Obama on big debt deal: 'If not now, when?'

McClatchy NewspapersJuly 11, 2011 

WASHINGTON — President Barack Obama will meet Tuesday with congressional leaders at the White House for the third straight day to try to break a partisan deadlock over efforts to raise the U.S. debt ceiling.

Working against an Aug. 2 deadline, Obama challenged Republicans on Monday to embrace a sweeping deficit-reduction plan aimed at cutting federal budget deficits by $4 trillion over 10 years. But Republican leaders of the House of Representatives remained insistent that they won’t raise taxes.

The president appealed to a national audience in a televised news conference before the group arrived at the White House, saying he’d continue to push for “the largest possible deal” to put the country on firmer financial footing.

“Now is the time to deal with these issues,” Obama said. “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. …And so what I’ve said to them is, ‘Let’s go.' ”

But just an hour later, House Speaker John Boehner, R-Ohio, said the two sides remained at odds over taxes and spending on entitlements such as Medicare and Social Security.

“The president and I agree that the current levels of spending, including entitlement spending, are unsustainable,” Boehner said. “The president and I do not agree on his view that government needs more revenues through higher taxes on job creators.”

The group met for nearly 90 minutes, but reached no resolution. Democrats who were familiar with the discussions said the leaders used as a blueprint more than $1.5 trillion in savings identified by a group of lawmakers who'd been meeting last month with Vice President Joe Biden.

The officials said Obama pressed his case that the Biden package wasn't large enough and that GOP calls for cuts to programs such as Medicare and Medicaid without any tax increases on the rich would be impossible for “even a single Democrat” to support.

“If you don’t have revenues, it means you are putting more of a burden on the people who can least afford it,” the president said at his news conference. “And that’s not fair.”

Some House Republicans have said they’ll refuse to vote to lift the debt ceiling under any condition, meaning that Boehner may need House Democrats to get anything passed, including debt reduction.

Obama promised to meet with congressional leaders daily until a deal is reached. He sidestepped a question about whether the administration is developing contingency plans in the event a deal isn’t reached by Aug. 2, the date the administration has said is a deadline for avoiding default on federal debt. A default could stir chaos in financial markets and kick the U.S. economy back into recession.

“We are going to get this done by August 2," the president said.

Obama said he wouldn’t agree to a temporary deal as some lawmakers have suggested, even one as long as 180 days.

“If it’s hard now, imagine six months from now in the middle of election season,” he said. “It’s not going to get easier, it’s going to get harder. Pull off the Band-Aid. Eat our peas. Now is the time to do it.”

Both sides remain at loggerheads: Democrats want a mix of spending cuts that don't include Social Security and go lightly on Medicare and Medicaid, as well as tax increases; Republicans insist that tax increases are off the table.

At his news conference, Obama pressed for mutual sacrifice, saying he was willing to take “significant heat” from his own party to compromise on a deal.

“There is, frankly, resistance on my side to do anything on entitlements,” he said. “There is strong resistance on the Republican side to do anything on revenues. But if each side wants 100 percent of what its ideological predispositions are, then we can’t get anything done.”

Democratic officials familiar with the talks said the president had said he’d be willing to look at issues such as raising the Medicare age-eligibility rate by 2036.

Obama took pains to call Boehner a “good man who wants to do right by the country,” but the Ohio Republican suggested that the president was governing in “re-election mode."

"That’s where a lot of this rhetoric comes from,” Boehner told the "Laura Ingraham Show" on Monday before Obama spoke. “I’ve told the president, and I’ve asked him, I said, ‘Mr. President, let’s forget about the next election. You forget about yours and I’ll forget about mine.' ”

House Majority Leader Eric Cantor, R-Va., who led Republicans in the meeting, echoed Boehner, insisting that Republicans won't accept higher taxes unless they’re offset by tax cuts.

“We’re not asking the president to violate his promises to the people of this country,” Cantor told a news conference, “and we wish he wouldn’t ask us to do the same.”

Cantor distributed to reporters copies of last year’s House Republicans’ election manifesto, which rules out “raising taxes on anyone in a struggling economy.” The pledge helped elect 87 House GOP freshmen and give Republicans control of the House.

Democrats portray Republicans as catering to special interests by refusing to consider raising taxes. Obama said his proposal to raise revenues — which wouldn’t take effect until 2013 — would target what he called “egregious loopholes” that benefited corporate jet owners and oil companies “at a time where they're making billions of dollars of profits.

Cantor said the Biden group identified about $2 trillion in savings, including $1.1 trillion in discretionary spending such as education, transportation and law enforcement programs. Another $350 billion could come from health care, and $300 billion from other mandatory spending, presumably programs such as farm aid and federal retirement. Another $330 billion to $350 billion could come from savings on interest.

But spending cuts without raising revenue was a non-starter for Democrats.

“Democrats remain committed to a balanced and bipartisan agreement which is fair to the middle class, honors our seniors, creates jobs and educates our children as we reduce the deficit,” House Democratic leader Nancy Pelosi of California said after the talks. “We continue to oppose benefit cuts in Social Security and Medicare. These pillars of economic and health security should not be used as a piggybank to subsidize tax cuts for the wealthy.”

Cantor suggested that Republicans' “shared sacrifice” would be voting to increase the debt limit.

“A vote to increase the debt limit is an existential question for fiscal conservatives,” he said. “These votes aren’t easy.”

Outside players also stepped up their efforts, reflecting the divide among lawmakers and the pressures on them from all sides.

For example, the anti-tax Club for Growth unveiled TV ads warning Republicans not to “cave in” to Obama, with ads in Indiana and Utah that target two Republicans who face primary challenges: Sens. Richard Lugar and Orrin Hatch.

The AARP, which said it would oppose any cuts to Social Security and Medicare benefits, warned that later this week “representatives from across the country” would lobby Congress “to deliver a strong message that Social Security and Medicare should not be cut for deficit and debt reduction.”

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