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"Our economy right now is headed in the right direction and it will stay that way as long as there aren't any more self-inflicted wounds coming out of Washington. So let's keep on chipping away at this problem together, as Democrats and Republicans, to give our workers and our businesses the support that they need to thrive in the weeks and months ahead," Obama told White House reporters yesterday.
During his address, Obama asked the Congress to approve legislation to replace at least some amount of the $85 billion in automatic spending cuts set to hit the government on March 1.
"For all the drama and disagreements that we've had over the past few years, Democrats and Republicans have still been able to come together and cut the deficit by more than $2.5 trillion through a mix of spending cuts and higher rates on taxes for the wealthy," he said.
"A balanced approach has achieved more than $2.5 trillion in deficit reduction. That's more than halfway towards the $4 trillion in deficit reduction that economists and elected officials from both parties believe is required to stabilise our debt. So we've made progress. And I still believe that we can finish the job with a balanced mix of spending cuts and more tax reform," he said.
The US President said in order to achieve the full $4 trillion in deficit reductions, which is the stated goal of economists and the elected leaders, the modest reforms in the social insurance programs have to go hand-in-hand with a process of tax reform, so that the wealthiest individuals and corporations can't take advantage of loopholes and deductions that aren't available to most Americans.
"Leaders in both parties have already identified the need to get rid of these loopholes and deductions. There's no reason why we should keep them at a time when we're trying to cut down on our deficit. And if we are going to close these loopholes, then there's no reason we should use the savings that we obtain and turn around and spend that on new tax breaks for the wealthiest or for corporations.
"If we're serious about paying down the deficit, the savings we achieve from tax reform should be used to pay down the deficit, and potentially to make our businesses more competitive," he argued.
Obama said this balanced mix of spending cuts and tax reform is the best way to finish the job of deficit reduction.
He said that the overwhelming majority of the American people -- Democrats and Republicans, as well as independents -- have the same view.
"And both the House and the Senate are working towards budget proposals that I hope reflect this balanced approach. Having said that, I know that a full budget may not be finished before March 1st, and, unfortunately, that's the date when a series of harmful automatic cuts to job-creating investments and defence spending -- also known as the sequester -- are scheduled to take effect," he said.
"So if Congress can't act immediately on a bigger package, if they can't get a bigger package done by the time the sequester is scheduled to go into effect, then I believe that they should at least pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months until Congress finds a way to replace these cuts with a smarter solution," said the US President.
Obama argued there is no reason that the jobs of thousands of Americans who work in national security or education or clean energy, not to mention the growth of the entire economy, should be put in jeopardy just because folks in Washington couldn't come together to eliminate a few special interest tax loopholes or government programs that we agree need some reform.
"Congress is already working towards a budget that would permanently replace the sequester. At the very least, we should give them the chance to come up with this budget instead of making indiscriminate cuts now that will cost us jobs and significantly slow down our recovery," he said.
