Remarks by the President on the Status of Efforts to Find a Balanced Approach to Deficit Reduction

James S. Brady Press Briefing Room

1:32 P.M. EDT

        THE PRESIDENT:  Hello, everybody.  I wanted to give folks a quick update on the progress that we're making on the debt ceiling discussions.

        I was in contact with all the leadership over the course of the weekend and continued to urge both Democrats and Republicans to come together around an approach that not only lifts the debt ceiling but also solves the underlying challenges that we face when it comes to debt and deficits.  

        Some progress was made in some of the discussions, some narrowing of the issues.  Speaker Boehner and the Republican House caucus felt it necessary to put forward the plan that they're going to be voting on today.  I think everyone's estimation is, is that that is not an approach that could pass both chambers, it's not an approach that I would sign and it's not balanced.  But I understand the need for them to test that proposition.

        The problem we have now is we're in the 11th hour and we don't have a lot more time left.  The good news is that today a group of senators, the Gang of Six, Democrats and Republicans -- I guess now Gang of Seven, because one additional Republican senator added on -- put forward a proposal that is broadly consistent with the approach that I've urged.  What it says is we've got to be serious about reducing discretionary spending both in domestic spending and defense; we've got to be serious about tackling health care spending and entitlements in a serious way; and we've got to have some additional revenue so that we have an approach in which there is shared sacrifice and everybody is giving up something.

        And so, for us to see Democratic senators acknowledge that we've got to deal with our long-term debt problems that arise out of our various entitlement programs, and for Republican senators to acknowledge that revenues will have to be part of a balanced package that makes sure that nobody is disproportionately hurt from us making progress on the debt and deficits I think is a very significant step.  And as I said, the framework that they put forward is broadly consistent with what we've been working on here in the White House and with the presentations that I've made to the leadership when they've come over here.

        So here's where we stand.  We have a Democratic President and administration that is prepared to sign a tough package that includes both spending cuts, modifications to Social Security, Medicaid and Medicare that would strengthen those systems and allow them to move forward, and would include a revenue component.  We now have a bipartisan group of senators who agree with that balanced approach.  And we’ve got the American people who agree with that balanced approach.  

        My hope, and what I will be urging Speaker Boehner, Nancy Pelosi, as well as Leader Reid and Mitch McConnell, is that they, tomorrow, are prepared to start talking turkey and actually getting down to the hard business of crafting a plan that can move this forward in time for the August 2nd deadline that we’ve set forward.

        Just a couple of other points I will make.  Some of you may ask, what does it mean for the plan that Senator McConnell and Senator Reid had been working on?  Our attitude is, is that that continues to be a necessary approach to put forward.  In the event that we don’t get an agreement, at minimum, we’ve got to raise the debt ceiling.  So that’s the bare minimum that has to be achieved, but we continue to believe that we can achieve more.

        And so I want to congratulate the Gang of Six for coming up with a plan that I think is balanced.  We just received it, so we haven’t reviewed all the details of it.  It would not match perfectly with some of the approaches that we’ve taken, but I think that we’re in the same playing field.  And my hope is, is that we can start gathering everybody over the next couple of days to choose a clear direction and to get this issue resolved.  
        So far, at least, the markets have shown confidence that leadership here in Washington are not going to send the economy over a cliff.  But if we continue to go through a lot of political posturing, if both sides continue to be dug in, if we don’t have a basic spirit of cooperation that allows us to rise above immediate election-year politics and actually solve problems, then I think markets here, the American people, and the international community are going to start reacting adversely fairly quickly.

        So I think it’s very important for in these next couple of days to understand we don’t have any more time to engage in symbolic gestures; we don’t have any more time to posture.  It’s time to get down to the business of actually solving this problem.  And I think we now are seeing the potential for a bipartisan consensus around what that would take.

        It will be hard.  It will be tough.  There are still going to be a lot of difficult negotiations that have to take place in order for us to actually get something done.  And as I said, we have to have that failsafe that Senator McConnell and Senator Reid are working on.  But the hope is, is that everybody seizes this opportunity.

        All right?  Okay, guys, I’m going to let Jay answer questions today.  I think I’ve been pretty good to you guys.  (Laughter.)  But after the votes today in the House, I’ll call up Speaker Boehner and the other leadership and we’ll arrange for times where we bring folks back here, and hopefully we’ll be able to report on some additional progress over the next few days.

        All right?  Thank you very much, guys.

        Q    When will you announce whether you will be supporting the Gang of Six plan?  Would that be in the next day?

        THE PRESIDENT:  Well, as I said, I think what you’re going to be seeing is an evaluation of that plan versus the things that we’ve been looking at.  I think what you’re going to see is some significant overlap.  But obviously just because we might agree in principle with a range of issues with six senators or seven senators, that doesn’t get us out of the House of Representatives; that doesn’t get us out of the Senate.  There’s going to have to be a broader agreement on the part of all the leadership that we’re going to get this done in a serious way, and we’ve got a tight deadline to do it.  

        All right?  Thanks, guys.

END 1:38 P.M. EDT

Press Conference by the President

James S. Brady Press Briefing Room

10:58 A.M. EDT

THE PRESIDENT:  Hello, everybody.  As you know, yesterday we had another meeting with the congressional leaders.  We’re not having one today, so I thought it would be useful to give you guys an update on where we are.

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 United States 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 United States 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 all 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.  I’m glad that congressional leaders don’t want to default, but I think the American people expect more than that.  They expect that we actually try to solve this problem, we get our fiscal house in order.

And so during the course of these discussions with congressional leaders, what I’ve tried to emphasize is we have a unique opportunity to do something big.  We have a chance to stabilize America’s finances for a decade, for 15 years, or 20 years, if we’re wiling 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 defense spending, and I’ve said that in addition to the $400 billion that we’ve already cut from defense spending, we’re willing to look for hundreds of billions more.

It would require us taking on health care spending.  And that includes looking at Medicare and finding ways that we can stabilize 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 programs 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, then I am confident that we can not 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.  Because it turns out poll after poll, many done by your organizations, show that it’s not just Democrats who think we need to take a balanced approach; it’s Republicans as well. 

The clear majority of Republican voters think 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 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.

The fallback position, the third option and I think the least attractive option, is one in which we raise the debt ceiling but we don’t make any progress on deficit and debt.  Because if we take that approach, this issue is going to continue to plague us for months and years to come.  And I think it’s important for the American people that everybody in this town set politics aside, that everybody in this town set our individual interests aside, and we try to do some tough stuff.  And I’ve already taken some heat from my party for being willing to compromise.  My expectation and hope is, is that everybody, in the coming days, is going to be willing to compromise.

The last point I’ll make and then I’ll take questions -- we are obviously running out of time.  And so what I’ve said to the members of Congress is that you need, over the next 24 to 36 hours, to give me some sense of what your plan is to get the debt ceiling raised through whatever mechanisms they can think about, and show me a plan in terms of what you’re doing for deficit and debt reduction. 

If they show me a serious plan, I’m ready to move, even if requires some tough decisions on my part.  And I’m hopeful that over the next couple of days we’ll see logjam break -- this logjam broken, because the American people I think understandably want to see Washington do its job.  All right?

So with that, let me see who’s on the list.  We’re going to start with Jake Tapper.

Q    Thank you, Mr. President.  You’ve said that reducing the deficit will require shared sacrifice.  We know -- we have an idea of the taxes that you would like to see raised on corporations and on Americans in the top two tax brackets, but we don’t yet know what you specifically are willing to do when it comes to entitlement spending.  In the interest of transparency, leadership, and also showing the American people that you have been negotiating in good faith, can you tell us one structural reform that you are willing to make to one of these entitlement programs that would have a major impact on the deficit?  Would you be willing to raise the retirement age?  Would you be willing to means test Social Security or Medicare?

THE PRESIDENT:  We’ve said that we are willing to look at all those approaches.  I’ve laid out some criteria in terms of what would be acceptable.  So, for example, I’ve said very clearly that we should make sure that current beneficiaries as much as possible are not affected.  But we should look at what can we do in the out-years, so that over time some of these programs are more sustainable.

I’ve said that means testing on Medicare, meaning people like myself, if -- I’m going to be turning 50 in a week.  So I’m starting to think a little bit more about Medicare eligibility.  (Laughter.)  Yes, I’m going to get my AARP card soon -- and the discounts. 

But you can envision a situation where for somebody in my position, me having to pay a little bit more on premiums or co-pays or things like that would be appropriate.  And, again, that could make a difference.  So we’ve been very clear about where we’re willing to go. 
                               
What we’re not willing to do is to restructure the program in the ways that we’ve seen coming out of the House over the last several months where we would voucherize the program and you potentially have senior citizens paying $6,000 more.  I view Social Security and Medicare as the most important social safety nets that we have.  I think it is important for them to remain as social insurance programs that give people some certainty and reliability in their golden years. 

But it turns out that making some modest modifications in those entitlements can save you trillions of dollars.  And it’s not necessary to completely revamp the program.  What is necessary is to say how do we make some modifications, including, by the way, on the providers’ side.  I think that it’s important for us to keep in mind that drug companies, for example, are still doing very well through the Medicare program.  And although we have made drugs more available at a cheaper price to seniors who are in Medicare through the Affordable Care Act, there’s more work to potentially be done there.

So if you look at a balanced package even within the entitlement programs, it turns out that you can save trillions of dollars while maintaining the core integrity of the program.

Q    And the retirement age?

THE PRESIDENT:  I’m not going to get into specifics.  As I said, Jake, everything that you mentioned are things that we have discussed.  But what I’m not going to do is to ask for even -- well, let me put it this way:  If you’re a senior citizen, and a modification potentially costs you a hundred or two hundred bucks a year more, or even if it’s not affecting current beneficiaries, somebody who’s 40 today 20 years from now is going to end up having to pay a little bit more.

The least I can do is to say that people who are making a million dollars or more have to do something as well.  And that’s the kind of tradeoff, that’s the kind of balanced approach and shared sacrifice that I think most Americans agree needs to happen.

Q    Thank you.

THE PRESIDENT:  Hans.

Q    Yes.  Thank you, Mr. President.  I just thought I heard you kind of open up the door to this middle-of-the-road possibility.  I think you said, “Show me a serious plan, and then I’m prepared to move.”  Just a few minutes before you came here, House Republicans said they’d be voting on this $2.4 trillion package as a balanced budget amendment.  Is that a serious plan?  Is it dead on arrival, or does it short-circuit what you expect to happen in the next 24, 36 hours?

THE PRESIDENT:  I haven’t looked at it yet, and I think -- my expectation is that you’ll probably see the House vote on a couple of things just to make political statements.  But if you’re trying to get to $2.4 trillion without any revenue, then you are effectively gutting a whole bunch of domestic spending that is going to be too burdensome and is not going to be something that I would support. 

Just to be very specific, we’ve identified over a trillion dollars in discretionary cuts, both in defense and domestic spending.  That’s hard to do.  I mean, that requires essentially that you freeze spending.  And when I say freeze, that means you’re not getting inflation so that these are programmatic cuts that, over the course of 10 years, you’d be looking at potentially a 10 percent cut in domestic spending. 

Now, if you then double that number, you’re then, at that point, really taking a big bite out of programs that are really important to ordinary folks.  I mean, you’re talking then about students accumulating thousands of dollars more in student loan debt every year; you’re talking about federal workers and veterans and others potentially having to pay more in terms of their health care. 

So I have not seen a credible plan -- having gone through the numbers -- that would allow you to get to $2.4 trillion without really hurting ordinary folks.  And the notion that we would be doing that, and not asking anything from the wealthiest among us or from closing corporate loopholes -- that doesn’t seem like a serious plan to me. 

I mean, the notion that, for example, oil company tax breaks, where the oil executives themselves say that they probably don’t need them, to have an incentive to go out and drill oil and make hundreds of billions of dollars -- if we haven’t seen the other side even budge on that, then I think most Democrats would say that’s not a serious plan.

One last point on the balanced budget amendment.  I don’t know what version they’re going to be presenting, but some of the balanced budget amendments that have been floating up there -- this cap -- or cut, cap and balance, for example, when you look at the numbers, what you’re looking at is cuts of half-a-trillion dollars below the Ryan budget in any given year. I mean, it would require cutting Social Security or Medicare substantially. 

And I think it’s important for everybody to understand that all of us believe that we need to get to a point where eventually we can balance the budget.  We don’t need a constitutional amendment to do that; what we need to do is to do our jobs. 

And we have to do it the same way a family would do it.  A family, if they get over-extended and their credit card is too high, they don’t just stop paying their bills.  What they do is they say, how do we start cutting our monthly costs?  We keep on making payments, but we start cutting out the things that aren’t necessary.  And we do it in a way that maintains our credit rating.  We do it in a way that’s responsible -- we don’t stop sending our kids to college; we don’t stop fixing the boiler or the roof that’s leaking.  We do things in a sensible, responsible way.  We can do the same thing when it comes to the federal budget.

Q    So within that $2 trillion band, if you end up going for this middle-of-the-road package, which I think you referred to as “the second option,” would that need to have, for your signature, some sort of stimulative measures -- either payroll tax extension or the extension of the unemployment insurance?

THE PRESIDENT:  I think both would be good for the economy.  A payroll tax cut is something that has put a thousand dollars in the pocket of the typical American family over the last six, seven months and has helped offset some of the rising costs in gasoline and food.  And I think that American consumers and American businesses would benefit from a continuation of that tax cut next year.

Unemployment insurance.  Obviously unemployment is still too high.  And there are a lot of folks out there who are doing everything they can to find a job, but the market is still tight out there.  And for us to make sure that they are able to stay in their homes, potentially, or they’re able to still support their families, I think is very important and contributes to the overall economy.

So I think there are ways that you can essentially take a little over a trillion dollars in serious discretionary cuts, meaningful discretionary cuts, and then start building on top of that some cuts in non-health care mandatory payments, ethanol programs, or how we calculate various subsidies to various industries.  That could potentially be layered on.  And we could still do something like a tax cut for ordinary families that would end up benefiting the economy as a whole. 

That is not my preferable option, though.  I just want to be clear.  I think about this like a layer cake.  You can do the bare minimum and then you can make some progressively harder decisions to solve the problem more and more. 

And we’re in a position now where if we’re serious about this and everybody is willing to compromise, we can, as I said before, fix this thing probably for a decade or more.  And that’s something that I think would be good for the overall business climate and would encourage the American people that Washington actually is willing to take care of its business.  

Q    Good for the business -- for the climate, though, but not required for your signature -- is that what I heard?

THE PRESIDENT:  I’m sorry, I lost you on that one.

Q    So you’re saying these stimulative measures would be good for the business climate and good for the economy, but you’re not saying that they need to be included for you to sign either a $2 trillion or $4 trillion --

THE PRESIDENT:  I’ve got to look at an overall package, Hans.  I don’t know what the Speaker or Mr. McConnell are willing to do at this point. 

Okay.  Chuck Todd.

Q    Mr. President, this process got kind of ugly in the last week.  And it appears from the outside that things even got a little futile at these meetings.  Any regrets on your role in how this went?  And do you have any regrets that you never took Bowles-Simpson, which was $4 trillion over 10 years, and spent the last six months selling that, which was a balanced package, to the American people?

THE PRESIDENT:  No.  First of all, I think this notion that things got ugly is just not true.  We’ve been meeting every single day and we have had very constructive conversations. 

The American people are not interested in the reality TV aspects of who said what and did somebody’s feelings get hurt.  They’re interested in solving the budget problem and the deficit and the debt.  And so that may be good for chatter in this town; it’s not something that folks out in the country are obsessing about.

I think with respect to Bowles-Simpson, it was important for us to -- Bowles-Simpson wouldn’t have happened had I not set up the structure for it.  As you will recall, this was originally bipartisan legislation that some of the Republican supporters of decided to vote against when I said I supported it -- that seems to be a pattern that I’m still puzzled by.  And so we set it up.  They issued a report.  And what I said was this provides us an important framework to begin discussions. 

But there were aspects of Bowles-Simpson that I said from very early on were not the approach I would take.  I’ll give you an example.  On defense spending, a huge amount of their savings on the discretionary side came out of defense spending.  I think we need to cut defense, but as Commander-in-Chief, I’ve got to make sure that we’re cutting it in a way that recognizes we’re still in the middle of a war, we’re winding down another war, and we’ve got a whole bunch of veterans that we’ve got to care for as they come home. 

And so what we’ve said is a lot of the components of Bowles-Simpson we are willing to embrace -- for example, the domestic spending cuts that they recommend we’ve basically taken.  Others, like on defense, we have taken some but not all the recommendations, because it’s important for it to be consistent with our defense needs and our security needs.

The bottom line is that this is not an issue of salesmanship to the American people; the American people are sold.  The American people are sold.  I just want to repeat this.  The whole --

Q    You don’t think the whole debate would have been different?  You had Republican support on it.

THE PRESIDENT:  Chuck --

Q    Tom Coburn, the Republican senator, signed onto it.

THE PRESIDENT:  Chuck, you have 80 percent of the American people who support a balanced approach.  Eighty percent of the American people support an approach that includes revenues and includes cuts.  So the notion that somehow the American people aren’t sold is not the problem.  The problem is members of Congress are dug in ideologically into various positions because they boxed themselves in with previous statements. 

And so this is not a matter of the American people knowing what the right thing to do is.  This is a matter of Congress doing the right thing and reflecting the will of the American people.  And if we do that, we will have solved this problem.

Lori Montgomery.

Q    Thank you, Mr. President.  I wanted to ask you about the two trains that seem to be rolling down the tracks on the Hill.  Specifically, Leader McConnell has laid out an elaborate plan to raise the debt limit.  He said last night that it looks like they’re going to pair that with a new committee that would be tasked with coming up with the big solution that you talk about by the end of the year.  Your comment on that proposal. 

Meanwhile, in the House, they’re saying, well, we can be flexible on some of our demands if we could get a balanced budget amendment.  And they note that Vice President Biden voted for a BBA in 1997.  Is there any way that that could be part of a solution?  Is there any version of a BBA that you would support?

THE PRESIDENT:  First of all, for the consumption of the general public, BBA meaning a balanced budget amendment.

Q    Thank you.

THE PRESIDENT:  I think I already addressed this question earlier.  We don’t need a constitutional amendment to do our jobs.  The Constitution already tells us to do our jobs -- and to make sure that the government is living within its means and making responsible choices.

And so, this notion that we’re going to go through a multiyear process instead of seizing the moment now and taking care of our problems is a typical Washington response.  We don’t need more studies.  We don’t need a balanced budget amendment.  We simply need to make these tough choices and be willing to take on our bases.  And everybody knows it.  I mean, we could have a discussion right here about what the numbers look like and we know what’s necessary. 

And here’s the good news -- it turns out we don’t have to do anything radical to solve this problem.  Contrary to what some folks say, we’re not Greece, we’re not Portugal.  It turns out that our problem is we cut taxes without paying for them over the last decade; we ended up instituting new programs like a prescription drug program for seniors that was not paid for; we fought two wars, we didn’t pay for them; we had a bad recession that required a Recovery Act and stimulus spending and helping states -- and all that accumulated and there’s interest on top of that. 

And to unwind that, what’s required is that we roll back those tax cuts on the wealthiest individuals, that we clean up our tax code so we’re not giving out a bunch of tax breaks to companies that don’t need them and are not creating jobs, we cut programs that we don’t need, and we invest in those things that are going to help us grow. 

And every commission that’s been out there has said the same thing and basically taken the same approach, within the margin of error. 

So my general view is that if the American people looked at this, they’d say, boy, some of these decisions are tough, but they don’t require us to gut Medicare or Social Security.  They don’t require us to stop helping young people go to college.  They don’t require us to stop helping families who've got a disabled child.  They don’t require us to violate our obligations to our veterans.  And they don’t require “job-killing tax cuts.” [sic]  They require us to make some modest adjustments to get our house in order, and we should do it now.

With respect to Senator McConnell’s plan, as I said, I think it is a -- it is constructive to say that if Washington operates as usual and can’t get anything done, let’s at least avert Armageddon.  I’m glad that people are serious about the consequences of default.

But we have two problems here.  One is raising the debt ceiling -- this is a problem that was manufactured here in Washington, because every single one of the leaders over there have voted for raising the debt ceiling in the past -- and has typically been a difficult, but routine process. And we do have a genuine underlying problem that our debt and deficits are too big.  So Senator McConnell’s approach solves the first problem.  It doesn’t solve the second problem.  I’d like to solve that second problem.

Q    But are you looking at this option as a more likely outcome at this point?  Or can you share with us why you have some hope that the talks that have been going on might actually produce an outcome?

THE PRESIDENT:  I always have hope.  Don’t you remember my campaign?  (Laughter.)  Even after being here for two-and-a-half years I continue to have hope.  You know why I have hope?  It’s because of the American people.  When I talk to them and I meet with them, as frustrated as they are about this town, they still reflect good common sense.  And all we have to do is align with that common sense on this problem, it can get solved.

And I’m assuming that at some point, members of Congress are going to listen.  I just want to repeat, every Republican -- not -- I won’t say every.  A number of Republican former elected officials -- they’re not in office now -- would say a balanced approach that includes some revenue is the right thing to do.  The majority of Republican voters say that approach is the right thing to do.  The proposal that I was discussing with Speaker Boehner fell squarely in line with what most Republican voters think we should do.  So the question is at what point do folks over there start listening to the people who put them in office?  Now is a good time.

Sam Youngman.

Q    Good morning, Mr. President.  I’d like to go back to something Chuck asked, his first question, about the tone of this debate.  I faintly remember your campaign.  And I’m guessing that while it hasn’t been ugly, as you say, it’s not what you had in mind when you said you wanted to change the tone in Washington.  When you have Senator McConnell making comments that he views these negotiations through the prism of 2012, how much does that poison the well?  And going forward, if -- big if -- you can get a deal on this, can you get anything done with Congress for the next year and a half?

THE PRESIDENT:  Well, let me say this.  And I’m not trying to poke at you guys.  I generally don’t watch what is said about me on cable.  I generally don’t read what’s said about me, even in The Hill.  And so part of this job is having a thick skin and understanding that a lot of this stuff is not personal. 

That’s not going to be an impediment to -- whatever Senator McConnell says about me on the floor of the Senate is not going to be an impediment to us getting a deal done.  The question is going to be whether at any given moment we’re willing to set politics aside, at least briefly, in order to get something done.

I don’t expect politicians not to think about politics.  But every so often there are issues that are urgent, that have to be attended to, and require us to do things we don’t like to do that run contrary to our base, that gets some constituency that helped elect us agitated because they’re looking at it from a narrow prism.  We’re supposed to be stepping back and looking at it from the perspective of what’s good for the country.  And if we are able to remind ourselves of that, then there's no reason why we shouldn’t be able to get things done. 

Look, we’ve been obsessing over the last couple of weeks about raising the debt ceiling and reducing the debt and deficit.  I’ll tell you what the American people are obsessing about right now is that unemployment is still way too high and too many folks’ homes are still underwater, and prices of things that they need, not just that they want, are going up a lot faster than their paychecks are if they’ve got a job.

And so even after we solve this problem we still got a lot of work to do.  Hans was mentioning we should renew the payroll tax for another year, we should make sure unemployment insurance is there for another year --

Q    Sir, I don't believe that was my point.  (Laughter.) 

THE PRESIDENT:  But you were making the point about whether or not that issue could be wrapped into this deal.  My point is that those are a whole other set of issues that we need to be talking about and working on.  I’ve got an infrastructure bank bill that would start putting construction workers back to work rebuilding our roads and bridges.  We should be cooperating on that.

Most of the things that I’ve proposed to help spur on additional job growth are traditionally bipartisan.  I’ve got three trade deals sitting ready to go.  And these are all trade deals that the Republicans told me were their top priorities.  They said this would be one of the best job creators that we could have.  And yet it’s still being held up because some folks don’t want to provide trade adjustment assistance to people who may be displaced as a consequence of trade.  Surely we can come up with a compromise to solve those problems.

So there will be huge differences between now and November 2012 between the parties, and whoever the Republican nominee is, we’re going to have a big, serious debate about what we believe is the right way to guide America forward and to win the future.  And I’m confident that I will win that debate, because I think that we’ve got the better approach.  But in the meantime, surely we can, every once in a while, sit down and actually do something that helps the American people right here and right now.

Q    It’s in the meantime, sir, that I’m curious about.  As you just said, raising the debt ceiling is apparently fairly routine, but it’s brought us to the point of economic Armageddon, as you said.  If you can get past this one, how can you get any agreement with Congress on those big issues you talked about?

THE PRESIDENT:  I am going to keep on working and I’m going to keep on trying.  And what I’m going to do is to hope that, in part, this debate has focused the American people’s attention a little bit more and will subject Congress to scrutiny.  And I think increasingly the American people are going to say to themselves, you know what, if a party or a politician is constantly taking the position "my way or the high way," constantly being locked into ideologically rigid positions, that we’re going to remember at the polls.

It’s kind of cumulative.  The American people aren’t paying attention to the details of every aspect of this negotiation, but I think what the American people are paying attention to is who seems to be trying to get something done, and who seems to be just posturing and trying to score political points.  And I think it’s going to be in the interests of everybody who wants to continue to serve in this town to make sure that they are on the right side of that impression.

And that’s, by the way, what I said in the meeting two days ago.  I was very blunt.  I said the American people do not want to see a bunch of posturing; they don’t want to hear a bunch of sound bites.  What they want is for us to solve problems, and we all have to remember that.  That’s why we were sent here.

Last question -- Scott Horsley. 

Q    Thank you, Mr. President.  I wonder if you've seen any sign this week of daily meetings that Republicans are being more aligned with that American majority, or if we are in the same place today that we were on Monday.

THE PRESIDENT:  It's probably better for you to ask them how they're thinking.  I do think that -- and I've said this before -- Speaker Boehner, in good faith, was trying to see if it was possible to get a big deal done.  He had some problems in his caucus.  My hope is, is that after some reflection, after we walked through all the numbers this week and we looked at all the options, that there may be some movement, some possibility, some interest to still get something more than the bare minimum done.

But we're running out of time.  That's the main concern that I have at this point.  We have enough time to do a big deal.  I've got reams of paper and printouts and spreadsheets on my desk, and so we know how we can create a package that solves the deficits and debt for a significant period of time.  But in order to do that, we got to get started now.  And that's why I'm expecting some answers from all the congressional leaders sometime in the next couple of days.

And I have to say this is tough on the Democratic side, too.  Some of the things that I've talked about and said I would be willing to see happen, there are some Democrats who think that's absolutely unacceptable.  And so that's where I'd have a selling job, Chuck, is trying to sell some of our party that if you are a progressive, you should be concerned about debt and deficit just as much as if you're a conservative.   And the reason is because if the only thing we're talking about over the next year, two years, five years, is debt and deficits, then it's very hard to start talking about how do we make investments in community colleges so that our kids are trained, how do we actually rebuild $2 trillion worth of crumbling infrastructure.

If you care about making investments in our kids and making investments in our infrastructure and making investments in basic research, then you should want our fiscal house in order, so that every time we propose a new initiative somebody doesn’t just throw up their hands and say, "Ah, more big spending, more government."

It would be very helpful for us to be able to say to the American people, our fiscal house is in order.  And so now the question is what should we be doing to win the future and make ourselves more competitive and create more jobs, and what aspects of what government is doing are a waste and we should eliminate.  And that's the kind of debate that I'd like to have.

All right?  Thank you, guys. 

END
11:39 A.M. EDT

Press Conference by the President

James S. Brady Press Briefing Room

11:15 A.M. EDT

        THE PRESIDENT:  Good morning, everybody.  I want to give a quick update on what's happening with the debt negotiations, provide my perspective, and then I'm going to take a few questions.

        As all of you know, I met with congressional leaders yesterday.  We're going to be meeting again today, and we're going to meet every single day until we get this thing resolved.  
        The good news is that all the leaders continue to believe, rightly, that it is not acceptable for us not to raise the debt ceiling and to allow the U.S. government to default.  We cannot threaten the United States' full faith and credit for the first time in our history.  We still have a lot of work to do, though, to get this problem solved.  And so let me just make a couple of points.  

        First of all, all of us agree that we should use this opportunity to do something meaningful on debt and deficits.  And the reports that have been out there have been largely accurate that Speaker Boehner and myself had been in a series of conversations about doing the biggest deal possible so that we could actually resolve our debt and our deficit challenge for a long stretch of time.  And I want to say I appreciate Speaker Boehner's good-faith efforts on that front.

        What I emphasized to the broader group of congressional leaders yesterday is now is the time to deal with these issues.  If not now, when?  I've been hearing from my Republican friends for quite some time that it is a moral imperative for us to tackle our debt and our deficits in a serious way.  I've been hearing from them that this is one of the things that's creating uncertainty and holding back investment on the part of the business community.  And so what I've said to them is, let's go. And it is possible for us to construct a package that would be balanced, would share sacrifice, would involve both parties taking on their sacred cows, would involved some meaningful changes to Medicare, Social Security, and Medicaid that would preserve the integrity of the programs and keep our sacred trust with our seniors, but make sure those programs were there for not just this generation but for the next generation; that it is possible for us to bring in revenues in a way that does not impede our current recovery, but is fair and balanced.  

        We have agreed to a series of spending cuts that will make the government leaner, meaner, more effective, more efficient, and give taxpayers a greater bang for their buck.  That includes defense spending.  That includes health spending.  It includes some programs that I like very much, and we -- be nice to have, but that we can’t afford right now.

        And if you look at this overall package, we could achieve a situation in which our deficits were at a manageable level and our debt levels were stabilized, and the economy as a whole I think would benefit from that.  Moreover, I think it would give the American people enormous confidence that this town can actually do something once in a while; that we can defy the expectations that we’re always thinking in terms of short-term politics and the next election, and every once in a while we break out of that and we do what’s right for the country.

        So I continue to push congressional leaders for the largest possible deal.  And there's going to be resistance.  There is, frankly, resistance on my side to do anything on entitlements.  There is strong resistance on the Republican side to do anything on revenues.  But if each side takes a maximalist position, if each side wants 100 percent of what its ideological predispositions are, then we can’t get anything done.  And I think the American people want to see something done.  They feel a sense of urgency, both about the breakdown in our political process and also about the situation in our economy.

        So what I’ve said to the leaders is, bring back to me some ideas that you think can get the necessary number of votes in the House and in the Senate.  I’m happy to consider all options, all alternatives that they’re looking at.  The things that I will not consider are a 30-day or a 60-day or a 90-day or a 180-day temporary stopgap resolution to this problem.  This is the United States of America, and we don’t manage our affairs in three-month increments.  We don’t risk U.S. default on our obligations because we can’t put politics aside.  

        So I’ve been very clear to them:  We’re going to resolve this, and we’re going to resolve this for a reasonable period of time, and we’re going to resolve it in a serious way.  And my hope is, is that as a consequence of negotiations that take place today, tomorrow, the next day and through next weekend, if necessary, that we’re going to come up with a plan that solves our short-term debt and deficit problems, avoids default, stabilizes the economy, and proves to the American people that we can actually get things done in this country and in this town.

        All right, with that I’m going to take some questions, starting with Ben Feller.

        Q    Thank you very much, Mr. President.  Two quick topics. Given that you’re running out of time, can you explain what is your plan for where these talks go if Republicans continue to oppose any tax increases, as they’ve adamantly said that they will?  And secondly, on your point about no short-term stopgap measure, if it came down to that and Congress went that route, I know you’re opposed to it but would you veto it?

        THE PRESIDENT:  I will not sign a 30-day or a 60-day or a 90-day extension.  That is just not an acceptable approach.  And if we think it’s going to be hard -- if we think it’s hard now, imagine how these guys are going to be thinking six months from now in the middle of election season where they’re all up.  It’s not going to get easier.  It’s going to get harder.  So we might as well do it now -- pull off the Band-Aid; eat our peas.  (Laughter.)  Now is the time to do it.  If not now, when?  \

        We keep on talking about this stuff and we have these high-minded pronouncements about how we've got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let's step up.  Let's do it.  I'm prepared to do it.  I'm prepared to take on significant heat from my party to get something done.  And I expect the other side should be willing to do the same thing -- if they mean what they say that this is important.

        And let me just, Ben, comment on this whole issue of tax increases, because there's been a lot of information floating around there.  I want to be crystal clear -- nobody has talked about increasing taxes now.  Nobody has talked about increases --increasing taxes next year.  What we have talked about is that starting in 2013, that we have gotten rid of some of these egregious loopholes that are benefiting corporate jet owners or oil companies at a time where they're making billions of dollars of profits.  What we have said is as part of a broader package we should have revenues, and the best place to get those revenues are from folks like me who have been extraordinarily fortunate, and that millionaires and billionaires can afford to pay a little bit more -- going back to the Bush tax rates.

        And what I've also said to Republicans is, if you don't like that formulation, then I'm happy to work with you on tax reform that could potentially lower everybody's rates and broaden the base, as long as that package was sufficiently progressive so that we weren’t balancing the budget on the backs of middle-class families and working-class families, and we weren’t letting hedge fund managers or authors of best-selling books off the hook.

        That is a reasonable proposition.  So when you hear folks saying, well, the President shouldn’t want massive, job-killing tax increases when the economy is this weak -- nobody is looking to raise taxes right now.  We're talking about potentially 2013 and the out-years.  In fact, the only proposition that's out there about raising taxes next year would be if we don't renew the payroll tax cut that we passed in December, and I'm in favor of renewing it for next year as well.  But there have been some Republicans who said we may not renew it.

        And if we don't renew that, then the $1,000 that's been going to a typical American family this year as a consequence of the tax cut that I worked with the Republicans and passed in December -- that lapses.  That could weaken the economy.  

        So I have bent over backwards to work with the Republicans to try to come up with a formulation that doesn’t require them to vote sometime in the next month to increase taxes.  What I've said is to identify a revenue package that makes sense, that is commensurate with the sacrifices we're asking other people to make, and then I'm happy to work with you to figure out how else we might do it.

        Q    Do you see any path to a deal if they don't budge on taxes?

        THE PRESIDENT:  I do not see a path to a deal if they don't budge, period.  I mean, if the basic proposition is "it's my way or the highway," then we're probably not going to get something done because we've got divided government.  We've got Democrats controlling the Senate; we probably are going to need Democratic votes in the House for any package that could possibly pass.  And so if, in fact, Mitch McConnell and John Boehner are sincere -- and I believe they are -- that they don't want to see the U.S. government default, then they're going to have to compromise just like Democrats are going to have to compromise; just like I have shown myself willing to compromise.

        Chip Reid.

        Q    Thank you, Mr. President.  You said that everybody in the room is willing to do what they have to do, wants to get something done by August 2nd.  But isn’t the problem the people who aren’t in the room, and in particular Republican presidential candidates and Republican Tea Partiers on the Hill, and the American public?  The latest CBS News poll showed that only 24 percent of Americans said you should raise the debt limit to avoid an economic catastrophe.  There are still 69 percent who oppose raising the debt limit.  So isn’t the problem that you and others have failed to convince the American people that we have a crisis here, and how are you going to change that?

        THE PRESIDENT:  Well, let me distinguish between professional politicians and the public at large.  The public is not paying close attention to the ins and outs of how a Treasury option goes.  They shouldn’t.  They're worrying about their family; they're worrying about their jobs; they're worrying about their neighborhood.  They've got a lot of other things on their plate.  We're paid to worry about it.  

        I think, depending on how you phrase the question, if you said to the American people, is it a good idea for the United States not to pay its bills and potentially create another recession that could throw millions of more people out of work, I feel pretty confident I can get a majority on my side on that one.  

        And that's the fact.  If we don't raise the debt ceiling and we see a crisis of confidence in the markets, and suddenly interest rates are going up significantly, and everybody is paying higher interest rates on their car loans, on their mortgages, on their credit cards, and that's sucking up a whole bunch of additional money out of the pockets of the American people, I promise you they won’t like that.

        Now, I will say that some of the professional politicians know better.  And for them to say that we shouldn’t be raising the debt ceiling is irresponsible.  They know better.  

        And this is not something that I am making up.  This is not something that Tim Geithner is making up.  We’re not out here trying to use this as a means of doing all these really tough political things.  I'd rather be talking about stuff that everybody welcomes -- like new programs or the NFL season getting resolved.  Unfortunately, this is what's on our plate.  It’s before us right now.  And we’ve got to deal with it.

        So what you’re right about, I think, is, is that the leaders in the room here at a certain point have to step up and do the right thing, regardless of the voices in our respective parties that are trying to undermine that effort.  

        I have a stake in John Boehner successfully persuading his caucus that this is the right thing to do, just like he has a stake in seeing me successfully persuading the Democratic Party that we should take on these problems that we’ve been talking about for too long but haven’t been doing anything about.

        Q    Do you think he’ll come back to the $4 trillion deal?

        THE PRESIDENT:  I think Speaker Boehner has been very sincere about trying to do something big.  I think he’d like to do something big.  His politics within his caucus are very difficult -- you’re right.  And this is part of the problem with a political process where folks are rewarded for saying irresponsible things to win elections or obtain short-term political gain, when we actually are in a position to try to do something hard we haven’t always laid the groundwork for.  And I think that it’s going to take some work on his side, but, look, it’s also going to take some work on our side, in order to get this thing done.

        I mean, the vast majority of Democrats on Capitol Hill would prefer not to have to do anything on entitlements; would prefer, frankly, not to have to do anything on some of these debt and deficit problems.  And I’m sympathetic to their concerns, because they’re looking after folks who are already hurting and already vulnerable, and there are a lot of families out there and seniors who are dependant on some of these programs.

        And what I’ve tried to explain to them is, number one, if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up.  I mean, it’s not an option for us to just sit by and do nothing.  And if you’re a progressive who cares about the integrity of Social Security and Medicare and Medicaid, and believes that it is part of what makes our country great that we look after our seniors and we look after the most vulnerable, then we have an obligation to make sure that we make those changes that are required to make it sustainable over the long term.

        And if you’re a progressive that cares about investments in Head Start and student loan programs and medical research and infrastructure, we’re not going to be able to make progress on those areas if we haven’t gotten our fiscal house in order.

        So the argument I’m making to my party is, the values we care about -- making sure that everybody in this country has a shot at the American Dream and everybody is out there with the opportunity to succeed if they work hard and live a responsible life, and that government has a role to play in providing some of that opportunity through things like student loans and making sure that our roads and highways and airports are functioning, and making sure that we’re investing in research and development for the high-tech jobs of the future -- if you care about those things, then you’ve got to be interested in figuring out how do we pay for that in a responsible way.

        And so, yeah, we’re going to have a sales job; this is not pleasant.  It is hard to persuade people to do hard stuff that entails trimming benefits and increasing revenues.  But the reason we’ve got a problem right now is people keep on avoiding hard things, and I think now is the time for us to go ahead and take it on.

        Rich Wolf.

        Q    Thank you, Mr. President.  You keep talking about balance, shared sacrifice, but in the $4 trillion deal that you’re talking about roughly, it seems to be now at about four-to-one spending to taxes; we’re talking about $800 billion in taxes, roughly.  That doesn’t seem very fair to some Democrats.  I’m wondering if you could clarify why we’re at that level.  And also, if you could clarify your Social Security position -- would any of the money from Social Security, even from just Chained CPI, go toward the deficit as opposed to back into the trust fund?

        THE PRESIDENT:  With respect to Social Security, Social Security is not the source of our deficit problems.  Social Security, if it is part of a package, would be an issue of how do we make sure Social Security extends its life and is strengthened?  So the reason to do Social Security is to strengthen Social Security to make sure that those benefits are there for seniors in the out-years.  And the reason to include that potentially in this package is if you’re going to take a bunch of tough votes, you might as well do it now, as opposed to trying to muster up the political will to get something done further down in the future.

        With respect to a balanced package, is the package that we’re talking about exactly what I would want?  No.  I might want more revenues and fewer cuts to programs that benefit middle-class families that are trying to send their kids to college, or benefit all of us because we’re investing more in medical research.  

        So I make no claims that somehow the position that Speaker Boehner and I discussed reflects 100 percent of what I want.  But that's the point.  My point is, is that I’m willing to move in their direction in order to get something done.  And that's what compromise entails.  We have a system of government in which everybody has got to give a little bit.  

        Now, what I will say is, is that the revenue components that we’ve discussed would be significant and would target folks who can most afford it.  And if we don't do any revenue -- because you may hear the argument that why not just go ahead and do all the cuts and we can debate the revenue issues in the election -- right?  You’ll hear that from some Republicans.  The problem is, is that if you don't do the revenues, then to get the same amount of savings you’ve got to have more cuts, which means that it’s seniors, or it’s poor kids, or it’s medical researchers, or it’s our infrastructure that suffers.  

        And I do not want, and I will not accept, a deal in which I am asked to do nothing, in fact, I’m able to keep hundreds of thousands of dollars in additional income that I don’t need, while a parent out there who is struggling to figure out how to send their kid to college suddenly finds that they’ve got a couple thousand dollars less in grants or student loans.  

        That’s what the revenue debate is about.  It’s not because I want to raise revenues for the sake of raising revenues, or I’ve got some grand ambition to create a bigger government.  It’s because if we’re going to actually solve the problem, there are a finite number of ways to do it.  And if you don’t have revenues, it means you are putting more of a burden on the people who can least afford it.  And that’s not fair.  And I think the American people agree with me on that.

        Sam Stein.

        Q    Thank you, Mr. President.  With unemployment now at 9.2 percent and a large chunk of those lost jobs coming from the private sector, is now a really good time to cut trillions of dollars in spending?  How will we still create jobs?  And then to piggyback on the Social Security question -- what do you say to members of your own party who say it doesn’t contribute to the deficit, let’s consider it but not in the context of this deal?

        THE PRESIDENT:  Our biggest priority as an administration is getting the economy back on track and putting people back to work.  Now, without relitigating the past, I’m absolutely convinced, and the vast majority of economists are convinced, that the steps we took in the Recovery Act saved millions of people their jobs or created a whole bunch of jobs.

        And part of the evidence of that is as you see what happens with the Recovery Act phasing out.  When I came into office and budgets were hemorrhaging at the state level, part of the Recovery Act was giving states help so they wouldn’t have to lay off teachers, police officers, firefighters.  As we’ve seen that federal support for states diminish, you’ve seen the biggest job losses in the public sector -- teachers, police officers, firefighters losing their jobs.

        So my strong preference would be for us to figure out ways that we can continue to provide help across the board.  But I’m operating within some political constraints here, because whatever I do has to go through the House of Representatives.  

        What that means then is, is that among the options that are available to us is, for example, the payroll tax cut, which might not be exactly the kind of program that I would design in order to boost employment but does make a difference because it puts money in the pockets of people who are then spending it at businesses, large and small.  That gives them more customers, increases demand, and it gives businesses a greater incentive to hire.  And that would be, for example, a component of this overall package.  

        Unemployment benefits, again, puts money in the pockets of folks who are out there knocking on doors trying to find a job every day.  Giving them those resources, that puts more money into the economy and that potentially improves it -- improves the climate for businesses to want to hire.

        So as part of a component of a deal, I think it’s very important for us to look at what are the steps we can take short term in order to put folks back to work.  I am not somebody who believes that just because we solve the deficit and debt problems short term, medium term, or long term, that that automatically solves the unemployment problem.  I think we’re still going to have to do a bunch of stuff -- including, for example, trade deals that are before Congress right now that could add tens of thousands of jobs.  

        Republicans gave me this list the beginning of this year as a priority, something that they thought they could do.  Now I’m ready to do it, and so far we haven’t gotten the kind of movement that I would have expected.

        We’ve got the potential to create an infrastructure bank that could put construction workers to work right now, rebuilding our roads and our bridges and our vital infrastructure all across the country.  So those are still areas where I think we can make enormous progress.  

        I do think that if the country as a whole sees Washington act responsibly, compromises being made, the deficit and debt being dealt with for 10, 15, 20 years, that that will help with businesses feeling more confident about aggressively investing in this country, foreign investors saying America has got its act together and are willing to invest.  And so it can have a positive impact in overall growth and employment.  

        It’s not the only solution.  We’re still going to have to have a strong jobs agenda.  But it is part of a solution.  I might add it is the primary solution that the Republicans have offered when it comes to jobs.  They keep on going out there and saying, “Mr. President, what are you doing about jobs?”  And when you ask them, well, what would you do?  “We’ve got to get government spending under control and we’ve got to get our deficits under control.”  So I say, okay, let’s go.  Where are they?  I mean, this is what they claim would be the single biggest boost to business certainty and confidence.  So what's the holdup?

        With respect to Social Security, as I indicated earlier, making changes to these programs is so difficult that this may be an opportunity for us to go ahead and do something smart that strengthens Social Security and gives not just this generation but future generations the opportunity to say this thing is going to be in there for the long haul.

        Now, that may not be possible and you’re absolutely right that, as I said, Social Security is not the primary driver of our long-term deficits and debt.  On the other hand, we do want to make sure that Social Security is going to be there for the next generations, and if there is a reasonable deal to be had on it, it is one that I’m willing to pursue.

        Q    Are there things with respect to Social Security, like raising the retirement age, means testing -- are those too big a chunk for --

        THE PRESIDENT:  I’m probably not going to get into the details, Sam, right now of negotiations.  I might enjoy negotiating with you, but I don’t know how much juice you’ve got in the Republican caucus.  (Laughter.)  That’s what I figured.  

        All right, Lesley Clark.

        Q    Thank you, Mr. President.

        THE PRESIDENT: Thank you.

        Q    Have you -- you’ve talked with economists, you said that economists have agreed that a deal needs to be made.  Have you worked with new U.S. business leaders at all to lobby Congress to raise the debt ceiling?  And if so, who are you talking to?

        THE PRESIDENT: I have spoken extensively to business leaders.  And I’ll be honest with you.  I think that business leaders in the abstract want to see a resolution to this problem. What I’ve found is that they are somewhat hesitant to weigh in on some of these issues even if they’re willing to say something privately to me, partly because they’ve got a whole bunch of business pending before Congress and they don’t want to make anybody mad.

        So this is a problem of our politics and our politicians, but it’s not exclusively a problem of our politics and our politicians.  The business community is a lot like everybody else, which is we want to cut everybody else’s stuff and we want to keep our stuff.  We want to cut our taxes, but if you want to raise revenue with somebody else’s taxes, that’s okay.  And that kind of mindset is why we never get the problem solved.

        There have been business leaders, like Warren Buffet, who I think have spoken out forcefully on this issue.  I think some of the folks who participated in the Bowles-Simpson Commission made very clear that they would agree to a balanced approach even if it meant for them, individually, that they were seeing slightly higher taxes on their income, given that they’re -- I think the average CEO, if I’m not mistaken, saw a 23 percent raise this past year while the average worker saw a zero to one percent raise last year.

        So I think that there are a lot of well-meaning business people out there who recognize the need to make something happen. But I think that they’ve been hesitant to be as straightforward as I’d like when it says, this is what a balanced package means. It means that we’ve got some spending cuts; it means that we’ve got some increased revenue; and it means that we’re taking on some of the drivers of our long-term debt and deficits.

        Q    And can you say, as the clock ticks down, whether or not the administration is --

        THE PRESIDENT: I’m sorry --

        Q    Can you say, as the clock ticks down, whether or not the administration is working on any sort of contingency plans if things don’t happen by August?

        THE PRESIDENT: We are going to get this done by August 2nd.  
        George Condon.

        Q    Mr. President, to follow on Chip’s question, you said that the Speaker faces tough politics in his caucus.  Do you have complete confidence that he can deliver the votes on anything that he agrees to?  Is he in control of his caucus?

        THE PRESIDENT: That’s a question for the Speaker, not a question for me.  My experience with John Boehner has been good. I think he’s a good man who wants to do right by the country.  I think that it’s a -- as Chip alluded to, the politics that swept him into the speakership were good for a midterm election; they’re tough for governing.  And part of what the Republican caucus generally needs to recognize is that American democracy works when people listen to each other, we’re willing to give each other the benefit of the doubt, we assume the patriotism and good intentions of the other side, and we’re willing to make some sensible compromises to solve big problems.  And I think that there are members of that caucus who haven’t fully arrived at that realization yet.

        Q    So your confidence in him wasn’t shaken by him walking away from the big deal he said he wanted?

        THE PRESIDENT:  These things are a tough process.  And, look, in fairness, a big deal would require a lot of work on the part of Harry Reid and Nancy Pelosi and myself to bring Democrats along.  But the point is, is if everybody gets in the boat at the same time, it doesn’t tip over.  I think that was Bob Dole’s famous comment after striking a deal with the President and Mr. Gingrich back in the ‘90s.  And that is always the case when it comes to difficult but important tasks like this.

        Last question.  April Ryan.

        Q    Mr. President, hi.  I want to revisit the issue of sacrifice.  In 2009, you said that -- expect the worst to come; we have not seen the worst yet.  And now with these budget cuts looming, you have minorities, the poor, the elderly, as well as people who are scared of losing jobs fearful.  And also, what say you about Congressman Chaka Fattah’s bill, the Debt Free America Act?  Do you support that bill?  Are you supporting the Republican bill that is similar to his, modeled after Congressman Fattah’s bill?

        THE PRESIDENT:  Well, I’m not going to comment on a particular bill right now.  Let me speak to the broader point that you’re asking about, April.  

        This recession has been hard on everybody, but obviously it’s harder on folks who've got less.  And the thing that I am obsessed with, and have been since I came into office, is all those families out there who are doing the right thing every single day, who are looking after their families, who are just struggling to keep up, and just feel like they’re falling behind, no matter how hard they work.  

        I got a letter this past week from a woman who -- her husband had lost his job, had pounded the pavement, finally found a job.  They felt like things were stabilizing for a few months. Six months later he lost his second job.  Now they’re back looking again and trying to figure out how they are going to make ends meet.  And there are just hundreds of thousands of folks out there who really have seen as tough of an economy as we’ve seen in our lifetimes.  

        Now, we took very aggressive steps when I first came into office to yank the economy out of a potential Great Depression and stabilize it.  And we were largely successful in stabilizing it.  But we stabilized it at a level where unemployment is still too high and the economy is not growing fast enough to make up for all the jobs that were lost before I took office and the few months after I took office.

        So this unemployment rate has been really stubborn.  There are a couple of ways that we can solve that.  Number one is to make sure that the overall economy is growing.  And so we have continued to take a series of steps to make sure that there’s money in people’s pockets that they can go out there and spend.  That’s what these payroll tax cuts were about.  

        We’ve taken a number of steps to make sure that businesses are willing to invest, and that’s what the small business tax cuts and some of the tax breaks for companies that are willing to invest in plants and equipment -- and zero capital gains for small businesses -- that’s what that was all about, was giving businesses more incentive to invest.

        We have worked to make sure that the training programs that are out there for folks who are having to shift from jobs that may not exist anymore so that they can get the training they need for the jobs that do exist, that those are improved and sharpened.  

        We have put forward a series of proposals to make sure that regulations that may be unnecessary and are hampering some businesses from investing, that we are examining all of those for their cost and their benefits.  And if they are not providing the kind of benefits in terms of the public health, and clean air and clean water, and worker safety that have been promised, then we should get rid of some of those regulations.  

        So we’ve been looking at the whole menu of steps that can be taken.  We are now in a situation where because the economy has moved slower than we wanted, because of the deficits and debt that result from the recession and the crisis, that taking a approach that costs trillions of dollars is not an option.  We don’t have that kind of money right now.  

        What we can do is to solve this underlying debt and deficit problem for a long period of time so that then we can get back to having a conversation about, all right, since we now have solved this problem, that’s not -- no longer what’s hampering economic growth, that’s not feeding business and uncertainty, everybody feels that the ground is stable under our feet, are there some strategies that we could pursue that would really focus on some targeted job growth -- infrastructure being a primary example.

        I mean, the infrastructure bank that we’ve proposed is relatively small.  But could we imagine a project where we’re rebuilding roads and bridges and ports and schools and broadband lines and smart grids, and taking all those construction workers and putting them to work right now?  I can imagine a very aggressive program like that that I think the American people would rally around and would be good for the economy not just next year or the year after, but for the next 20 or 30 years.  

        But we can’t even have that conversation if people feel as if we don't have our fiscal house in order.  So the idea here is let’s act now.  Let’s get this problem off the table.  And then with some firm footing, with a solid fiscal situation, we will then be in a position to make the kind of investments that I think are going to be necessary to win the future.

        So this is not a right or left, conservative-liberal situation.  This is how do we operate in a smart way, understanding that we’ve got some short-term challenges and some long-term challenges.  If we can solve some of those long-term challenges, that frees up some of our energies to be able to deal with some of these short-term ones, as well.

        All right?  Thank you very much, everybody.

END 11:54 A.M. EDT

Remarks by the President on the Status of Efforts to Find a Balanced Approach to Deficit Reduction

James S. Brady Press Briefing Room

1:02 P.M. EDT

        THE PRESIDENT:  Hello, everybody.  I’m going to make a very brief statement.

        I just completed a meeting with all the congressional leaders from both chambers, from both parties, and I have to say that I thought it was a very constructive meeting.  People were frank.  We discussed the various options available to us.  Everybody reconfirmed the importance of completing our work and raising the debt limit ceiling so that the full faith and credit of the United States of America is not impaired.

        What we decided was that staffs, as well as leadership, will be working during the weekend, and that I will reconvene congressional leaders here on Sunday with the expectation that, at that point, the parties will at least know where each other’s bottom lines are and will hopefully be in a position to then start engaging in the hard bargaining that’s necessary to get a deal done.

        I want to emphasize that nothing is agreed to until everything is agreed to.  And the parties are still far apart on a wide range of issues.  But, again, I thought that all the leaders here came in a spirit of compromise, in a spirit of wanting to solve problems on behalf of the American people.  Everybody acknowledged that the issue of our debt and our deficit is something that needs to be tackled now.  Everybody acknowledged that in order to do that, Democrats and Republicans are going to be required in each chamber.  Everybody acknowledged that we have to get this done before the hard deadline of August 2nd to make sure that America does not default for the first time on its obligations.  And everybody acknowledged that there’s going to be pain involved politically on all sides, but our biggest obligation is to make sure that we’re doing the right thing by the American people, creating an environment in which we can grow the economy and make sure that more and more people are being put back to work.

        So I want to thank all the leaders.  I thought it was a very constructive meeting.  And I will be seeing them back here on Sunday.  A lot of work will be done between now and then.

END 1:05 P.M. EDT