Los Angeles City Council members responded Friday to a lacerating report on the city's economic health, calling it a much needed assessment while arguing that it failed to fully acknowledge the progress made so far in carving away a staggering budget deficit.

Two days after the 13-member Los Angeles 2020 Commission released a report saying the city is experiencing "continued economic decline" and a crisis of leadership, council members voiced their own frustration about their efforts to combat poverty, attract jobs and deliver basic services.

But they also argued that the 43-page document, entitled "A Time for Truth," did not reflect recent efforts to put the city's financial house in order — including cutting the workforce by 5,300 people and paring back retirement benefits for future city workers. Councilman Paul Krekorian, who heads the council's Budget and Finance Committee, said that in 2010 the city was projecting a $1.1-billion shortfall for the current fiscal year. That sum has been chopped by 80%, he said.

"If it's a time for truth, we should also acknowledge that part of the truth is a dramatic degree of progress in what has been a nagging, nagging problem for the city for many years," Krekorian told members of the 2020 panel who attended Friday's council meeting.

The commission's report was unsparing in various passages, saying decision makers had "evaded the hard choices facing local government and municipal finance" and bemoaning a host of urban ills: low graduation rates, depressed wages, rising public safety response times and ongoing traffic congestion. In one passage, the report said the city had made "modest strides" in reducing the size of the deficit.

In recent days, the commission's chairman, former U.S. Commerce Secretary Mickey Kantor, has tried to soften that message by personally praising Council President Herb Wesson and Mayor Eric Garcetti, who spent 12 years on the council. Kantor commended lawmakers for taking steps to address rising pension costs and tackle difficult issues, such as modernization of the airport and harbor.

"A lot of people say this is about the council, it's about the mayor, it's about the city attorney, it's about the city controller. No. No, sir," Kantor told the council. "It's about all of us."

Councilman Mike Bonin, who represents part of the Westside, was one of the few council members to push back on specific findings in the report, saying it wrongly took aim at NIMBYs — a catch phrase used to describe those who stake out positions against real estate development projects. He also noted that the 2020 panel delivered a considerably mellower message in person than the one that was posted on its website earlier this week.

"The commission's verbal presentation gave a better accounting of the progress that has been made than the written report," he said.

Former mayoral aide Austin Beutner, who served on the panel, said the document tried to acknowledge that progress had been made while also showing that much more work is needed. "We were limited to 20 pages" of findings, he said. "This wasn't supposed to be the 'Odyssey' or the 'Iliad.'"

Krekorian's budget committee will take another look at the commission report in coming weeks. The L.A. 2020 commission is scheduled to deliver its second report, a list of recommendations, in 90 days.

Councilman Paul Koretz advised the panel not to propose ideas that it knows the council will ignore. "It would be possible, for instance, to solve some of our budget problems if we found some way to cut all of our employees 20% in the next budget negotiations," he said. "We're not going to do that. So even if it would solve the problem, please don't suggest that."

Seven of the council's 15 members have taken office since July and have not yet had to cast major votes on the city budget. As they discussed the report, lawmakers largely sidestepped the commission's assertion that the city is facing a crisis of leadership, opting instead to praise each other's work so far.

Councilman Jose Huizar asked the 2020 panel to offer ways of changing the city's government structure to allow for bolder leadership. But he also said the council has benefited from having several members who are former Sacramento lawmakers.

"As a whole this is one of the best councils that I've seen," he said.

david.zahniser@latimes.com

catherine.saillant@latimes.com