President Obama Federal Deficit Budget Deal Speech
The proposal, which comes as House Republicans get set to vote on a budget of their own and a bipartisan group of six Senators chart their own deficit-reduction framework, includes a mixture of tax hikes, drastic spending cuts, reductions in the Pentagon’s budget and smaller entitlement reforms. It would seek to achieve a final balance of three dollars in spending reductions for every dollar generated in additional tax revenue.
"Now that our economic recovery is gaining strength, Democrats and Republicans must come together and restore the fiscal responsibility that served us so well in the 1990s," the president said in a speech at George Washington University. "We have to live within our means, reduce our deficit, and get back on a path that will allow us to pay down our debt. And we have to do it in a way that protects the recovery, and protects the investments we need to grow, create jobs and win the future."
In a nod to the likelihood that a compromise won’t be reached, President Obama also included a “debt fail-safe” trigger, mandating that Congress pass across-the-board spending reductions if the nation’s debt is not on a declining path as a share of the economy by the second half of the decade.
“The exact design of that we would have to work out, obviously,” said a senior administration official, previewing the President’s speech. “I think what is important is the idea. [...] The goal of a fail-safe is actually to give confidence that no matter what happens, a degree of deficit reduction will be met,” the official said.
White House advisers projected the president’s fiscal framework would reduce deficits as a share of the economy to about 2.5 percent of GDP by 2015.
The politics surrounding the proposal appeared almost immediately complicated. Even before the President announced his plan, Congressional Republican leadership, fresh off a White House meeting of their own, hosted a press conference in which they announced a tax hike to be a non-starter in negotiations and re-affirmed their commitment to the budget proposal introduced by House Budget Committee Chairman Paul Ryan (R-Wisc.).
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