During a rare press conference on Wednesday, June 29, President Barack Obama outlined his negotiating position in deficit reduction talks, which revolved around the need to increase revenue by increasing taxes on wealthy Americans and corporations.
“I don’t think that is real radical. I think the majority of Americans agree with that,” Obama said.
The president became involved in negotiations over the budget last weekend when talks led by Vice President Joe Biden with congressional representatives broke down after a walkout by Republican negotiators last week.
Eric Cantor led that exodus, saying the negotiations had reached an impasse over taxes that could only be solved by the president and top party leaders.
Three days into the new negotiations, the debate over taxes is still highly polarized.
Republicans continue to hold to their position that taxes must not be raised, and Democrats remain committed to raising revenue, partly through the elimination of tax exemptions for the wealthiest Americans.
“The tax cuts I am proposing we get rid of, are tax cuts for millionaires and billionaires. Tax breaks for oil companies, and hedge fund managers, and corporate jet owners,” Obama said.
Obama asked Americans to consider the alternatives, if deficit reduction were to come only from spending cuts, as Republicans want.
It would mean less food safety inspectors, reduced scholarships for young people, a reduced National Weather Service, less money for medical research, and higher costs for seniors and the disabled for Medicare, Obama said.
“Any agreement to balance our deficit is going to require tough decisions and balanced solutions,” he added.
Republican Leader Mitch McConnell said prior to a meeting with the president on Monday, the debate is not about rich or poor, but “about whether Washington will ever be held accountable for its mistakes.”
McConnell told his colleagues on the Senate floor that the “debt has skyrocketed. ... Washington spends too much,” and the economic stimulus passed during the height of the financial meltdown, has been a failure.
House Speaker John Boehner said in a statement that the House majority absolutely would not support an agreement that includes tax increases.
The GOP’s position is that a vitally important vote to increase the nation’s debt limit must include spending cuts, which are greater or equal to the amount of the limit increase.
The number in play right now exceeds $2 trillion in savings, an amount, which would enable the government to survive beyond the next election before dealing with the issue again.
To avoid a default, a vote must take place before Aug. 2, a date set by Treasury Secretary Timothy Geithner.
Congress has been negotiating for months based on a bipartisan understanding that an agreement on deficit reduction must be reached.
A large majority of observers, and experts, agree that a mix of spending cuts and revenue increases will be necessary to get at a deficit reduction agreement that markets will consider credible. A downgrade on the Treasury bond rating would result in higher interest rates, and more debt.
Tinkering with the tax code offers a wide range of possibilities for lawmakers to work with in looking for both cuts and new revenue. The code includes over $1 trillion in federal tax deductions and exemptions.
“The beauty of repealing some tax expenditures is that you can reasonably say that this action produces revenue that is very similar to spending cuts,” said Ron Haskin, a senior fellow with Brookings, in a Web chat with reporters.
Obama is still ignoring the reality that tax increases on the wealthy alone will be unable to make up the trillion dollar shortfall negotiators still have to deal with, Haskin said.
At the same time, Obama said he would like the payroll tax holiday, and tax cuts for the middle class, both part of a deal reached last December, to be extended for another year.
“One of the most important things for debt and deficit reduction is to grow the economy,” meaning that the two issues were interrelated.
The government has gotten a number of reminders in the last few weeks, including a downgrade in the U.S. economy’s long-term outlook by rating agency, Standard & Poor’s. The day of Obama’s news event, the IMF urged Congress to move “expeditiously,” to raise the debt ceiling, rather than waiting until the last minute to do something, lest interest rates spike, affecting the global economy.
After his meeting with reporters, Obama met with Senate Majority Leader Harry Reid (D-Nev.), Dick Durbin (D-Ill.), and Charles Schumer (D-N.Y.), as well as Secretary Geithner to get more input on a way forward.
“I don’t think that is real radical. I think the majority of Americans agree with that,” Obama said.
The president became involved in negotiations over the budget last weekend when talks led by Vice President Joe Biden with congressional representatives broke down after a walkout by Republican negotiators last week.
Eric Cantor led that exodus, saying the negotiations had reached an impasse over taxes that could only be solved by the president and top party leaders.
Three days into the new negotiations, the debate over taxes is still highly polarized.
Republicans continue to hold to their position that taxes must not be raised, and Democrats remain committed to raising revenue, partly through the elimination of tax exemptions for the wealthiest Americans.
“The tax cuts I am proposing we get rid of, are tax cuts for millionaires and billionaires. Tax breaks for oil companies, and hedge fund managers, and corporate jet owners,” Obama said.
Obama asked Americans to consider the alternatives, if deficit reduction were to come only from spending cuts, as Republicans want.
It would mean less food safety inspectors, reduced scholarships for young people, a reduced National Weather Service, less money for medical research, and higher costs for seniors and the disabled for Medicare, Obama said.
“Any agreement to balance our deficit is going to require tough decisions and balanced solutions,” he added.
No Way, No How
Republican Leader Mitch McConnell said prior to a meeting with the president on Monday, the debate is not about rich or poor, but “about whether Washington will ever be held accountable for its mistakes.”
McConnell told his colleagues on the Senate floor that the “debt has skyrocketed. ... Washington spends too much,” and the economic stimulus passed during the height of the financial meltdown, has been a failure.
House Speaker John Boehner said in a statement that the House majority absolutely would not support an agreement that includes tax increases.
The GOP’s position is that a vitally important vote to increase the nation’s debt limit must include spending cuts, which are greater or equal to the amount of the limit increase.
The number in play right now exceeds $2 trillion in savings, an amount, which would enable the government to survive beyond the next election before dealing with the issue again.
To avoid a default, a vote must take place before Aug. 2, a date set by Treasury Secretary Timothy Geithner.
Sustainability
Congress has been negotiating for months based on a bipartisan understanding that an agreement on deficit reduction must be reached.
A large majority of observers, and experts, agree that a mix of spending cuts and revenue increases will be necessary to get at a deficit reduction agreement that markets will consider credible. A downgrade on the Treasury bond rating would result in higher interest rates, and more debt.
Tinkering with the tax code offers a wide range of possibilities for lawmakers to work with in looking for both cuts and new revenue. The code includes over $1 trillion in federal tax deductions and exemptions.
“The beauty of repealing some tax expenditures is that you can reasonably say that this action produces revenue that is very similar to spending cuts,” said Ron Haskin, a senior fellow with Brookings, in a Web chat with reporters.
Obama is still ignoring the reality that tax increases on the wealthy alone will be unable to make up the trillion dollar shortfall negotiators still have to deal with, Haskin said.
At the same time, Obama said he would like the payroll tax holiday, and tax cuts for the middle class, both part of a deal reached last December, to be extended for another year.
“One of the most important things for debt and deficit reduction is to grow the economy,” meaning that the two issues were interrelated.
The government has gotten a number of reminders in the last few weeks, including a downgrade in the U.S. economy’s long-term outlook by rating agency, Standard & Poor’s. The day of Obama’s news event, the IMF urged Congress to move “expeditiously,” to raise the debt ceiling, rather than waiting until the last minute to do something, lest interest rates spike, affecting the global economy.
After his meeting with reporters, Obama met with Senate Majority Leader Harry Reid (D-Nev.), Dick Durbin (D-Ill.), and Charles Schumer (D-N.Y.), as well as Secretary Geithner to get more input on a way forward.
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