President Barack Obama climbed into the bully pulpit yet again for a 9 p.m. address to the nation tonight, a speech that supported Democratic Senate Majority Leader Harry Reid’s debt ceiling plan and blamed House Republicans for a “stalemate.”
The White House endorsed Reid’s plan in a press release this afternoon. “Senator Reid has put forward a responsible compromise that cuts spending in a way that protects critical investments and does not harm the economic recovery,” the statement read.
But Reid’s plan is a defeat for Obama because it was developed outside the White House, it cuts spending, and it does not include any tax increases — even though Obama sought to win $1.2 trillion in new taxes over 10 years.
The plan “reduces the deficit more than enough to meet the contrived dollar-for-dollar criteria called for by House Republicans,” said the press release.
The White House statement also highlighted an increasingly prominent aspect of Reid’s plan — the fact that it would provide enough cash for the government to continue past the 2012 election, and into 2013, before the government again hits the debt ceiling.
“Most importantly, [Reid’s plan] removes the cloud of a possible default from our economy through 2012,” said the statement, echoing the White House’s wish to avoid a campaign-season repeat of the current debt ceiling drama. (Boehner reveals details of his debt limit proposal)
According to the White House, “all the cuts put forward in this [Reid] approach were previously agreed to by both parties through the process led by the Vice President.”
House Speaker John Boehner derided Reid’s plan, saying it is “full of gimmicks” that avoid real reform.
Reid’s plan assumes savings of roughly $1 trillion from previously announced plans to withdraw U.S. forces from largely peaceful Iraq, and to reduce combat operations in Afghanistan.
Another $1.2 trillion is to be saved from unspecified cuts to discretionary programs, such as the defense budget. Another $400 million will be saved, according to the Reid plan, because interest payments won’t come due for money the U.S. doesn’t borrow.
Boehner’s rival plan calls for a $1.2 trillion cut from discretionary spending over ten years, in exchange for a stopgap $1 trillion increase in the debt ceiling. It also requires Congress to vote by January on a constitutional amendment to balance the federal budget.
It is not clear if either the Reid plan or the Boehner plan has the support of a majority in the Senate or House. (Reid unveils rival debt limit plan)
Reid’s proposal is a “reasonable compromise,” added the White House statement, in comparison to the GOP’s preference that “the budget be balanced on the backs of seniors and the middle class.”
The White House also dismissed what it said was the GOP’s insistence on a “my way or the highway” approach: “We hope the House Republicans will agree to this plan so that America can avoid defaulting on our obligations for the first time in our history.”