Obama to hit road to rally support for debt-reduction plan ahead of budget battles


President Obama is seen during his remarks at a Democratic Party fundraiser April 14 in Chicago. (JASON REED/REUTERS)
April 17, 2011

President Obama will hit the road this week and forcibly deliver his message that a combination of spending cuts and tax hikes on the rich is necessary to rein in the nation’s rocketing debt — a high-stakes effort to rally public support ahead of a series of contentious budget battles in Congress.

From Northern Virginia Community College in Annandale to Facebook’s headquarters in Silicon Valley, Obama will make a series of campaign-style stops in an effort to block a Republican plan that would reduce the deficit by dramatically changing Medicare and reducing spending on education and other social programs.

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.

Debt limit

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.

William Galston, a senior fellow at the Brookings Institution and a former Clinton administration adviser, said the Obama administration would probably prefer to increase government spending to quicken the pace of economic growth and reduce unemployment further.

“The president has no choice but to respond to a series of urgent fiscal issues,” Galston said. “If he had been free to define his own agenda, I think he would have defined it quite differently and . . . would have probably preferred another year or two of stimulative fiscal policy.”

Christina Romer, who served as head of the Council of Economic Advisers for the first 18 months of Obama’s tenure, has been urging the administration, Congress and the Federal Reserve to do more to reduce un­employment.

“We do possess many tools for curing cyclical unemployment, both monetary and fiscal, and I feel it is shameful we are not using them more aggressively,” Romer said in a recent speech at Washington University in St. Louis.

John Feehery, a Republican strategist, said there’s no use for Obama to talk about jobs.

“If jobs recover, it will save him,” Feehery said. “But talking about jobs won’t create any.”

Rather, he said, Obama is talking about the debt because that’s attractive to independent voters.

Polls show that Obama has work to do on the deficit but that many Americans agree with his broad approach. In a Washington Post-ABC News poll in mid-March, 55 percent of respondents disapproved of his handling on the issue, with 39 percent approving.

But, playing to Obama’s advantage, only about a third of Americans prefer a “cut only” approach to the deficit; nearly two in three say spending cuts and tax increases should be included.

Eyes on 2012

With the presidential campaign already begun, Republican candidates have focused on the high unemployment rate.

When he launched his exploratory committee last week, Mitt Romney, one of the GOP front-runners, hardly mentioned debt and deficits. Rather, he focused on Obama’s economic policies, saying millions of Americans can’t find a job.

“President Obama’s policies have failed,” Romney said.

Responding to Romney on Sunday, Geithner said: “That’s just about politics, and I understand that. People have to say those kind of things.” He acknowledged, however, that “it’s a very tough economy still.”

Some Democratic strategists say that while Obama has pushed legislation to help people through the hard times, he hasn’t done enough.

“The bottom line is we have heard nothing about jobs for the last several weeks,” said Doug Schoen, a Democratic pollster who advised President Bill Clinton.

Any proposal by the Obama administration to spur immediate job creation through some form of stimulus requiring new taxpayer funds would probably be dead on arrival because of opposition from Republicans in Congress.

In December, the administration and GOP lawmakers reached agreement on a bill that cut payroll taxes and extended benefits to jobless Americans, but positions have hardened since then.

“The fact that we’ve seen 1.8 million jobs created over the past 18 months, and the pace of growth accelerate, is a positive development,” Brian Deese, deputy director of the National Economic Council, said Friday. “We certainly have a long way to go.”

Polling director Jon Cohen and polling manager Peyton M. Craighill contributed to this report.

Zachary A. Goldfarb is a staff writer covering the White House, focusing on President Obama’s economic, financial and fiscal policy.
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