President Obama on Tackling our Debt and Deficit

Earlier today, President Obama held a press conference to give an update on the ongoing efforts to find a balanced approach to get our fiscal house in order and reduce our nation’s deficit to help our economy grow. The President believes this is the moment to put politics aside, rise above the cynicism, and prove to the American people that Washington can solve problems and do big things.  As he has said, “If not now, when?”   

To solve our deficit problems, the President is willing to make tough choices -- it’s time for members of both parties to do the same. But, solving our fiscal problems requires shared sacrifice -- which means the wealthiest and special interests should pay their fair share. 

Here are a few highlights from today’s press conference:

Tackling Our Debt and Deficit

What I emphasized to the broader group of congressional leaders yesterday is, now is the time to deal with these issues.  If not now, when?  I've been hearing from my Republican friends for quite some time that it is a moral imperative for us to tackle our debt and our deficits in a serious way.  I've been hearing from them that this is one of the things that's creating uncertainty and holding back investment on the part of the business community.  And so what I've said to them is, let's go. And it is possible for us to construct a package that would be balanced, would share sacrifice, would involve both parties taking on their sacred cows, would involved some meaningful changes to Medicare, Social Security, and Medicaid that would preserve the integrity of the programs and keep our sacred trust with our seniors, but make sure those programs were there for not just this generation but for the next generation; that it is possible for us to bring in revenues in a way that does not impede our current recovery, but is fair and balanced. 

We have agreed to a series of spending cuts that will make the government leaner, meaner, more effective, more efficient, and give taxpayers a greater bang for their buck.  That includes defense spending.  That includes health spending.  It includes some programs that I like very much, and we – be nice to have, but that we can’t afford right now.

Putting Politics Aside

So I continue to push congressional leaders for the largest possible deal.  And there's going to be resistance.  There is, frankly, resistance on my side to do anything on entitlements.  There is strong resistance on the Republican side to do anything on revenues.  But if each side takes a maximalist position, if each side wants 100 percent of what its ideological predispositions are, then we can’t get anything done.  And I think the American people want to see something done.  They feel a sense of urgency, both about the breakdown in our political process and also about the situation in our economy.

So what I’ve said to the leaders is, bring back to me some ideas that you think can get the necessary number of votes in the House and in the Senate.  I’m happy to consider all options, all alternatives that they’re looking at.  The things that I will not consider are a 30-day or a 60-day or a 90-day or a 180-day temporary stopgap resolution to this problem.  This is the United States of America, and we don’t manage our affairs in three-month increments.  We don’t risk U.S. default on our obligations because we can’t put politics aside. 

Asking Very Wealthiest to Pay Fair Share

I want to be crystal clear – nobody has talked about increasing taxes now.  Nobody has talked about increases – increasing taxes next year.  What we have talked about is that starting in 2013, that we have gotten rid of some of these egregious loopholes that are benefiting corporate jet owners or oil companies at a time where they're making billions of dollars of profits.  What we have said is as part of a broader package we should have revenues, and the best place to get those revenues are from folks like me who have been extraordinarily fortunate, and that millionaires and billionaires can afford to pay a little bit more…

And what I've also said to Republicans is, if you don't like that formulation, then I'm happy to work with you on tax reform that could potentially lower everybody's rates and broaden the base, as long as that package was sufficiently progressive so that we weren’t balancing the budget on the backs of middle-class families and working-class families, and we weren’t letting hedge fund managers or authors of best-selling books off the hook.

Protecting Critical Investments

If you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up.  I mean, it’s not an option for us to just sit by and do nothing.  And if you’re a progressive who cares about the integrity of Social Security and Medicare and Medicaid, and believes that it is part of what makes our country great that we look after our seniors and we look after the most vulnerable, then we have an obligation to make sure that we make those changes that are required to make it sustainable over the long term.

And if you’re a progressive that cares about investments in Head Start and student loan programs and medical research and infrastructure, we’re not going to be able to make progress on those areas if we haven’t gotten our fiscal house in order.

So the argument I’m making to my party is, the values we care about – making sure that everybody in this country has a shot at the American Dream and everybody is out there with the opportunity to succeed if they work hard and live a responsible life, and that government has a role to play in providing some of that opportunity through things like student loans and making sure that our roads and highways and airports are functioning, and making sure that we’re investing in research and development for the high-tech jobs of the future – if you care about those things, then you’ve got to be interested in figuring out how do we pay for that in a responsible way… But the reason we’ve got a problem right now is people keep on avoiding hard things, and I think now is the time for us to go ahead and take it on.

Shared Sacrifice

Now, what I will say is, is that the revenue components that we’ve discussed would be significant and would target folks who can most afford it.  And if we don't do any revenue – because you may hear the argument that why not just go ahead and do all the cuts and we can debate the revenue issues in the election – right?  You’ll hear that from some Republicans.  The problem is, is that if you don't do the revenues, then to get the same amount of savings you’ve got to have more cuts, which means that it’s seniors, or it’s poor kids, or it’s medical researchers, or it’s our infrastructure that suffers. 

And I do not want, and I will not accept, a deal in which I am asked to do nothing, in fact, I’m able to keep hundreds of thousands of dollars in additional income that I don’t need, while a parent out there who is struggling to figure out how to send their kid to college suddenly finds that they’ve got a couple thousand dollars less in grants or student loans. 

That’s what the revenue debate is about.  It’s not because I want to raise revenues for the sake of raising revenues, or I’ve got some grand ambition to create a bigger government.  It’s because if we’re going to actually solve the problem, there are a finite number of ways to do it.  And if you don’t have revenues, it means you are putting more of a burden on the people who can least afford it.  And that’s not fair.  And I think the American people agree with me on that.

Building Confidence to Grow the Economy

So as part of a component of a deal, I think it’s very important for us to look at what are the steps we can take short term in order to put folks back to work.  I am not somebody who believes that just because we solve the deficit and debt problems short term, medium term, or long term, that that automatically solves the unemployment problem.  I think we’re still going to have to do a bunch of stuff -- including, for example, trade deals that are before Congress right now that could add tens of thousands of jobs. 

Republicans gave me this list the beginning of this year as a priority, something that they thought they could do.  Now I’m ready to do it, and so far we haven’t gotten the kind of movement that I would have expected.

We’ve got the potential to create an infrastructure bank that could put construction workers to work right now, rebuilding our roads and our bridges and our vital infrastructure all across the country.  So those are still areas where I think we can make enormous progress. 

I do think that if the country as a whole sees Washington act responsibly, compromises being made, the deficit and debt being dealt with for 10, 15, 20 years, that that will help with businesses feeling more confident about aggressively investing in this country, foreign investors saying America has got its act together and are willing to invest.  And so it can have a positive impact in overall growth and employment.

Now Is the Time

And when you ask them, well, what would you do?  “We’ve got to get government spending under control and we’ve got to get our deficits under control.”  So I say, okay, let’s go.  Where are they?  I mean, this is what they claim would be the single biggest boost to business certainty and confidence.  So what's the holdup?