Ontario government spending plans optimistic: auditor (Reuters)

TORONTO (Reuters) – Ontario's latest spending forecasts are optimistic and aggressive, the province's auditor general said on Tuesday, which may make it difficult for the government to meet its fiscal targets.

The auditor's report comes just three months ahead of an October election. The governing Liberals are trailing the main opposition Progressive Conservatives in recent polls.

Under legislation introduced in 2004, the Ontario government is required to release a pre-election report on the province's finances, including revenue and spending projections for three years. It also requires that the fiscal plan should be based on modest assumptions.

"It's going to be very challenging ... this is a fairly optimistic and aggressive set of assumptions. Really, things have to go right," Auditor General Jim McCarter told reporters.

"The risk would basically be you have a much higher risk of not meeting your fiscal targets if things that you hope are going to happen don't happen," he added.

McCarter pointed out that the government's plan is largely reliant on its ability to freeze public sector salaries, which make up half of government spending.

However, since the government's announcement to freeze salaries in 2010, he noted that about 60 percent of compensation agreements with the public sector have resulted in pay raises.

The forecasts were in line with the estimates made in the March budget, when the government projected it would take until 2017-18 to eliminate its C$16.3 billion ($16.6 billion) deficit.

McCarter concluded that estimates of revenues and of interest costs on the provincial debt were in fact "prudent and cautious."

Expenditures however -- the other half of the equation that the government actually has control over, versus economically driven revenues -- were viewed with more skepticism.

The auditor's report notes that the government says it will spend an average of just 1.8 percent more in each of the next three years, even though its annual spending growth over the past eight years, after adjusting for large one-time expenses, averaged almost 7 percent.

Ontario Finance Minister Dwight Duncan said in response to the report that he himself has characterized the expenditure assumptions as aggressive, adding the province's deficit targets are not at risk.

"In fact, we have overachieved and he doesn't say that. I think what he says is he talks about reserves, he talks about contingency. He talks about the conservative nature of our revenue projections," Duncan told reporters.

"On balance, I thought his report was fair ... I think we're on target moving forward."

($1=$0.98 Canadian)

(Reporting by Claire Sibonney; editing by Rob Wilson)

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Diplomats draw up plans for post-Gadhafi Libya (AP)

LONDON – Britain says detailed plans have been drafted to help Libya's opposition in the aftermath of Moammar Gadhafi's ouster.

A senior British diplomat, who demanded anonymity to discuss the work, said Friday that a team of officials from the U.K., United States, Italy, Turkey and other nations have spent a month in eastern Libya discussing scenarios with the country's opposition.

The plans, which are expected to be published formally next week, include preparations for policing and the resumption of oil production.

International officials and Libya's Transitional National Council are planning "for the days, weeks and months after Gadhafi has gone," the diplomat said.

He said nations had taken lessons from the chaos following other recent conflicts.

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Turkey plans crisis talks as Syrians pour over border

Istanbul (CNN) -- The Turkish prime minister plans to huddle with a special Syrian envoy on Wednesday in an effort help stem the growing tide of refugees racing into Turkey from conflict-wracked Syria.

The number of Syrians who've crossed the border now stands at 8,421, according to Turkey's disaster and emergency management directorate. That flight has been spurred by violence and a military offensive in the conflict-scarred country, and Turkey is worried that the border crisis could deteriorate and destabilize the region.

"It is impossible for us to remain indifferent to the developments there," Turkish Foreign Minister Ahmet Davutoglu told reporters.

"For us, the Syrians are people who have common future and destiny with us. Therefore, it is out of question to close the door to our Syrian brothers or the (refugee numbers) to stop after 10,000. However, when this turns into a big wave, it also has the potential to become a regional and an international matter."

Syrian security personnel have been carrying out a fierce crackdown against anti-government demonstrators over the past three months. Amnesty International says more than 1,100 people have died.

Turkish Prime Minister Recep Tayyip Erdogan will be meeting with the envoy, who is expected to provide an assessment of the refugee situation and the wider political unrest in Syria, an official from Erdogan's office told CNN.

The envoy represents Syrian President Bashar al-Assad and the meeting follows a telephone conversation Erdogan and al-Assad had on Tuesday.

Davutoglu, who spoke to journalists at the airport in Ankara before flying to Hatay for a visit with the refugees, said Turkey hopes to initiate reforms that would alleviate the volatile conditions leading to the flight of ordinary citizens. He planned to attend the meeting between Erdogan and the Syrian envoy after his visit to Hatay.

Davutoglu said "escalating violence can increase the refugee wave" and Turkey is working on ways "to prevent escalation of violence."

His government touts a foreign policy dubbed "no problems," a strategy to promote good relations with its neighbors, and the Syrian situation has become a challenge for that policy.

Turkey fears a repeat of the enormous Kurdish refugee exodus from northern Iraq in 1991, and the country has spent the last decade promoting cozy relations and lucrative economic ties with Syria's al-Assad.

Over the last month, Erdogan began calling for reform in Damascus in a bid to curb the escalating violence.

"We hope that Syria changes its attitude towards the civilians to a more tolerant one and realize its steps for reform in a more convincing way for the civilians," Erdogan said last week, according to the semi-official Anatolian Agency.

Davutoglu said that Turkey's "wish and effort is for a process to begin at once that can prevent such a wave to continue increasingly."

He pointed to "reforms to be made as soon as possible, conditions to be eliminated that bring security forces and people against each other and to have a more peaceful approach, beyond focusing on security, in the attitude towards the civilian people. If all these were provided, the refugee wave would lessen."

Of the refugees, 4,368 are children and 73 Syrians are now being treated in Turkish hospitals, the emergency directorate said. More than 1,230 tents have been set up in a number of locations.

Actress Angelina Jolie, a longtime goodwill ambassador for the U.N. refugee agency, has submitted an application to visit the refugees in Turkey, Turkish Foreign Ministry spokesman Selcuk Unal confirmed to CNN by phone. He says the government is "evaluating" the request.

Many displaced Syrians have fled toward the border but have not made it over. CNN's Arwa Damon met with some of them at a makeshift campsite on Tuesday in Syria, and they described terrible conditions at the site and frightening and deadly violence.

Many of the refugees have fled from a region that includes Jisr al-Shugur, seized by the Syrian military over the weekend, a network of human rights activists said.

The Syrian government insists it is stopping "armed terrorist groups" who carried out a "massacre" in the city -- the killing 120 members of the security forces.

Opposition activists say the government's claims are a ruse to justify a crackdown on demonstrators demanding government reform, in keeping with the wave of political protests across the Middle East and North Africa this year.

But Syrian refugees who have fled to Turkey said some Syrian soldiers rebelled after being ordered to fire on unarmed protesters and instead started fighting among themselves.

Syria's Cabinet on Tuesday hailed efforts by the army and security forces to restore calm in the Jisr al-Shugur area and surrounding villages, according to the state-run Syrian Arab News Agency.

Adnan Mahmoud, the information minister, said the Cabinet urged citizens "who were forced to leave their homes to come back after calm and security were restored in the area," SANA said.

The minister said the Cabinet "assigned the Syrian Arab Red Crescent to contact the Turkish Red Crescent for cooperation to facilitate the Syrian citizens' return to their homes, noting that all necessary needs will be provided to secure the return, including medical aid for the patients and the injured."

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ECB tries to squash 'fruitless' EU plans for Greece (AFP)

FRANKFURT (AFP) – European Central Bank executives struggled last week to parry European Union plans to aid Greece via potentially risky schemes that could see Athens declared in default on its sovereign debt.

ECB president Jean-Claude Trichet, vice president Vitor Constancio and chief economist Juergen Stark argued that any moves that obliged private investors to take part in a Greek bail-out were fraught with danger.

Stark called Friday in Frankfurt for an end to what he said was a "really fruitless discussion" on private sector involvement.

"The real issue is the (reform) programme for Greece and to implement the programme in full," he stressed.

Trichet warned Thursday of the dangers of a "selective default" that could wreak havoc across the 17-nation eurozone.

And Constancio added a final note of caution. The idea of a concerted, or orderly reduction on the amount of money Greece owed -- known as a haircut in financial markets -- was "definitely a very dangerous path", he said.

Even a mooted rollover of bonds by private creditors, which the ECB does not intend to do with the Greek debt it owns, would not necessarily resolve the Athens' debt crisis, the ECB executives said.

International ratings agency Moody's, for one, said it might still be considered a default if it was not clearly voluntary on the part of creditors.

Stark warned that new bonds might not qualify as collateral against ECB loans.

Governments and other policy makers shaping the new Greek bailout base efforts on "the underlying assumption that the ECB would continue to accept" rolled-over Greek debt as collateral for its liquidity operations, Stark said.

But he warned: "This remains to be seen."

A refusal would leave the commercial Greek banks, which own much of the country's debt, dead in the water -- for many of them are already dependent on the ECB for funds.

Any collapse of the Greek financial sector could threaten countries such as Ireland and Portugal, which are also struggling with heavy debt and have accepted international bail-outs.

EU leaders are nevertheless pushing ahead with plans to involve private investors in the next rescue plan for Greece.

It has already benefitted from an initial package worth 110 billion euros ($160 billion) backed by the EU and International Monetary Fund.

EU president Herman Van Rompuy said Friday that he was confident a new aid package for Greece could be agreed by the end of June.

The upcoming EU summit on June 23-24 is shaping up to focus primarily on another rescue for Athens, which is said to need 90 billion euros more.

In recent days, attention focused on an initiative likened to a 2009 deal in which investors simply rolled over maturing bonds. But the European Commission now suggests the Greek deal could go even further.

"We have also examined the feasibility of a voluntary debt rescheduling or reprofiling, of course on the condition, extremely important, that this would not create a credit event," said Amadeu Altafaj, spokesman for EU economic affairs commissioner Olli Rehn.

Greek Finance Minister George Papaconstantinou said a new rescue package should be a combination "of funds coming from the country's planned privatisations, the voluntary participation of the private sector and possible loans" from eurozone countries.

In Berlin, German Finance Minister Wolfgang Schaeuble said eurozone finance ministers would create a working group to find a way to involve private investors in any new aid.

A second rescue plan was "inevitable", he told German lawmakers.

But it should establish "a fair distribution of risks between the taxpayer and private creditor", to signal "that you cannot simply dump the risk on the taxpayer".

Constancio insisted that it was the responsibility of EU governments to "find the mechanisms that do not create the type of risks that we are concerned about".

Finally, Trichet repeated a call for stronger eurozone economic governance, a long-term project that would require capitals to relinguish some sovereignty to ensure a stronger future.

"We should ourselves 'learn to think (more) continentally'," Trichet told a conference of analysts and other ECB observers, quoting Alexander Hamilton, a US founding father who established that country's first national bank.

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Defiant Iran plans big rise in nuclear enrichment (Reuters)

TEHRAN (Reuters) – Iran will shift its production of higher-grade uranium to an underground bunker and triple production capacity, it said on Wednesday in a defiant response to charges of trying to make atomic bombs.

"This year, under the supervision of the (International Atomic Energy) Agency, we will transfer 20 percent enrichment from the Natanz site to the Fordow site and we will increase the production capacity by three times," state broadcaster IRIB quoted the head of Iran's atomic energy agency, Fereydoun Abbasi-Davani, as telling journalists after a cabinet meeting.

Iran only disclosed the existence of Fordow, a mountain bunker near the clerical city of Qom, in September 2009, after Western intelligence had detected it and said it was evidence of covert nuclear work.

The decision to move and boost production drew immediate censure from the West, which has imposed a series of sanctions on Iran to try to force it to halt enrichment -- a process that can make weapons material if done to a much higher level.

Holing up in Fordow could provide greater protection for Iran's sensitive, uranium-purifying centrifuges in the face of threatened U.S. and Israeli air strikes.

"This announcement is a provocation," the French Foreign Ministry said in a statement.

"It reinforces the international community's existing concerns over the intransigence of the Iranian authorities and their persistent violation of international law."

Iran denies seeking nuclear weapons and says it is enriching uranium for electricity production and medical applications.

But its decision last year to raise the level of enrichment from the 3.5 percent purity needed for normal power plant fuel to 20 percent worried countries that saw it as a significant step toward the 90 percent needed for bombs.

The In1stitute for Science and International Security, a U.S.-based think-tank, said that the Fordow plan could, a year after its implementation, enable Iran "to more quickly break out and produce enough weapon-grade uranium for a nuclear weapon, if it chose to do so."

RAISING THE STAKES

The Vienna-based IAEA, whose 35-nation board began a discussion on Iran's nuclear program on Wednesday, said it had only learned of the plan from media reports.

"Iran has not yet informed the agency of any such decision," IAEA spokeswoman Gill Tudor said.

The European Union said it noted the announcement with deep concern and said Iran was "further exacerbating its defiance" of the U.N. Security Council.

Iranian media portrayed the announcement as a defiant response to tightened sanctions and IAEA chief Yukiya Amano's assertion on Monday that he had received new evidence of possible military dimensions to Iran's nuclear work.

President Mahmoud Ahmadinejad accused Amano of taking orders from Washington.

After Ahmadinejad said on Tuesday that no incentive from world powers could persuade Iran to give up enrichment, President Barack Obama said further sanctions were likely.

"Iran certainly is raising the stakes," said proliferation expert Mark Fitzpatrick at the London-based International Institute for Strategic Studies.

"There is absolutely no justification for producing any more 20 percent enriched uranium at all, since any reactors that would use it are far off into the future," he said. "Tripling the production rate would be highly provocative."

Iran says it needs 20 percent uranium to make fuel for a medical research reactor after talks on a swap -- under which other countries would have supplied the material -- broke down.

"After we increase the production capacity in Fordow by three times, then we will stop the 20 percent section of the Natanz site and will transfer it completely to Fordow," Abbasi-Davani said, adding the transfer would start this year.

In its latest report on Iran, in late May, the agency said Iran had told it in February of plans to begin feeding nuclear material into enrichment cascades at Fordow "by this summer."

But the IAEA added that as of May 21 no centrifuges had been introduced into the facility.

Abbasi-Davani said Iran had completed technical development of a new generation of centrifuges and they would be installed at both sites.

(Additional reporting by Fredrik Dahl and Sylvia Westall in Vienna and Vicky Buffery in Paris; Writing by Robin Pomeroy; editing by Dan Williams)

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Turkey defends Internet filtering plans (AP)

ANKARA, Turkey – Turkey's government has defended a new regulation that will filter the Internet and restrict access to websites that show pornography, bomb-making and violent content.

Deputy Prime Minister Bulent Arinc said Tuesday that among websites the government wants restricted are also those "explaining how to kill your wife."

Critics say the new regulation, set to come into effect in August, amounts to more censorship in an already heavy-handed effort to control information.

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Arizona's governor to reveal plans for immigration law

Judges have blocked implementation of Arizona's SB 1070Gov. Jan Brewer says the ruling harms "the safety and well-being of Arizonans"She is expected to announce Monday whether her state will fight the injunction

(CNN) -- Arizona Gov. Jan Brewer and Attorney General Tom Horne will announce Monday what legal steps, if any, they're prepared to take following an injunction of the state's controversial immigration law, which is opposed by the Obama administration.

Among other things, the legislation would have required local law enforcement in Arizona to apprehend and help deport illegal immigrants. The Justice Department sued, arguing that only the federal government has that authority.

Last month, a three-judge panel on the U.S. Court of Appeals for the 9th Circuit sided with the U.S. Justice Department and against Brewer, who signed the measure known as SB 1070 into law last year.

Brewer's legal team could ask the full 9th Circuit to revisit the issue, take the case directly to the U.S. Supreme Court, or choose to do nothing at all, said Matthew Benson, Brewer's spokesman.

Brewer and Horne have scheduled an 11 a.m. (2 p.m. EDT) news conference on the matter.

The Justice Department lawsuit led to the original court decision by U.S. District Judge Susan Bolton last July, temporarily blocking the law's most contested parts just a day before they were scheduled to go into effect. That included the requirement that local police officers should check a person's immigration status while enforcing other laws.

The appeals court ruling last month upheld Bolton's ruling.

Brewer said at the time that the decision harms the "safety and well-being of Arizonans."

"For decades, the federal government has neglected its constitutional duty to American citizens by failing to secure the border," she said. "States like Arizona have borne the brunt of that failure."

The legislation has a variety of supporters and detractors.

Republican lawmakers, Maricopa County Sheriff Joe Arpaio and other state governments were among those filing briefs with the appeals court supporting Arizona's argument. The Mexican government, the Anti-Defamation League, the American Immigration Lawyers Association and the city of Tucson, Arizona, were among those filing briefs supporting the Justice Department's side.

In its lawsuit, the Justice Department challenged only six of the Arizona law's provisions, meaning others went into effect in July.

That includes a ban on "sanctuary cities," or municipalities with laws or policies that render them relatively safe for undocumented immigrants. Bolton's ruling also allowed a provision making it illegal to hire day laborers if doing so impedes traffic. In addition, the ruling allowed parts of the law dealing with sanctions for employers who hire illegal immigrants.

The decision in April sided with the U.S. Justice Department, largely on the argument that federal immigration policy would be greatly undermined -- as might America's standing in the world -- if individual states adopted their own separate immigration laws. Doing so, the ruling contends, essentially means a given state is adopting its own foreign policy, one that may be in opposition to national policy.

"That 50 individual states or one individual state should have a foreign policy is absurdity too gross to be entertained. In matters affecting the intercourse of the federal nation with other nations, the federal nation must speak with one voice," the ruling says.

In February, Brewer announced that Arizona had filed a countersuit against the federal government, seeking the authority to implement its own border security efforts.

At that time, Homeland Security Department spokesman Matt Chandler called Arizona's court claim a "meritless" one that "does nothing to secure the border."

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Embattled Nevada senator plans to resign

John Ensign: "I will not continue to subject my family, my constituents, or the Senate to any further rounds of investigation." STORY HIGHLIGHTSThe Nevada senator is the focus of a Senate ethics investigationEnsign previously had said he would not run for re-election next yearTwo Nevada Congress members announced previously they will run for Ensign's seat Washington (CNN) -- Republican Sen. John Ensign of Nevada, who is under an ethics investigation by the Senate, announced Thursday that he will resign his seat on May 3.

Ensign had previously said he would not run for re-election in 2012 following revelations that he had an affair with a female aide who was the wife of another top aide, and that his parents subsequently gave money to the aides' family.

"While I stand behind my firm belief that I have not violated any law, rule, or standard of conduct of the Senate, and I have fought to prove this publicly, I will not continue to subject my family, my constituents, or the Senate to any further rounds of investigation, depositions, drawn out proceedings, or especially public hearings," Ensign said in the statement. "For my family and me, this continued personal cost is simply too great."

Ensign: There are consequences for sin

Ensign has admitted to having an affair with Cindy Hampton, a campaign aide and the wife of Ensign's former chief of staff, Doug Hampton. Investigators are looking into efforts by Ensign to assist the Hampton family by providing a nearly $100,000 payment to them, arranging lobbying work for Doug Hampton, and possibly meeting with Doug Hampton on a lobbying matter in violation of Senate rules.

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High Prices, Debt Crisis May Doom Obama's Green Energy Plans

Reuters

As Congress and President Obama spar over spending cuts for the next year and beyond, new questions are being raised over whether the U.S. can afford the clean energy subsidies that the president has championed in several appearances this year and in his budget for fiscal year 2012.

Obama is asking taxpayers to cough up $8 billion in clean energy subsidies next year -- $3.2 billion for energy efficiency and renewable energy programs, $300 million in credit subsidies to promote those projects, and another $550 million dollars to support "game-changing clean energy technologies."

Click here to get the taxpayer calculator to add up your contribution to clean energy spending.

"We say to the utilities, you've got to get this much energy from renewable sources, and then wind is competing with solar, which is competing with natural gas. And there's a healthy competition out there," the president said at a recent town hall meeting at a wind turbine plant run by Gamesa Technology Corporation in Fairless Hills, Pa.

But critics question whether there really is healthy competition among old fossil and new clean technologies when subsidies are taken out of the equation.

"When companies come to Congress or to the federal trough for their renewable project, it usually means that they have failed in the private sector," said Marc Morano, of Climate Depot, a website devoted to debunking the theory of man-made climate change.

He says an increasing number of studies point to deep inefficiencies of many so-called clean energies.

"In Europe, it's actually costing more to heat the windmills than the windmills are producing in the winter in the United Kingdom. I mean they're just not energy efficient," Morano said.

But supporters of the clean energy subsidies counter that fossil fuel production has long been subsidized.

"Clearly there's a double standard," said Kevin Smith of Solar Reserve, a company that builds utility scale solar arrays in the Southwest U.S. "If you look at what's happened with natural gas, oil and coal subsidies over the last 50 years, those industries have received billions and billions of dollars. They've built profitable industries that are now very successful."

Even Morano suggests that as the technologies evolve, renewable energies may one day prove to be more competitive. But that day may be a long way off.

Indeed, a recent article in the Las Vegas Sun which examines a heavily subsidized solar array project outside of Boulder City, Nev., supports much of what Morano claims.

The piece profiles a huge 775,000 solar panel array built and operated by Sempra Generation. Taxpayers fronted $42 million in tax credits for the array -- fully a third of it's total cost. While the project created about 350 construction jobs at a time of near record high unemployment, it now employs only five full time workers and provides no electricity to Nevada.

A spokesman for Sempra Generation told Fox News that the project, built last year, has now become a net revenue generator for taxpayers, and produces enough electricity for about 14,000 homes. The company mostly sells it's electricity to utilities in California.

For some, the larger question is whether the Obama administration, in the present climate of belt-tightening will allow carbon-based energies to truly compete with renewables on a level playing field -- a subsidy-free playing field.

Days before his confirmation as secretary of energy, Steven Chu told an interviewer that the United States needed to get gasoline prices up to European levels, where current prices are hovering around $8 a gallon.

More than two years later, that hope is approaching reality -- a result of increasing world demand, instability in key oil producing regions of the world and the Obama administration's resistance to freeing up domestic federal lands and waters to oil and natural gas drilling as well as coal mining.

The limit of a fragile economy's tolerance for high energy prices may be tested in the months to come, as will the president's hopes for a clean energy future.

Should taxpayers subsidize any energy technology?customer surveys

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Comparing deficit plans

s health care law.

STORY: Health care law gets day in courtSTORY: Obama calls for deficit cutsSTORY: Medicare at the center of budget debateSocial Security

•Obama: Calls for bipartisan efforts to address the retirement program without privatizing it or slashing benefits in the future..

•Fiscal Commission: Gradually increases retirement age to 68 by 2050 and 69 by 2075; raises the amount of income subject to Social Security taxes in 2020 from about $168,000 to $190,000.

•Bipartisan Policy Center: Raises the taxable income ceiling to $190,000; trims benefits for wealthier beneficiaries; indexes the benefit formula to pay early retirees less and older retirees more.

•House Republicans: Creates a process under which Congress would have to address the retirement program

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GE jumps into the solar panel business with plans to build a big plant

s renewable energy business.

The company did not say where the factory would be built. Abate said it would eventually employ 400 people and be producing panels by 2013. The plant would have the capacity to build 400 megawatts worth of panels a year, enough to power about 80,000 homes.

By comparison, First Solar will have 2,300 MW of capacity by the end of this year.

Still, analysts say GE

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Boehner Plans to Pass Spending Cuts With GOP Help Alone

Associated Press

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WASHINGTON –  Sometimes in politics and legislation, whether you win is less important than how you win.

That's the dilemma facing House Speaker John Boehner as he tries to round up the votes to pass a fast-approaching spending compromise and avert a partial government shutdown by week's end.

Boehner, R-Ohio, wants the overwhelming majority of those votes to come from his fellow Republicans, even if dozens of easily attainable Democratic votes could help carry the budget bill to victory.

The goal complicates Boehner's task, and possibly could push the bill farther to the right. It motivates him to battle for the votes of conservative Republicans who are demanding deeper spending cuts, and greater changes to social issues such as abortion access, than the Democratic-controlled Senate and President Barack Obama say they can accept.

If Boehner can argue convincingly that it's the only route to House passage, Democrats conceivably could yield on some points they might otherwise win. At the same time, however, Boehner is trying to persuade Republicans that some compromise is inevitable.

"We control one-half of one-third of the government," he said last week. "We can't impose our will on the Senate."

Eventually, both parties must decide where to draw the line in negotiations and whether to risk a government shutdown that could trigger unpredictable political fallout.

Some congressional veterans say Boehner is taking the only realistic approach for a speaker who wants to stay in power. If he cuts a deal that relies heavily on Democrats' votes, he could alienate scores of House Republicans, who might in turn start seeking a new leader.

Members of both parties say Boehner probably could assemble 218 votes easily, if he didn't care who cast them.

President Obama pressed the House and Senate leaders Saturday to agree to a budget in time to avert what he says would be an economically harmful government shutdown, but restated his opposition to certain spending cuts and other provisions insisted upon by Republicans.

Obama delivered the message in separate telephone conversations with Boehner, and Senate Majority Leader Harry Reid, D-Nev., the White House said.

Negotiations continued Saturday on a bill to fund government operations through Sept. 30, the end of the budget year. They have zeroed in on cuts in the $33 billion range, but haven't agreed on where to make them.

Government funding expires at midnight Friday. Much of the government would shut down without a new budget in place.

Obama told the leaders that he opposes using the budget process to "further an ideological agenda" by pursuing issues that aren't related to reducing spending or the deficit, the White House said. Obama also said he objects to cuts that would undermine economic growth and job creation.

He said shutting the government would hurt the economy just as it's beginning to create jobs. On Friday, the government reported that the unemployment rate had fallen to a two-year low of 8.8 percent in March and that the economy added 216,000 jobs last month.

After keeping a low profile and delegating the negotiating to Vice President Joe Biden, his budget director and other White House aides, Obama has begun to press publicly for a deal as this latest deadline nears. He has signed several short-term spending bills to keep the government in business.

He said Friday that compromise was within reach.

But Boehner said Saturday in the weekly Republican address, recorded before he spoke with the president, that "there is no agreement.

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