obama had already read it, and later said he disagreed with some ideas and would talk with Republicans about others.)

Then Mr. Boehner shot back at Mr. Obama. “Mr. President, we do a lot of politics in this town but we are committed to working together in areas where we agree to get the American people back to work,” he said.

Administration aides did not dispute the Republicans’ account, but said the meeting was never confrontational and in fact was a constructive exchange of views.

“I think politics has clearly played a role” in their united opposition to the economic recovery plan, the White House spokesman, Robert Gibbs, told reporters afterward.

Mr. Gibbs added that the president’s main proposals this week — for business tax breaks and infrastructure projects —have typically received bipartisan support in Congress.

Mark Zandi, the economist who formerly advised Senator John McCain, Mr. Obama’s Republican rival in the 2008 election, has vouched for the effectiveness of the stimulus policies, Mr. Gibbs added.

Republican lawmakers said they told Mr. Obama that his ambitious agenda of changes in health care, financial regulation and energy policies was unnerving many employers and causing “a hiring freeze,” as Mr. Boehner put it.

When Representative Dave Camp, a Republican from Michigan, called it “a job-killing agenda,” the president complained that Republicans were “trying to scare the American people” about his proposals. More than once, he challenged them to produce an economist who shares their idea that the government should cut spending before the economy has fully recovered. “We will address deficits next year,” he said.

Senator Judd Gregg, Republican of New Hampshire, said he did not see the president’s opening remarks or others as unduly political.

“He went around the table and everyone who was there got to say their piece,” said Mr. Gregg, who initially accepted a cabinet post but decided to remain in the Senate, where he has often been critical of the administration.

“A couple people made fairly strong statements,” he added, “and the president responded in a very cordial and thoughtful way.”

The president’s pique at Republicans was evident before Wednesday’s meeting, after 10 months in which they have opposed all of his major initiatives to address the problems he inherited. In his speech on Tuesday at the Brookings Institution outlining his latest economic recovery plans, Mr. Obama reviewed administration actions, said they had helped rekindle growth, and said that Republicans had basically stayed on the sidelines.

“We were forced to take those steps largely without the help of an opposition party, which, unfortunately, after having presided over the decision-making that had led to the crisis, decided to hand it over to others to solve,” he said in his address.

Despite persistent high unemployment, the president and his aides lately have been buoyed by nonpartisan assessments that administration policies — chiefly the stimulus plan and the financial bailout program — are working, if not so well as originally advertised.

An independent five-member panel that Congress created to oversee the $700 billion bailout program issued a year-end report on Wednesday. It concluded that despite lingering problems, the program “can be credited with stopping an economic panic.”

Also on Wednesday, the Treasury secretary, Timothy F. Geithner, told Congress that he was extending the Troubled Asset Relief Program beyond its Dec. 31 expiration date, until Oct. 3. The law that created the program in 2008, at the end of the Bush administration during the worst days of the financial free fall, empowered the Treasury secretary to extend it if needed.

“We want to see the capital base of our financial system return to private hands as quickly as possible,” Mr. Geithner wrote to Congressional leaders. But, he said, “History suggests that exiting prematurely from policies designed to contain a financial crisis can significantly prolong an economic downturn.”

Mr. Geithner said the Treasury probably would not make more loans to banks, barring another crisis. Instead, he said, the program would be used to help troubled community banks, small businesses and homeowners.

Mr. Geithner also signaled to Congress that it could rescind up to $150 billion of the $700 billion lending authority, for “savings” to offset the costs of the emerging jobs bill. He wrote that Treasury did not expect to lend more than $550 billion ultimately.