All the Congressional leaders have reiterated the desire to make sure that the United States does not default on our obligations, and that the full faith and credit of the US is preserved. That is a good thing. I think we should not even be this close to a deadline on this issue; this should have been taken care of earlier. But it is encouraging that everybody believes that this is something that has to be addressed. And for the general public — I’ve said this before, but I just want to reiterate — this is not some abstract issue. These are obligations that the US has taken on in the past. Congress has run up the credit card, and we now have an obligation to pay our bills. If we do not, it could have a whole set of adverse consequences. We could end up with a situation, for example, where interest rates rise for everybody throughout the country, effectively a tax increase on everybody, because suddenly whether you’re using your credit or you’re trying to get a loan for a car or a student loan, businesses that are trying to make payroll, all of them could end up being impacted as a consequence of a default.
Now, what is important is that even as we raise the debt ceiling, we also solve the problem of underlying debt and deficits. And so during the course of these discussions with Congressional leaders, what I’ve tried to emphasise is we have a unique opportunity to do something big. We have a chance to stabilise America’s finances for a decade, for 15 years, or 20 years, if we’re willing to seize the moment.
Now, what that would require would be some shared sacrifice and a balanced approach that says we’re going to make significant cuts in domestic spending. And I have already said I am willing to take down domestic spending to the lowest percentage of our overall economy since Dwight Eisenhower.
It also requires cuts in defence spending, and I’ve said that in addition to the $400 billion that we’ve already cut from defence spending, we’re willing to look for hundreds of billions more.
It would require us taking on healthcare spending. And that includes looking at medicare and finding ways that we can stabilise the system so that it is available not just for this generation but for future generations. And it would require revenues. It would require, even as we’re asking the person who needs a student loan or the senior citizen or people — veterans who are trying to get by on a disability check — even as we’re trying to make sure that all those programmes are affordable, we’re also saying to folks like myself that can afford it that we are able and willing to do a little bit more; that millionaires and billionaires can afford to do a little bit more; that we can close corporate loopholes so that oil companies aren’t getting unnecessary tax breaks or that corporate jet owners aren’t getting unnecessary tax breaks.
If we take that approach, I am confident that we cannot only impress the financial markets, but more importantly, we can actually impress the American people that this town can actually get something done once in a while.
Now, let me acknowledge what everybody understands: It is hard to do a big package. My Republican friends have said that they’re not willing to do revenues and they have repeated that on several occasions. My hope, though, is that they’re listening not just to lobbyists or special interests here in Washington, but they’re also listening to the American people. The clear majority of Republican voters thinks that any deficit reduction package should have a balanced approach and should include some revenues. That’s not just Democrats; that’s the majority of Republicans. You’ve got a whole slew of Republican officials from previous administrations. You’ve got a bipartisan commission that has said that we need revenues. So, this is not just a Democratic understanding; this is an understanding that I think the American people hold that we should not be asking for sacrifices from middle-class folks who are working hard every day, from the most vulnerable in our society — we should not be asking them to make sacrifices if we’re not asking the most fortunate in our society to make some sacrifices as well.
So, I am still pushing for us to achieve a big deal. But, what I also said to the group is if we can’t do the biggest deal possible, then let’s still be ambitious; let’s still try to at least get a down payment on deficit reduction. And that we can actually accomplish without huge changes in revenue or significant changes in entitlements, but we could still send a signal that we are serious about this problem.
Edited version of opening remarks by the US President Barack Obama ahead of a press conference on state of the US economy in Washington on July 15
