With lawmakers at a loggerheads over the direction of the federal budget, Senate Democrats are pouncing on a new report that predicts the House government spending measure would weigh down the economy. 

A Goldman Sachs economist, in a study that has been published on ABC News’s website, said the House proposal to cut some $61 billion from current spending levels for the rest of fiscal 2011 would drag gross domestic product growth down by 1.5 to 2 percentage points in the second and third quarter. 

President Obama urged Republicans and Democrats to come together on a budget-cutting deal in his yearly economic report issued Wednesday; his chief economic adviser projected confidence a deal can be done. 

Republicans are demanding deep cuts to spending this year, while the White House is pushing a freeze combined with targeted spending it calls investments to “win the future.” An inability to agree on a 2011 funding bill could shut down the government after March 4.

“We cannot solve our fiscal problems on the backs of our most vulnerable citizens. And it would also be a mistake to cut the deficit by gutting our investments in innovation and education, which are so critical for our future prosperity,” Obama wrote in the report. “The fact is, priorities like education, innovation, and infrastructure have traditionally commanded bipartisan support. There are no inherent ideological differences that should prevent Democrats and Republicans from improving our economy.”

Council of Economic Advisers Chairman Austan Goolsbee told reporters that the private sector shows no nervousness about a government shutdown because most people think it is unlikely to happen.

He said in his view, congressional leaders “believe they are going to get a deal" and "there is not a lot of fear in the private sector on that because they think they are going to get a deal done."

Four Senate Democrats are opposing GOP efforts to roll back net neutrality rules through spending legislation.

Republican Sen. John Cornyn (Texas) urged legislators in his state on Wednesday to press Congress to approve a balanced-budget amendment. 

Cornyn, who has introduced legislation that calls for a balanced-budget amendment to the Constitution, applauded his state's leaders who have suggested holding a constitutional convention to begin the process. 

"I believe they are on to something," Cornyn wrote in an op-ed on Tylerpaper.com on Wednesday. "Not only is a convention one way to begin the amendment process, but it's proven to help motivate Washington to adopt needed reforms. A balanced budget amendment is vital to shrinking our out-of-control debt."

Former New Mexico governor Bill Richardson (D) has joined APCO Worldwide, a global public relations firm.

Richardson has been named chairman of the firm's executive advisory service, Global Political Strategies (GPS). 

"Given his strong leadership qualities, his extraordinary achievements in government and business and his global knowledge and experience, we know he's the right person to head this high-caliber group," said Margery Kraus, APCO's founder and CEO, in a statement. 

"I am very pleased to be affiliated with APCO Worldwide through my new role as GPS chairman, and I look forward to working with colleagues and clients, old and new," Richardson said. 

A former House member, Richardson served in the Clinton administration as ambassador to the United Nations and Energy secretary. He was elected as New Mexico governor in 2002 and served two terms.

Richardson failed to win the Democratic presidential nomination in 2008. He was later nominated for commerce secretary by President Obama but withdrew his nomination due to a federal investigation into alleged improper government contracting in New Mexico. Prosecutors later dropped the probe.

Americans paid slightly less in state and local taxes in 2009 than the year, as income did not drop as rapidly as tax revenue, according to the nonpartisan Tax Foundation. 

The tax group, in a study released Tuesday, reported that state and local tax burdens stood at 9.8 percent in 2009, down just a bit from 9.9 percent in 2008. 

The hot debate on new limits on debit-card fees reached an official milestone Tuesday night, after the Federal Reserve closed the door on public comments on its proposed rules.

The debate over the so-called Durbin amendment came to a semi-official close at midnight Tuesday. However, with billions in revenue at stake, the battle pitting banks against retailers, fighting over how much banks can charge merchants for swiping debit cards, is expected to rage publicly for some time.

Sales of previously owned homes rose for the third straight month in January, hitting an eight-month high as prices dropped and investors snapped up foreclosed homes and distressed properties. 

Purchases of previously owned homes, which include single-family, townhomes, condominiums and co-ops, increased 2.7 percent, to 5.36 million, in January, ahead of expectations, from a downwardly revised 5.22 million in December, the National Association of Realtors (NAR) said Wednesday. 

For the first time in seven months, the sales pace was higher than a year earlier, up 5.3 percent from the 5.09 million level in January 2010.

Republicans and their allies are keeping up the pressure on vulnerable Democratic lawmakers early in the campaign cycle.

Crossroads GPS, the group conceived of by GOP strategists Karl Rove and Ed Gillespie, announced Wednesday that it's purchased $450,000 worth of radio airtime, the bulk of which is in a dozen Democratic-held swing districts.

The group's ad targets Democrats who voted against the Republicans' continuing resolution (CR), the funding measure passed by the House on Saturday that cuts $61 billion from current spending.

Opening with a quote from the late President Ronald Reagan, the Crossroads ad talks about the "explosive growth of government."

"Members of Congress like Joe Donnelly voted to continue the failed spending policies of Pelosi and Obama. They just don't get it," the announcer says in the minute-long ad. Indiana's Donnelly edged out his Republican challenger in 2010 with 1 percent of the vote.

The group's largest expenditure — more than $63,000 — is in New York's 1st district, where Rep. Tim Bishop (D) squeaked out a reelection victory almost a month after Election Day. The group also purchased airtime in 10 Republican-held swing districts thanking the members for their vote on the CR.

Meanwhile, the National Republican Congressional Committee followed up the release of its first TV ad earlier this week with a round of auto-calls in the districts of 10 "vulnerable Democrats," according to a release. Utah Rep. Jim Matheson (D), who was on the receiving end of the TV ad, also gets hit with the call.