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NPR officials, battling calls for cuts to federal funding for public broadcasting, on Tuesday struggled to contain the damage from a “sting” video in which its chief fund-raiser is shown and heard bashing the Tea Party as “racist, racist people” and concluding that the network “would be better off in the long run without federal funding.”

The comments from Ron Schiller, senior VP for fund-raising, gave fuel to critics who see the network as elitist — and provided grist for congressional Republicans who are calling for the elimination of federal funding forpublic broadcasting. Last month, the House passed a continuing budget resolution to fund the federal government for the rest of the year that includes a provision to eliminate funding for the Corp. for Public Broadcasting, which gives grants to public stations and entities like NPR and PBS.

House Majority Leader Eric Cantor (R-Va.) said in a statement that the video “clearly highlights the fact that public broadcasting doesn’t need taxpayer funding to thrive, and I hope that admission will lead to a bipartisan consensus to end these unnecessary federal subsidies.”

The video, from Project Veritas, is another in a series of exposes under the direction of conservative activist James O’Keefe, perhaps best known for his undercover videos of Acorn that sparked a furor in 2009. In the latest video, Schiller and another NPR exec, Betsy Liley, are having lunch at Georgetown hotspot Cafe Milano with two Project Veritas reporters who posed as members of a Muslim organization with ties to the Muslim Brotherhood and offered to donate $5 million to the radio network.

During the lunch Schiller is heard saying that Tea Party members are “xenophobic” and “believe in sort of white, Middle America gun-toting. I mean, it’s scary. They’re seriously racist, racist people.”

After the video was released Tuesday morning to the Daily Caller website, NPR released a statement saying it was “appalled” by Schiller’s comments but also noted that the $5 million check was not accepted.

Later in the day, NPR released a lengthier statement saying that the comments in the video “are contrary to everything we stand for.” “We completely disavow the views expressed….

The assertion that NPR and public radio stations would be better off without federal funding does not reflect reality. The elimination of federal funding would significantly damage public broadcasting as a whole.”

Schiller last week had informed his bosses that he was resigning to take a post with the Aspen Institute in Colorado, but after the video was released NPR said his departure was “effective immediately.”

Video came just as the White House and Senate and House leaders are in talks on the continuing budget resolution, trying to avert a shutdown. Before the video was released, some public broadcasting advocates expressed glimmers of hope that support still remained strong. In an interview with the Hill, the CEO of the Assn. of Public Television Stations, which lobbies for funding, said that he believed that “Republicans in both the House and the Senate want to stand with us and give us a good result in the end.” He could not immediately be reached for comment on Tuesday, and officials with the CPB did not respond to a request for comment.

Overall, stations receive about 15% of their funding from CPB, with smaller and rural stations depending on a greater degree of support. Opponents of continuing federal funding argue that such a gap can be made up via private contributions.

Republicans expressed outrage last October when NPR fired analyst Juan Williams for comments he made about Muslims in an appearance on Fox News. The CPB’s board later issued a statement expressing “deep concern” over how the firing was handled, and said that the “actions of no single institutional leader should put in jeopardy the future of public media.”