Bill Daley: President Obama Still Wants a 'Big Deal' on Deficit Reduction

WASHINGTON, July 10, 2011— -- White House chief of staff Bill Daley maintains that President Obama will attempt to reach a "big deal" with Republicans in budget negotiations continuing at the White House today, despite House Speaker John Boehner's statement that a smaller agreement is the best course.

"It's rather unfortunate that the speaker has made the comments he has," Daley told "This Week" anchor Chistiane Amanpour in an exclusive interview. "The president is still very committed to solving this deficit problem for the future of America. He's looking forward to the meeting today to lay out once again his case.

"This president is committed to bringing economic soundness to this country, and that takes a big deal," Daley added.

Boehner said in a statement released Saturday night that a larger agreement could not be reached because of differences over tax revenues, and that he would seek a smaller deal on deficit reduction as part of bipartisan negotiations on raising the debt limit.

"I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the [Vice President Joe] Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase," the Ohio Republican said.

But Daley maintains that Obama is still committed to a larger agreement, closer to $4 trillion in budget reductions, and that "this is the time to do it."

"Everyone agrees that a number around $4 trillion is the number that will make a serious dent on our deficit," Daley said. "It will send a statement to the world that the U.S. has gotten hold of their problems, fiscal problems, and they're moving forward. And it'll give confidence to the American people, give confidence that we can then move forward over the next number of years to bring economic soundness."

Daley does believe that an agreement will be reached before an early August deadline when the United States would begin defaulting on its debt obligations.

"By the 2nd of August there is no question in my mind that the leaders of America will not allow the first default in the history of the country to occur," Daley said. "I'm confident of that.

"The president believes it is time to solve this problem, it is time to give confidence to the American people, give confidence to the markets of the world," Daley added. "Obviously no one wants a default. We shouldn't even be close to this situation."

Daley said that while a larger deal will involve "a lot of pain politically" on both sides, including changes to Medicare that many House Democrats oppose, Obama will still push for a larger package that will require "shared pain and shared responsibility."

"Medicare has got to be strengthened. It'll run out of money in five years if we don't do something," Daley said. "Obviously there has to be improvements to it. There has to be at the same time a balanced package.

"In this town, generally they kick the can. Nobody wants to do the tough things," the White House spokesman said. "[Obama] is not someone to walk away from a tough fight."

Daley said he believes uncertainty about political progress has contributed to the stalling economic recovery, as Friday's jobs report showed virtually no employment growth for the second month in a row.

"I do firmly believe that one of the wet blankets on this economy and on companies, on the system right now is a question as to whether or not our political system, whether the leaders can get together, whether they can solve big problems," Daley said.

"If I was a business owner trying to make a decision on an investment, I'd have a little concern right now," Daley added. "They're looking to see signs of confidence for them to invest. ... They want to see leadership."