Obama Tries Charm Offensive to Woo Republicans on Deficit

March 7 (Bloomberg) – Bloomberg’s Hans Nichols reports on Obama’s dinner with Republican leadership and ongoing talks to facilitate a grand bargain. He speaks on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)

As $85 billion in spending cuts hit the federal budget, President Barack Obama is taking the rare step of lavishing personal attention on Republican lawmakers he considers open to making a deal to reduce the deficit.

The president broke bread last night with a dozen Republican senators, hosting a dinner at a luxury Washington hotel near the White House. Today, he plans to lunch with Wisconsin Representative Paul Ryan, the Republican chairman of the House Budget Committee, along with the panel’s top Democrat, Maryland Representative Chris Van Hollen.

Obama’s outreach marks a shift in strategy for the White House, amid signs the president’s poll numbers are falling after he and Republicans didn’t avert the across-the-board spending cuts that took effect March 1.

“Our push to him is he needs to be more involved, he needs to be directly involved,” Senator John Hoeven, a North Dakota Republican, said in a telephone interview after last night’s dinner. “We’ve got to stay in intense dialogue until we find a solution.”

The president’s job-performance rating was 46 percent in the Gallup organization’s tracking of opinion March 1-3, five points lower than it averaged during the second half of February. It rose to 48 percent in the March 3-5 tracking poll.

Reaching Out

Having failed to win concessions from House and Senate Republican leaders, Obama is reaching out to others who might be persuaded to split away from their party’s opposition to his proposals, which include raising taxes for top earners.

Obama has spoken by telephone with at least a half-dozen Republican lawmakers over the past few days about the budget and other priorities of his second term, including a rewrite of immigration laws and controlling gun violence. Next week, he’ll visit Capitol Hill to meet separately with Republicans and Democrats in the Senate.

He’s focusing his charm offensive on lawmakers who have shown a willingness to compromise with Democrats, say aides, who asked for anonymity to describe private discussions. Senator Lindsey Graham of South Carolina, for example, said in a Feb. 25 interview on CNN that he would support raising $600 billion more in revenue over 10 years if Democrats agreed to revamp entitlement programs.

“Last night’s dinner with President Obama and my Republican colleagues was productive and substantive,” Graham said in a statement today. “I hope it will serve as the beginning of a new, long-overdue paradigm where people in elected office actually begin talking to each other.”

Skipping Leaders

The overtures have skipped over Senate Republican leader Mitch McConnell of Kentucky and House Speaker John Boehner, an Ohio Republican. Both oppose raising taxes as part of any deal.

With $1.2 trillion in spending cuts mandated over the next nine years and short-term government funding set to expire on March 27, lawmakers say the coming weeks could provide the chance for a long-term deficit-reduction bargain that has eluded Congress and Obama.

Senator Rob Portman, an Ohio Republican who spoke to Obama by phone last weekend, said there’s “a window of opportunity between now and the end of the summer,” when Congress is projected to need to raise the federal debt ceiling again.

“This is the last, best chance to do the right thing,” Portman said.

Neutral Ground

The president raised the idea of a dinner with Graham during a phone call earlier this week and asked the South Carolina Republican to compile a guest list.

Graham and Obama were joined by Senators Richard Burr of North Carolina, Saxby Chambliss of Georgia, Dan Coats of Indiana, Tom Coburn of Oklahoma, Bob Corker of Tennessee, Ron Johnson of Wisconsin, John McCain of Arizona, Kelly Ayotte of New Hampshire, Pat Toomey of Pennsylvania and Mike Johanns of Nebraska, as well as Hoeven.

The meal, which lasted two hours and 15 minutes, took place on neutral territory -- a private room at the oak-paneled Jefferson hotel. White House aides characterized the meeting as a “good exchange of ideas.” Obama, they said, picked up the check. Dinner at the hotel’s restaurant is typically $85 per person, not including beverages, taxes or tip, according to its website.

Leaving the hotel, McCain flashed a thumbs up, telling reporters the dinner went “just fine.”

‘Relationships Matter’

Appearing today on MSNBC, Coburn described the dinner as fruitful and said it was “the first real outreach in four-plus years” Obama has made to Senate Republicans.

“I think he needs to do a whole lot more of that, because relationships matter and building trust and confidence, knowing that you’re not going to get gamed, is the way you get something done for the American people,” Coburn said.

Not everyone was optimistic.

“I wouldn’t hype this up too much,” said Corker before the dinner.

Obama has overseen repeated failures on finding a formula to cut the deficit. A bipartisan commission in 2010, a congressional supercommittee in 2011, and recurring talks between Obama and Boehner didn’t produce an accord. And even if a deal is possible with Senate Republicans, that doesn’t guarantee the Republican majority in the House would agree.

Tax Dispute

The biggest dispute centers on taxes: Obama says revenue must be part of any compromise, and Republicans are equally insistent that taxes not get raised further. As the president wooed Republicans, a nonprofit group formed from the former Obama campaign organization worked to blame them for the cuts.

“The reason congressional Republicans let these cuts go into effect is because they simply wouldn’t support closing tax loopholes for millionaires and billionaires,” Stephanie Cutter of Organizing for Action wrote in an e-mail to supporters. “I wish I were kidding.”

Investors haven’t shown concern that the budget standoff will harm the economy. The Dow rose 0.3 percent to 14,343.36, a third straight record, and the Standard & Poor’s 500 Index gained 0.2 percent at 10:31 a.m. in New York. The yield on the benchmark 10-year U.S. Treasury note was up four basis points, or 0.04 percentage point, at 1.97 percent at 9:02 a.m. in New York.

Keeping Distance

During his first term, the president largely avoided reaching out to rank-and-file lawmakers. Instead, he focused on negotiations with Boehner and McConnell. Congressional Republicans and even Democrats complained that they had little interaction with Obama or his aides. Democrats privately criticized the White House for not using the powers of the presidency to woo lawmakers.

“He certainly doesn’t have to go through me to call my members, and I’m sure he will, and I encourage him to do so,” McConnell told reporters. “I wish he’d done more of that over the years.”

Republicans, though, have kept their distance: No party lawmaker accepted an invitation to a Nov. 15 screening of the film “Lincoln” at the White House.

Representative Scott Rigell of Virginia became the first member of his party to travel on Air Force One since at least May when he joined Obama for a Feb. 26 trip to highlight the impact that cuts in military spending will have on his defense- heavy district.

Rigell’s trip sparked an almost immediate backlash from party activists, illustrating the political risk for Republicans who express interest in working with the president.

“He got elected promising never to do that,” anti-tax advocate Grover Norquist said in a March 5 interview on Bloomberg Television. “He needs to deal with his constituents because he lied his way into office when he made that commitment.”

To contact the reporters on this story: Lisa Lerer in Washington at llerer@bloomberg.net; Kathleen Hunter in Washington at khunter9@bloomberg.net

To contact the editors responsible for this story: Jodi Schneider at jschneider50@bloomberg.net; Steven Komarow at skomarow1@bloomberg.net

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