“We don’t have to choose between a future of spiraling debt and one where we forfeit investments in our people and our country,” he said. “To meet our fiscal challenge, we will need to make reforms. We will all need to make sacrifices. But we do not have to sacrifice the America we believe in. And as long as I’m president, we won’t.”
Obama announced his framework for deficit reduction in a speech that at times employed the highly partisan words he used on the campaign trail. But it included only a few notable, and largely incremental, policy proposals.
And even as he joined the battle, Obama immediately volleyed the substantive work of debt reduction back to Capitol Hill, calling on lawmakers to reach “a final agreement on a plan to reduce the deficit” before the Treasury breaches the $14.3 trillion legal limit on borrowing in early July. The country could face devastating economic consequences if it were to stop borrowing and default on its obligations.
Obama said the talks, to be led by Vice President Biden, would begin in early May, after lawmakers return from a two-week Easter break. With polls showing rising public anxiety about the tide of red ink, many lawmakers say they cannot vote to raise the debt limit without some new mechanism to control spending.
Obama never mentioned the highly technical issue of the debt limit, casting the congressional discussions as an effort to “find common ground” in “this larger debate we’re having about the size and role of government.” But lawmakers and other observers said they had little doubt about the true aim of the talks, which the president said should include 16 lawmakers — four from each party in each chamber.
“This is the ‘debt crisis avoidance committee,’ ” said Robert L. Bixby, executive director of the nonprofit Concord Coalition, which advocates for balanced budgets. “Since there’s not a whole lot of time to actually fix Medicare and Social Security and rewrite the tax code, they are probably going to resort to some sort of procedural device,” he said.
The White House has urged Congress to approve an increase in the debt limit without attaching other provisions, an idea lawmakers in both parties call unrealistic. But after meeting with the president early Wednesday, House Speaker John A. Boehner (R-Ohio) said Obama signaled that he might be willing to consider a bill that includes spending limits.
In fact, the president offered his own alternative Wednesday: a “debt fail-safe trigger” that would cut spending across the board if lawmakers did not approve policies that would set the debt on a downward path by 2014. The trigger should spare Social Security, Medicare and programs for the poor, Obama said, and should raise taxes by cutting dozens of tax breaks that benefit people and corporations.