On Wednesday, Obama warned Republicans not to pursue a course that would set up a fresh battle over the debt limit. Addressing business leaders, he recalled “the catastrophe that happened in August of 2011,” when Republicans last used the debt limit as a point of leverage. The nation came within days of default and consumer confidence plummeted.
“That is a bad strategy for America, it’s a bad strategy for your businesses, and it is not a game that I will play,” Obama said in an address to the Business Roundtable.
He argued that “we can probably solve this in about a week” if Republicans give ground on tax rates. For the second day in a row, he raised the prospect of a compromise that sets the top rate lower than 39.6 percent.
“We’ve seen some movement over the last several days among some Republicans,” Obama said. “I think there’s a recognition that maybe they can accept some rate increases as long as it’s combined with serious entitlement reform and additional spending cuts.”
In recent weeks, influential conservative pundits have begun making similar arguments. The Wall Street Journal stated in an editorial last month that Republicans could score political points by keeping the top rate below 39.6 percent.
Such views are reverberating on Capitol Hill, where Sen. Tom Coburn (R-Okla.), a champion of smaller government, on Wednesday became the latest voice to join the chorus.
“Personally, I know we have to raise revenue. I don’t really care which way we do it. Actually, I would rather see the rates go up than do it the other way, because it gives us a greater chance to reform the tax code and broaden the base in the future,” Coburn said on MSNBC.
Rep. Jeb Hensarling (R-Tex.), a conservative veteran of recent budget wars, also acknowledged that tax increases are coming.
“The president is going to get some form or fashion of revenue. That’s baked into current law,” he said. “I didn’t vote for it. I don’t want it. But I recognize it, and House Republicans will work to minimize the damage to the economy.”