Obama Says He Will Not Sign Stop-Gap Solution On The Debt
President Barack Obama told the press Monday morning that he would refuse to sign any temporary spending measure that would delay a final deal on a plan to reduce the federal deficit. At Monday's press conference, he repeatedly chastized Republican leaders for refusing to budge on their opposition to parts of his $4 trillion debt-reduction plan that would raise revenues.
House Speaker John Boehner exited negotiations after a 75 minute meeting Sunday, saying the Democrats were not backing down on their attempts to include taxes in the package.
Republicans will not agree to raise the nation's $14.29 trillion borrowing limit until a debt-reduction deal is made. If the debt ceiling is not raised by Aug. 2, the U.S. will begin to default on some of its obligations. Treasury Secretary Timothy Geithner has said that a default would result in higher interest rates and have a crippling effect on the economy.
The Economist magazine, which favors small government, argues in an editorial this week that both parties have exercised fiscal "recklessness," but that the Republicans' insistence on a revenue-less plan is wholly irresponsible.
LIVE BLOG (Most recent updates at the top)
Obama takes questions from the press:
Obama: We are looking at a "whole menu" of options, including changing some regulatory practices that hamper economic growth.
Q: Is John Boehner in control of his own caucus?
Obama: "We assume the patriotism and good intensions of the other side." Deflects question of whether or not Boehner's exit from the debt talks has shaken his confidence that a deal can get done.
Q: Have you spoken to business leaders about these issues?
Obama: "Business leaders" I've talked to privately say they would like a "resolution" and would be open to a "balanced approach."
Cites Warren Buffett, who recently called on the government to reach an agreement to raise the debt ceiling.
Sam Stein: Is now really a good time to cut government, while we have 9.2 percent unemployment?
Biggest job losses have been in the public sector. President would like to continue providing more help to states, but political realities make that impossible.
Not saying that solving the deficit solves unemployment.
"If the country as a whole sees government act responsibly," that will help businesses and foreign investors feel more confident, thereby improving growth and employment. This is the "primary solution" Republicans have offered. So, "what's the hold-up?"
"Social Sercurity is not the source of our deficit problems. The reason to do Social Security is to" make sure benefits are there for seniors in the future.
Q: Isn't the problem that you have failed to convince the public at large?
Obama: "We're paid to worry about" these issues. Most Americans don't know the political and economic ins and outs.
If we default and interest rates go up, Americans won't like that.
For Republicans to say that we shouldn't raise the debt ceiling is irresponsible. "I'd rather be talking about stuff that everyone welcomes, like new programs."
Leaders have to "step up and do the right thing."
Pressure on John Boehner to "persuade his caucus" to "do something big."
Obama calls on progressives to support moves to make entitlement programs "more sustainable."
First question: What happens if Republicans don't budge on revenues?
Obama: "I will not sign" a 30-, 60- or 90- day resolution. "I'm prepared to take significant heat" from Democrats in order to get something done.
"Happy" to work with Republicans on tax reform. "Nobody's looking to raise taxes right now." We're talking about 2013 and beyond, he says.
"I have bent over backwards."
"If the basic proposition is my way or the highway," Obama doesn't see a deal getting done.
Tells leaders, "the things I will not consider" are "temporary stop-gap" resolutions to this problem. We don't "risk default because we can't put politics aside."
"I continue to push" Congress for the biggest deal possible. Democrats are resisting any entitlement reform, while Republicans are resisting anything on revenues.
Leaders have agreed on a leaner, meaner government. Cuts agreed upon include defense spending.
Both parties need to put their "sacred cows" on the table.
"Now is the time to deal with these issues. If not now, when?"
According to an article in POLITICO, the current debt talk limbo demonstrates the weak position of House speaker John Boehner within a Republican party that is unwilling to compromise on including revenue increases in a deficit reduction plan. “It’s crazy to think the speaker was considering a trillion [dollars] in tax increases. After all, we’re the anti-tax party,” said "one veteran Republican lawmaker close to leadership."
Read our post on the stalled debt talks:
President Barack Obama's plans of seeking a $4 trillion debt reduction deal over the course of a decade is met with strong opposition from GOP members. Despite concerns of missing the Aug. 2 deadline and subsequent concerns of defaulting on loans, White House officials say the President will continue to seek the biggest deal.
In regards to the discussion of the debt ceiling and deficit reduction, both parties agree a $4 trillion plan would, "make a serious dent in our deficit." The impasse, however, lies with the sacrifices needed to be made by both parties.
The plan as proposed by Obama requests both cuts in spending as well as a increases in taxes--the latter of, which is out of the question in the views of GOP leaders. Senate GOP leader Mitch McConnell called plans of tax hikes a "terrible idea" and a, "job killer" during the country's current 9.2 percent unemployment rate.
Instead, Republican leaders are looking for options with high spending cuts.
From the Los Angeles Times:
Republicans favor spending cuts only, while Obama has pushed for a more balanced effort that cuts spending but brings additional deficit reductions through more revenue by closing tax loopholes and ending some tax breaks for the wealthiest Americans. The administration's position is that $4 trillion in deficit reductions is not possible through spending cuts alone without massive cuts in entitlement programs such as Social Security and Medicare, proposals that the White House and many Democrats reject.
Democrats in the debate have also voiced concerns with the $4 trillion plan, however, citing a plan focused heavily on spending cuts will harm existing social programs like Medicare and Medicaid.
Seeking areas of mutual agreement, House Speaker John Beoehner proposed, Saturday, a more modest debt reduction plan of $2 billion should be considered--one previously brought forth by the Vice President Joe Biden, which relies heavily on spending cuts.
House Majority Leader, Eric Cantor also said a $2 trillion spending cut could serve as a framework for bipartisan agreement.
According to an analysis by the nonpartisan Committee for a Responsible Federal Budget in Washington, there are areas of overlap in debt-reduction plans proposed by House Republicans and the White House, meaning they are likely to be included in any smaller-scale debt deal.
These include: eliminating some interest subsidies on student loans, which could save $20 billion to $65 billion over 10 years; changing the way the Pension Benefit Guarantee Corp. collects fees, to save $5 billion to $10 billion; selling excess federal property for $10 billion to $15 billion; and reducing health-care fraud and overpayments, at $10 billion to $35 billion.
Bipartisan talk are expected to continue at the White House on Sunday 6 p.m. EDT.