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Obama warns economy still fragile as budget deadline approaches

In his weekly address, President Obama says the hiring surge is a 'good sign,' and urges measured budget cuts with continued investment in clean-energy sources. A government shutdown could hurt the recovery, he says.

April 02, 2011|By Kathleen Hennessey, Washington Bureau

Reporting from Washington — President Obama called the surge in hiring last month "a good sign," but like Republicans pointed to the still-fragile economy to make the case for his policy agenda and strengthen his political positioning in the budget showdown underway in Washington.

"We have to keep up the momentum, and transitioning to a clean-energy economy will help us do that," Obama said Saturday in his weekly address in which he promoted his plan to increase domestic oil exploration and encourage development of renewable fuels.

The positive job report released Friday -- showing an increase of 230,000 private sector jobs -- comes as the president and Senate Democrats in Washington are at loggerheads with Republicans over a spending plan for the remaining months of 2011.

The sides have just under a week to reach a deal before the current spending plan expires -- prompting the first government shutdown in 15 years.

Obama taped his remarks from Landover, Md., where he toured a UPS facility on Friday and promoted continued investment in clean-energy fuels. In remarks at the plant, he warned that a government shutdown "could jeopardize the economic recovery."

But while Obama pushed for measured budget cuts and continued investment, Republicans kept up the call for more dramatic reductions in spending.

In the Republican weekly address, House Speaker John Boehner (R-Ohio) said it was government spending that was hampering job growth, despite the good March numbers.

"Washington's inability to get spending under control is creating uncertainty for our job creators," Boehner said. "It's discouraging investment in small businesses, and eroding confidence in our economy. To put it simply, the spending binge in Washington is holding our country back and keeping our economy from creating jobs."

As the politicians traded speeches, negotiators were at work in Washington trying to a cobble together a tentative plan that could pass both the House and the Senate, where Democrats are in control.

Democrats and the White House have consistently remained more optimistic about the chances of reaching a deal. While Obama said Friday that he believed a compromise was near, Boehner reiterated that "there is no deal."

The speaker has been careful not to appear to be jumping too quickly to deal-making mode, for fear of facing the wrath of hard-line conservatives and a crop of fiscally conservative freshman who have made budget-cutting their top priority.

More than 50 Republicans rejected the last short-term spending bill -- which bought three weeks of negotiating time and cut $6 billion -- leaving Boehner to depend on Democrats for passage. Any compromise deal will need to have enough support from conservatives to stop the GOP defections.

kathleen.hennessey@latimes.com

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