Obama Continues Push for ‘Big Deal’ to Reduce Deficit

Jul 15, 2011 1:48pm

ABC News’ Mary Bruce (@marykbruce) reports:

Following five days of tense debt negotiations with congressional leaders, President Obama said today that there is still time to agree on a $4 trillion “big deal” to reduce the deficit and avoid default before the August 2 deadline to raise the nation’s $14.3 debt ceiling.

“We have a unique opportunity to do something big,” Obama said at a White House press conference today, noting “we are obviously running out of time.”

As ABC News’ Jake Tapper reported, for the first time, Obama publicly acknowledged that he would support means-testing Medicare as a part of an agreement to raise the debt ceiling, a change which would require wealthier seniors to pay more.

“I've said that means-testing on Medicare, meaning people like myself… you can envision a situation where, for somebody in my position, me having to pay a little bit more on premiums or co-pays or things like that would be appropriate,” the president said in response to a question from ABC. “That could make a difference.”

After roughly eight hours of negotiations this week failed to produce a deal, the president has given congressional leaders till Saturday morning to decide if they can compromise on a package to reduce the deficit or opt to simply raise the debt ceiling and avoid default.

“I'm hopeful that over the next couple of days, we'll see… this logjam broken, because the American people, I think understandably, want to see Washington do its job,” Obama said at his second White House press conference of the week.

The president warned of the dire, “Armageddon” consequences that would occur if the U.S. defaults on its debt for the first time in the nation’s history.       

“We could end up with a situation, for example, where interest rates rise for everybody all throughout the country — effectively, a tax increase on everybody — because suddenly, whether you're using your credit card, you're trying to get a loan for a car or a student loan, businesses that are trying to make payroll — all of them could end up being impacted as a consequence of a default,” he said.

The president continues to push for a $4 trillion deal to reduce the deficit over 10 years that would cut entitlement programs and increase taxes on the wealthiest Americans, but he recognizes “it is hard to do a big package.”

“My Republican friends have said that they're not willing to do revenues, and they have repeated that on several occasions. My hope, though, is that they're listening not just to lobbyists or special interests here in Washington but they're also listening to the American people, because it turns out, poll after poll, many done by your organizations, show that it's not just Democrats who think we need to take a balanced approach; it's Republicans as well,” he said.

If a big deal is not possible “then let's still be ambitious,” the president said, urging negotiators to at least agree to a “down payment on deficit reduction.” The middle-of-the-road option would cut government spending, likely between $1.5 and $1.7 trillion, but would not cut entitlements or increase taxes.

As for Senator McConnell’s “last choice option,” which would raise the debt ceiling but fail to make progress on the deficit and debt, the president called it the “least attractive option.”

“If we take that approach, this issue is going to continue to plague us for months and years to come,” Obama said. 

The president also rejected reports of mounting tension at this week’s White House meetings. “I think this notion that things got ugly is just not true.  We've been meeting every single day, and we have had very constructive conversations.  You know, the American people are not interested in the reality TV aspects of who said what, and did somebody's feelings get hurt.  They're interested in solving the budget problem and the deficit and the debt. And so that may be good for chatter in this town.  It's not something that folks out in the country are obsessing about,” he said.

You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus