President Barack Obama plans to meet with congressional leaders on Thursday to try to strike an agreement on raising the debt ceiling through a combination of spending cuts and revenue increases.
During a speech Tuesday, Obama acknowledged that some progress had been made in terms of agreements on spending cuts, but insisted that Republicans should agree to some tax changes as well.
“I believe we need a balanced approach,” he said Tuesday. “We need to take on spending in domestic programs, in defense programs, in entitlement programs, and we need to take on spending in the tax code—spending on certain tax breaks and deductions for the wealthiest of Americans. This will require both parties to get out of our comfort zones, and both parties to agree on real compromise.”
Obama rejected the idea that has been floated lately that he should settle for another short-term debt limit fix while negotiations continue over larger spending cuts. The Treasury Department has said the debt ceiling needs to be raised about $2.4 trillion above its current $14.3 trillion level to $16.7 trillion by August 2, or the federal government risks defaulting on some of its obligations.
“Now, I’ve heard reports that there may be some in Congress who want to do just enough to make sure that America avoids defaulting on our debt in the short term, but then wants to kick the can down the road when it comes to solving the larger problem of our deficit,” said Obama. “I don’t share that view. I don’t think the American people sent us here to avoid tough problems. That’s, in fact, what drives them nuts about Washington, when both parties simply take the path of least resistance. And I don’t want to do that here. I believe that right now we’ve got a unique opportunity to do something big—to tackle our deficit in a way that forces our government to live within its means, that puts our economy on a stronger footing for the future, and still allows us to invest in that future.”
Vice President Joe Biden had been leading the budget negotiations until House Majority Leader Eric Cantor, R-Va., and Sen. Jon Kyl, R-Ariz., broke off talks last month, citing an impasse over tax increases (see Cantor Backs out of White House Budget Talks, Citing Tax Impasse). The bipartisan negotiations reportedly led to agreements to $1.2 trillion in spending cuts, but Republicans have so far refused to go along with tax increases. Obama tried to pressure them last week in a contentious news conference in which he blamed Republican lawmakers for refusing to concede on giving up tax breaks for corporate jet owners, hedge fund managers, big oil companies, millionaires and billionaires (see Obama Prods Republicans on Tax Hikes).
He rejected invitations from Senate Minority Leader Mitch McConnell, R-Ken., to meet with Republicans at the Capitol last week, but he took a more conciliatory tone in announcing the meeting scheduled for Thursday at the White House with congressional leaders. But Republicans have indicated that they still are not inclined to accept any tax increases, which reportedly include limitations on tax deductions by the wealthy.
“The legislation the President has asked for—which would increase taxes on small businesses and destroy more American jobs—cannot pass the House, as I have stated repeatedly,” said Speaker of the House John Boehner, R-Ohio. “The American people simply won’t stand for it. And their elected representatives in Congress won’t vote for it. I’m happy to discuss these issues at the White House, but such discussions will be fruitless until the President recognizes economic and legislative reality. Our focus should be on getting our economy back on track by making the spending reductions and structural reforms necessary to address our nation’s out-of-control debt. We can do so without raising taxes on America’s small business job-creators.”
McConnell said he would accept Obama’s invitation to meet at the White House, but would resist tax increases.
“I view Thursday’s meeting as an opportunity for the congressional leadership and the President to talk about what’s actually possible,” he said in a statement. “I view it as an opportunity to know whether or not the President will finally agree to a serious plan to reduce the deficit. Or if in the middle of a debt crisis, he’ll insist on more stimulus spending; whether in the middle of a jobs crisis, he’ll continue to insist on hundreds of billions in tax hikes that we know—and he has acknowledged—will kill jobs. Republicans in Congress believe that finding a way to reduce the deficit and prevent Medicare’s bankruptcy should be the goal. These discussions are not about rich and poor or an election, but they’re about making Washington take the hit and make some tough choices for a change—not the taxpayers and job creators.”
Meanwhile, Senate Majority Leader Harry Reid, D-Nev., has introduced legislation to increase taxes on the wealthy. “The rich are getting richer and the poor are getting poorer,” he said Tuesday. “And the middle class Democrats have worked to make stronger is disappearing. Middle-class families are struggling to make ends meet.
That is why I have brought to the floor legislation demanding millionaires and billionaires contribute their fair share to this crucial deficit reduction struggle. When Republicans talk about shared sacrifice, they mean the sacrifice should be shared by those who can least afford it. Democrats believe the sacrifice should be shared by the richest 1 percent as well. The others have all sacrificed too much already.”