While avoiding specifics, President Obama on Thursday warned there were tough decisions ahead on debt and deficits and said that any action would require a bipartisan approach.
Speaking at a news conference in Korea before a meeting of G-20 economic nations, Obama discussed international trade and economic stimulus issues and commented on his debt-reduction commission’s draft proposals released Wednesday. The plan, which has been attacked by liberals and conservatives, calls for cuts in Medicare and defense spending, an extension of the Social Security retirement age and some revenue increases along with tax reform.
The proposals are just the opening volley in the debate over how to reduce deficits and the debt, key issues that fueled the “tea party” movement’s successes and the GOP’s winning congressional campaigns. The issues, and the recommendations, are not new, but have taken on a renewed urgency in the wake of the midterm elections that gave Republicans control of the House of Representatives and more influence in the Senate.
“I have not seen the final report from the deficit commission,” said Obama during the news conference with Korean President Lee Myung-Bak. “ I have said very clearly that until I see the final report I’m not going to comment on it because I want them to have the space to do their work.”
But Obama said he created the commission because of the tough decisions ahead on what to cut and the expected political fallout.
“I’m going to need Congress to work with me,” said the president.”There was a lot of talk during the course of this campaign season about debt and deficits. And unfortunately, a lot of the talk didn’t match up with reality. If we are concerned about debt and deficits, then we’re going to have to take actions that are difficult and we’re going to have to tell the truth to the American people.”
Obama also noted the debate over earmarks, requests from lawmakers for federal funds for favored projects. The commission’s leaders called for eliminating earmarks. Conservative Republicans, led by Sen. Jim DeMint (R-S.C.), have been waging a battle against earmarks, though other GOP leaders question the move.
“I’m somebody who’s big on eliminating earmarks in Congress, but earmarks alone won’t balance a budget,” Obama said. “I think that we can root out more waste and abuse in federal spending, but even the most optimistic estimates about the amount of waste and abuse that can be eliminated still leaves a huge deficit and a substantial debt.
“We’re going to have to make some tough choices. The only way to make those tough choices historically has been if both parties are willing to move forward together,” Obama said, urging political restraint.
“So before anybody starts shooting down proposals, I think we need to listen, we need to gather up all the facts. I think we have to be straight with the American people. If people are, in fact, concerned about spending, debt, deficits and the future of our country, then they’re going to need to be armed with the information about the kinds of choices that are going to be involved, and we can’t just engage in political rhetoric,” he said.
The 18-member commission is required to issue its final report on Dec. 1, but the chairmen released its ideas Wednesday. The committee is chaired by Erskine Bowles, a Democrat who was White House chief of staff under President Clinton, and Alan Simpson, a former Republican senator from Wyoming.
The issues of debt have been tied to dealing with spending for entitlements such as Medicare and Social Security, since their funding is a key part of the problem. The solution will likely be a combination of cuts and tax increases, but the political rub lies in determining that mixture.
Speaking Thursday on ABC’s “Good Morning America,” Sen. Kent Conrad (D-N.D.), a member of the commission and head of the Senate Budget Committee, said the United States could become a second-class economic power if it fails to address the deficit problem. Changes in Medicare and Social Security were needed because the programs would become insolvent if nothing is done.
“People can say we want to keep what is,” he said, adding “what is, is not affordable.”
The current proposals would increase the retirement age for full Social Security benefits to 69 by 2075 and the annual benefit increases would be decreased.
Among the favored tax deductions that could be eliminated is the one giving a deduction for mortgage interest. A 15-cent-a-gallon gasoline tax increase would be added.
The plan would also freeze most federal pay and decrease the federal workforce by 10%. Earmarks would be eliminated.