Fighting back against Republican calls for greater spending cuts, President Obama said Friday that the government doesn't need to make major changes to get its budget back on track and called for that solution to include some trims coupled with tax increases.
"Here's the good news: that it turns out we don't have to do anything radical to solve this problem. Contrary to what some folks say that — we're not Greece. You know, we're not Portugal," Mr. Obama said at his third press conference in three weeks, using his most powerful public relations tool to take his arguments directly to voters.
Mr. Obama and congressional leaders are negotiating over whether and how to raise the federal government's borrowing limit, which early next month will bump up against the $14.29 trillion limit set in law. The administration, Fed Chairman Ben S. Bernanke and leading business groups have all warned of major damage to the U.S. economy if the federal government cannot pay its bills.
The GOP wants to couple any debt increase to spending cuts in both discretionary and entitlement programs such as Medicare, while Mr. Obama wants tax increases to be part of the mix. That stance is actually an about-face from earlier this year, though, when Mr. Obama had called for the debt limit to be raised without any conditions at all.
The president said there are three options on the table: a big deal that total $4 billion in tax increases and potential spending cuts; a plan about half that size; and a "fallback position" that would increase the debt limit but push off action on the deficit.
House Republicans have said they'll put together a bill with spending cuts, and hold a vote on it next week, essentially putting down a very public marker for where they stand.
“We want to be able to go home to the people that elected us and show them that we’re not going to allow this kind of spending to continue. We don't have the money, they don't have the money," said House Majority Leader Eric Cantor, Virginia Republican.
But Mr. Obama rejected the outlines of House Republicans' spending-cuts plan as an effort "just to make political statements," and said it would require slashing too deeply from domestic spending.
Still, the president insisted he's open to a deal — "If they show me a serious plan, I'm ready to move," he said — and added he wants to hear from congressional leaders by the middle of the weekend on whether they are willing to compromise.
Even as Mr. Obama tried to strike an optimistic tone, he said the consequences of not raising the debt limit would be "Armageddon."
Friday marks the first day this week that that White House and Hill negotiators have not met.
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