Wednesday, June 29, 2011

Obama Works Court of Public Opinion On Debt Fight

Updated 2:45 p.m. edt

It appears the White House heard Sen. Bernie Sanders' plea for applying some shared sacrifice in the contentious debate over deficit reduction.

President Obama is urging Congress to take a balanced approach in trying to reduce the national debt, saying cuts in spending need to be offset by revenue created by eliminating tax loopholes for profitable corporations.

"I don't think that's real radical," Obama said at a White House news conference today. "I think the majority of Americans agree with that."

Unrelenting Republicans have said they refuse to give an inch on the tax breaks for big business, instead demanding that programs -- many of which benefit middle class Americans -- should be cut to reduce the $14.3 trillion national debt.

But laying down his marker in the showdown with the GOP, Obama argued that without removing tax breaks for hedge fund owners, oil and gas companies or corporate jets it may mean taking scholarships away from college students, cutting back on medical research and curtailing health care for the elderly.

"If everybody else is willing to take on their sacred cows and do tough things in order to achieve the goal of real deficit reduction, then I think it would be hard for the Republicans to stand there and say that, 'The tax break for corporate jets is sufficiently important that we're not willing to come to the table and get a deal done,' or, 'We're so concerned about protecting oil and gas subsidies for oil companies that are making money hand over fist, that's the reason we're not going to come to a deal,'" Obama said.

"I don't think that's a sustainable position," he added.

Obama went so far as to suggest that if lawmakers cannot reach a deal on the debt limit then they should cancel their vacation and finish the job. The hard deadline for raising the ceiling on the federal debt is Aug. 2, otherwise the government will begin to default on some of its loans, likely causing chaos in the financial markets.

"They're in one week. They're out one week. And then they're saying, 'Obama's got to step in,'" Obama said. "You need to be here. I've been here. I've been doing Afghanistan and bin Laden and the Greek crisis and -- you stay here. Let's get it done."

Asked about closing the tax loopholes for corporate America as part of a deficit reduction package, Sen. Orrin Hatch (R-Utah) responded that the federal tax code should be changed.

"And by the way, tax expenditures are not loopholes. They've been put in there, in many respects, you know, for very good reasons, and we've got to be very, very careful in what we do there," Hatch said.

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It is back to the bully pulpit today for President Obama, who will try to one-up Republicans in their face-off over lifting the federal debt limit before an early August deadline.

Obama and the Democrats are insisting that slashing the federal budget to the tune of at least $1 trillion is not enough to begin to corral the more than $14.3 trillion debt.

Obama wants to open a revenue stream, preferably by closing tax loopholes for hugely profitable corporations like the oil and gas industries that are banking billions in profits while Americans get squeezed at the gas pump.

Another cost-cutting idea being floated is raising the age for Medicare eligibility from 65 to 67. There also has been discussion of making the super-rich pay for their own health care costs.

Stubborn GOP lawmakers say tax increases of any kind are a non-starter, but Obama will try to make his case  at a White House news conference later this morning.

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