Obama faces a political necessity — claiming the debt issue as his own — and a political opportunity. Recent polls show that Americans disapprove of his record on the deficit. But sizable majorities agree that a combination of spending cuts and tax hikes on the wealthy — Obama’s vision — is the best prescription for the nation’s fiscal malady.
Still, some analysts say, the challenge for Obama will be to link his position on reining in the debt to efforts that would boost the economy. The high joblessness rate, stagnant wages and soaring gas prices represent a triple threat to Obama’s reelection, but the president has virtually no options left to spur job growth before 2012.
The first battleground for this debate will be the imminent clash on Capitol Hill over raising the limit on how much the federal government can borrow. The Treasury Department has concluded that the $14.3 trillion debt ceiling will be breached next month and will have to be raised by early July.
Republicans want legislation to reduce government spending to be part of the vote to raise the debt limit; the Obama administration has said that further deficit reduction is needed but that the issues should not be joined.
On Sunday, Treasury Secretary Timothy F. Geithner said that “if by the time we need to raise the debt limit we haven’t worked all that out, Congress still has to raise the debt limit.” He warned on NBC’s “Meet the Press” that a failure to raise the debt limit would be “catastrophic,” pushing the country back into a severe recession.
Meanwhile, House Budget Committee
Chairman Paul Ryan (R-Wis.) said Republicans would not simply “rubber-stamp a debt increase.” On CBS’s “Face the Nation,” he did not outline the GOP’s terms for voting for a debt increase but repeated that the party was looking for spending cuts “in conjunction with raising the debt limit.”
Obama’s upcoming trips, which also include a visit to Reno, Nev., come after the unveiling last week of his plan to reduce the federal deficit by $4 trillion over 12 years through a combination of spending cuts and tax hikes. By reducing the annual budget, the government would slow the growth of the nation’s debt over time.
House Republicans passed a budget Friday that would reduce the federal deficit by $4.4 trillion in 10 years with program cuts alone. No Democrats voted for the plan.
With his deficit speech Wednesday, some analysts say the president has provided himself political cover as Congress debates the debt limit and later the 2012 budget. But some also see Obama as being forced to discuss deficit reduction when the priority for his administration should be job creation.