In a statement from the briefing room today, President Obama explained that while our economy is headed in the right direction, looming automatic budget cuts will cost jobs and slow down our recovery.
But, those deep, indiscriminate cuts to job-creating investments and defense spending, also known as the sequester, don't have to happen, the President said. He's already worked with Democrats and Republicans in Congress to cut the deficit by more than $2.5 trillion through a balanced mix of spending cuts and higher tax rates for the wealthiest Americans, but there's more to be done to meet the $4 trillion in deficit reduction needed to stabilize our debt.
"I think this balanced mix of spending cuts and tax reform is the best way to finish the job of deficit reduction," the President said.
The reforms to Medicare and other entitlements the President proposed during the fiscal cliff negotiations are still on the table, he said. "These reforms would reduce our government’s bills by reducing the cost of health care, not shifting all those costs on to middle-class seniors, or the working poor, or children with disabilities, but nevertheless, achieving the kinds of savings that we're looking for"
"But in order to achieve the full $4 trillion in deficit reductions that is the stated goal of economists and our elected leaders, these modest reforms in our 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," President Obama said.
If Congress can't finish a full budget by March 1, when the sequester is scheduled to take effect, President Obama called on lawmakers to at least pass a smaller package of spending cuts and tax reforms that would delay the the economically damaging effects of the automatic cuts.
"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," he said.