President Barack Obama is urging a debt-ceiling deal with Hill Republicans. Despite the government’s $1.5 trillion current deficit, $14 trillion federal debt and $100 trillion promise of future spending for retirees, the president is pushing Congress to spend still more.
“Let’s get this [deficit and debt] problem off the table … [and] with a solid fiscal situation, we will then be in a position to make the kind of investments that I think are going to be necessary to win the future,” he told reporters gathered for a White House press conference Monday morning.
The big-spending jobs agenda, the president said, could cost additional trillions of dollars. “We’ve been looking at the whole menu of steps that can be taken … [but] taking an approach that costs trillions of dollars is not an option. We don’t have that kind of money right now.”
White House officials believe independents will respond positively to Obama’s adopted role as the convener of a grand economic bargain in Washington. These days, he has the support of only 32 percent of independents, according to a June Gallup poll, far less than the 52 percent he had in November 2008.
The compromise, Obama has repeatedly said, would include new taxes. “If you don’t do the revenues, then to get the same amount of savings you’ve got to have more cuts, which means that it’s seniors, or it’s poor kids, or it’s medical researchers, or it’s our infrastructure that suffers,” he said.
New taxes would avoid such unfair cuts, he said, adding that “I think the American people agree with me on that.” (Obama plays debt ceiling chicken)
Even as he uses the debt-ceiling dispute to woo independents, he is also promising a new era of big government spending to fund new jobs. “I do think that if the country as a whole sees Washington act responsibly, compromises being made, the deficit and debt being dealt with for 10, 15, 20 years … it can have a positive impact in overall growth and employment … [but] we’re still going to have to have a strong jobs agenda,” he said.
His list of jobs programs includes the creation of a government-backed bank to fund construction projects launched by state and local governments.
“We’ve got the potential to create an infrastructure bank that could put construction workers to work right now, rebuilding our roads and our bridges and our vital infrastructure all across the country,” he said.
The government-banked bank “is relatively small,” he said, but may provide a foundation for a much bigger program. “Could we imagine a project where we’re rebuilding roads and bridges and ports and schools and broadband lines and smart grids, and taking all those construction workers and putting them to work right now?”
“I can imagine a very aggressive program like that that I think the American people would rally around and would be good for the economy not just next year or the year after, but for the next 20 or 30 years,” he said.
Obama also suggested that he might want to continue some elements of the 2009 stimulus. The $787 billion law provided a flood of money to fund the employees of state and local governments. (Boehner: It takes two to tango)
But, he said, “as we’ve seen that federal support for states diminish, you’ve seen the biggest job losses in the public sector [such as] teachers, police officers, firefighters losing their jobs … [so] my strong preference would be for us to figure out ways that we can continue to provide help across the board.”
The president also sought to persuade liberals and progressives to support some form of debt ceiling deal by promising to prevent cuts to many existing big-government programs.
“If you’re a progressive who cares about the integrity of Social Security and Medicare and Medicaid … if you’re a progressive that cares about investments in Head Start and student loan programs and medical research and infrastructure, we’re not going to be able to make progress on those areas if we haven’t gotten our fiscal house in order,” he said.
The president’s description of federal job programs also commingled spending programs with regulations intended to shape the free market. “We’ve taken a number of steps to make sure that businesses are willing to invest, and that’s what the small business tax cuts and some of the tax breaks for companies that are willing to invest in plants and equipment — and zero capital gains for small businesses — that’s what that was all about, was giving businesses more incentive to invest,” he said.
Obama also urged continuation of the existing one-year payroll tax holiday. This is a temporary measure, unlike GOP-backed long-term tax cuts, and advocates say it stimulates spending and hiring. Free market conservatives say the temporary tax-holiday doesn’t spur long-term business investment, but does reduce accelerate the accounting-shortfall in the Social Security fund.
The current payroll-tax holiday ends in December. It lowers the Social Security payroll taxes paid by employees from 6.2 percent to 4.2 percent.
To get a deal that will fund more spending, Obama said Republicans, Democrats and business leaders must compromise. “These things are a tough process … and that is always the case when it comes to difficult but important tasks like this,” he said.
“I’d rather be talking about stuff that everybody welcomes, like new [government] programs,” he added. “Unfortunately, this is what’s on our plate. It’s before us right now. And we’ve got to deal with it.”