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Obama to speak today on reducing federal debt

  • McClatchy Newspapers
  • Published Wednesday, April 13, 2011, at 12:06 a.m.

WASHINGTON — President Obama, in a speech today, will tell Americans more about how he favors mixing tax increases and cuts to Medicare and Medicaid to control long-term deficit spending.

But he'll be in for a rough time passing any such sweeping changes through a wary Congress before the next presidential election.

Republican leaders blasted Obama's speech even before they knew what he'd say. House Speaker John Boehner of Ohio called any tax increase "unacceptable and a non-starter," while Senate Republican Leader Mitch McConnell, R-Ky., said Obama had to be "dragged into this discussion" on the fiscal crisis.

As if to prove McConnell wrong, Obama announced hours later that he was inviting bipartisan leaders from the House of Representatives and the Senate to come to the White House this morning for a preview of his afternoon address.

But Obama made it clear he won't go as far as House Republicans, who have written a plan to make dramatic changes in Medicare, the federal health care program for seniors and some disabled people.

That plan, due for a House vote Friday, is a "non-starter," White House press secretary Jay Carney said Tuesday.

Independent budget analyst Stan Collender said he doesn't expect Obama to push now for major change to Medicare. Such a revamp, he said, "is a two-year debate. You're not going to rush into it."

Congress' best hope for changes in entitlement programs probably rests with the six senators, three from each party, who have been trying for months to negotiate a compromise.

The senators hope to have recommendations ready soon, and the primary motivator, they believe, will be the forthcoming debate over raising the $14.3 trillion debt limit.

While the White House is discouraging any deal-making tied to that vote, saying it could set off a global economic crisis, the threat of fiscal conservatives withholding their support could serve as leverage to negotiate at least incremental spending cuts.

"It's amazing how quickly things get done when people get their backs against the wall," said Sen. Saxby Chambliss, R-Ga.

Sen. Susan Collins, R-Maine, a moderate who's not part of the gang of six, said Obama needs to go beyond talking in broad strokes and to engage in specifics about what he wants and what he's willing to accept. "The president needs to set out his own plan."

Sen. Ben Nelson, D-Neb., another moderate, said Medicare could be "tweaked" before the 2012 elections, but he's not sure it can be overhauled.

And Sen. Rand Paul, R-Ky., said it would take "a crisis" to forge a bipartisan deal on major changes to Medicare.

Rejecting criticism

Carney rejected criticism from some within Obama's own party that the president has been too passive in budget negotiations.

He said Obama cares more about results than perceptions and that "sometimes that means not saying anything at all, sometimes it means having very discreet conversations by phone or discreet meetings in the White House," and sometimes "refraining, despite a chorus of encouragement, refraining from flaming the opposition because you don't believe that's helpful to your ultimate goal."

While the debt limit is expected to be reached in mid-May, officials say a vote to raise the limit probably can be delayed until July without much consequence.

House Majority Leader Eric Cantor, R-Va., said that buys some time to reach a deal on spending cuts, which Republicans will demand in exchange for any support of a higher debt limit. House Republicans aren't poised to support tax increases on the wealthy, which Obama has said should happen after the economy recovers.

Carney wouldn't say Tuesday whether Obama supports a proposal to institute statutory budget controls with automatic enforcement mechanisms as a way to appease Republicans.

Under a plan promoted by some fiscal experts including former U.S. comptroller general David Walker, spending cuts and temporary tax surcharges could be started in 2013 if targets aren't met to reduce debt as a percentage of the economy.

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