Statement by the President

Rose Garden

1:06 P.M. EDT

THE PRESIDENT:  Good afternoon, everybody.  Congress has now approved a compromise to reduce the deficit and avert a default that would have devastated our economy.  It was a long and contentious debate.  And I want to thank the American people for keeping up the pressure on their elected officials to put politics aside and work together for the good of the country. 

This compromise guarantees more than $2 trillion in deficit reduction.  It’s an important first step to ensuring that as a nation we live within our means.  Yet it also allows us to keep making key investments in things like education and research that lead to new jobs, and assures that we’re not cutting too abruptly while the economy is still fragile. 

This is, however, just the first step.  This compromise requires that both parties work together on a larger plan to cut the deficit, which is important for the long-term health of our economy.  And since you can’t close the deficit with just spending cuts, we’ll need a balanced approach where everything is on the table.  Yes, that means making some adjustments to protect health care programs like Medicare so they’re there for future generations.  It also means reforming our tax code so that the wealthiest Americans and biggest corporations pay their fair share.  And it means getting rid of taxpayer subsidies to oil and gas companies, and tax loopholes that help billionaires pay a lower tax rate than teachers and nurses. 

I’ve said it before; I will say it again:  We can’t balance the budget on the backs of the very people who have borne the biggest brunt of this recession.  We can’t make it tougher for young people to go to college, or ask seniors to pay more for health care, or ask scientists to give up on promising medical research because we couldn’t close a tax shelter for the most fortunate among us.  Everyone is going to have to chip in.  It’s only fair.  That’s the principle I’ll be fighting for during the next phase of this process.   

And in the coming months, I’ll continue also to fight for what the American people care most about:  new jobs, higher wages and faster economic growth.  While Washington has been absorbed in this debate about deficits, people across the country are asking what we can do to help the father looking for work.  What are we going to do for the single mom who’s seen her hours cut back at the hospital?  What are we going to do to make it easier for businesses to put up that “now hiring” sign? 

That’s part of the reason that people are so frustrated with what’s been going on in this town.  In the last few months, the economy has already had to absorb an earthquake in Japan, the economic headwinds coming from Europe, the Arab Spring and the [rise] in oil prices -- all of which have been very challenging for the recovery.  But these are things we couldn’t control.  Our economy didn’t need Washington to come along with a manufactured crisis to make things worse.  That was in our hands.  It’s pretty likely that the uncertainty surrounding the raising of the debt ceiling -- for both businesses and consumers -- has been unsettling, and just one more impediment to the full recovery that we need.  And it was something that we could have avoided entirely.

So, voters may have chosen divided government, but they sure didn’t vote for dysfunctional government.  They want us to solve problems.  They want us to get this economy growing and adding jobs.  And while deficit reduction is part of that agenda, it is not the whole agenda.  Growing the economy isn’t just about cutting spending; it’s not about rolling back regulations that protect our air and our water and keep our people safe.  That’s not how we’re going to get past this recession.  We’re going to have to do more than that.

And that’s why, when Congress gets back from recess, I will urge them to immediately take some steps -- bipartisan, common-sense steps -- that will make a difference; that will create a climate where businesses can hire, where folks have more money in their pockets to spend, where people who are out of work can find good jobs.

We need to begin by extending tax cuts for middle-class families so that you have more money in your paychecks next year.  If you’ve got more money in your paycheck, you’re more likely to spend it.  And that means small businesses and medium-sized businesses and large businesses will all have more customers.  That means they’ll be in a better position to hire. 

And while we’re at it, we need to make sure that millions of workers who are still pounding the pavement looking for jobs to support their families are not denied needed unemployment benefits.

Through patent reform, we can cut the red tape that stops too many inventors and entrepreneurs from quickly turning new ideas into thriving businesses -- which holds our whole economy back.  And I want Congress to pass a set of trade deals -- deals we’ve already negotiated -- that would help displaced workers looking for new jobs and would allow our businesses to sell more products in countries in Asia and South America, products that are stamped with the words “Made in America.”

We also need to give more opportunities to all those construction workers out there who lost their jobs when the housing boom went bust.  We could put them to work right now, by giving loans to private companies that want to repair our roads and our bridges and our airports, rebuilding our infrastructure.  We have workers who need jobs and a country that needs rebuilding; an infrastructure bank would help us put them together. 

And while we’re on the topic of infrastructure, there’s another stalemate in Congress right now involving our aviation industry which has stalled airport construction projects all around the country and put the jobs of tens of thousands of construction workers and others at risk -– because of politics.  It’s another Washington-inflicted wound on America, and Congress needs to break that impasse now –- hopefully before the Senate adjourns -– so these folks can get back to work.

So these are some things that we could be doing right now.  There’s no reason for Congress not to send me those bills so I can sign them into law right away as soon as they get back from recess.  Both parties share power in Washington, and both parties need to take responsibility for improving this economy.  It’s not a Democratic responsibility or a Republican responsibility; it is our collective responsibility as Americans.  And I’ll be discussing additional ideas in the weeks ahead to help companies hire, invest and expand.

So, we’ve seen in the past few days that Washington has the ability to focus when there’s a timer ticking down, and when there’s a looming disaster.  It shouldn’t take the risk of default -– the risk of economic catastrophe -– to get folks in this town to work together and do their jobs.  Because there’s already a quiet crisis going on in the lives of a lot of families, in a lot of communities, all across the country.  They’re looking for work, and they have been for a while; or they’re making do with fewer hours or fewer customers; or they’re just trying to make ends meet.  That ought to compel Washington to cooperate.  That ought to compel Washington to compromise, and it ought to compel Washington to act.  That ought to be enough to get all of us in this town to do the jobs we were sent here to do.  We’ve got to do everything in our power to grow this economy and put America back to work.  That’s what I intend to do, and I’m looking forward to working with Congress to make it happen.

Thanks very much, everybody.

END 1:14 P.M. EDT

Readout of the President’s meeting with U.S. Ambassador to Syria Robert Ford

The President took the opportunity today to consult with U.S. Ambassador to Syria Robert Ford, who is in Washington D.C. for meetings with the Senate and key Administration officials.  The President thanked Ambassador Ford for his extraordinary service to the American people at a very challenging time in Syria. The President also reiterated his strong condemnation of the Syrian regime’s outrageous use of violence against its own people, and reaffirmed America’s support for the courageous Syrian people, and their demands for universal rights and a democratic transition.

A photo of the meeting can be viewed here.

Fact Sheet: Bipartisan Debt Deal: A Win for the Economy and Budget Discipline

BIPARTISAN DEBT DEAL: A WIN FOR THE ECONOMY AND BUDGET DISCIPLINE

The debt deal announced today is a victory for bipartisan compromise, for the economy and for the American people. The agreement:

• Removes the cloud of uncertainty over our economy at this critical time, by ensuring that no one will be able to use the threat of the nation’s first default now, or in only a few months, for political gain;
• Locks in a down payment on significant deficit reduction, with savings from both domestic and Pentagon spending, and is designed to protect crucial investments like aid for college students;
• Establishes a bipartisan process to seek a balanced approach to larger deficit reduction through entitlement and tax reform;
• Deploys an enforcement mechanism that gives all sides an incentive to reach bipartisan compromise on historic deficit reduction, while protecting Social Security, Medicare beneficiaries and low-income programs;
• Stays true to the President’s commitment to shared sacrifice by preventing the middle class, seniors and those who are most vulnerable from shouldering the burden of deficit reduction. The President did not agree to any entitlement reforms outside of the context of a bipartisan committee process where tax reform will be on the table and the President will insist on shared sacrifice from the most well-off and those with the most indefensible tax breaks.

Mechanics of the Debt Deal

• Immediately enacted 10-year discretionary spending caps generating nearly $1 trillion in deficit reduction; balanced between defense and non-defense spending.
• President authorized to increase the debt limit by at least $2.1 trillion, eliminating the need for further increases until 2013.  
• Bipartisan committee process tasked with identifying an additional $1.5 trillion in deficit reduction, including from entitlement and tax reform. Committee is required to report legislation by November 23, 2011, which receives fast-track protections. Congress is required to vote on Committee recommendations by December 23, 2011.
• Enforcement mechanism established to force all parties – Republican and Democrat – to agree to balanced deficit reduction. If Committee fails, enforcement mechanism will trigger spending reductions beginning in 2013 – split 50/50 between domestic and defense spending. Enforcement protects Social Security, Medicare beneficiaries, and low-income programs from any cuts.    

1. REMOVING UNCERTAINTY TO SUPPORT THE AMERICAN ECONOMY

• Deal Removes Cloud of Uncertainty Until 2013, Eliminating Key Headwind on the Economy: Independent analysts, economists, and ratings agencies have all made clear that a short-term debt limit increase would create unacceptable economic uncertainty by risking default again within only a matter of months and as S&P stated, increase the chance of a downgrade. By ensuring a debt limit increase of at least $2.1 trillion, this deal removes the specter of default, providing important certainty to our economy at a fragile moment.
• Mechanism to Ensure Further Deficit Reduction is Designed to Phase-In Beginning in 2013 to Avoid Harming the Recovery: The deal includes a mechanism to ensure additional deficit reduction, consistent with the economic recovery. The enforcement mechanism would not be made effective until 2013, avoiding any immediate contraction that could harm the recovery. And savings from the down payment will be enacted over 10 years, consistent with supporting the economic recovery.

2. A DOWNPAYMENT ON DEFICIT REDUCTION BY LOCKING IN HISTORIC SPENDING DISCIPLINE – BALANCED BETWEEN DOMESTIC AND PENTAGON SPENDING

• More than $900 Billion in Savings over 10 Years By Capping Discretionary Spending: The deal includes caps on discretionary spending that will produce more than $900 billion in savings over the next 10 years compared to the CBO March baseline, even as it protects core investments from deep and economically damaging cuts.
• Includes Savings of $350 Billion from the Base Defense Budget – the First Defense Cut Since the 1990s: The deal puts us on track to cut $350 billion from the defense budget over 10 years. These reductions will be implemented based on the outcome of a review of our missions, roles, and capabilities that will reflect the President’s commitment to protecting our national security.
• Reduces Domestic Discretionary Spending to the Lowest Level Since Eisenhower: These discretionary caps will put us on track to reduce non-defense discretionary spending to its lowest level since Dwight Eisenhower was President.
• Includes Funding to Protect the President’s Historic Investment in Pell Grants: Since taking office, the President has increased the maximum Pell award by $819 to a maximum award $5,550, helping over 9 million students pay for college tuition bills. The deal provides specific protection in the discretionary budget to ensure that the there will be sufficient funding for the President’s historic investment in Pell Grants without undermining other critical investments.

3. ESTABLISHING A BIPARTISAN PROCESS TO ACHIEVE $1.5 TRILLION IN ADDITIONAL BALANCED DEFICIT REDUCTION BY THE END OF 2011

• The Deal Locks in a Process to Enact $1.5 Trillion in Additional Deficit Reduction Through a Bipartisan, Bicameral Congressional Committee: The deal creates a bipartisan, bicameral Congressional Committee that is charged with enacting $1.5 trillion in additional deficit reduction by the end of the year. This Committee will work without the looming specter of default, ensuring time to carefully consider essential reforms without the disruption and brinksmanship of the past few months.
• This Committee is Empowered Beyond Previous Bipartisan Attempts at Deficit Reduction: Any recommendation of the Committee would be given fast-track privilege in the House and Senate, assuring it of an up or down vote and preventing some from using procedural gimmicks to block action.
• To Meet This Target, the Committee Will Consider Responsible Entitlement and Tax Reform. This means putting all the priorities of both parties on the table – including both entitlement reform and revenue-raising tax reform.

4. A STRONG ENFORCEMENT MECHANISM TO MAKE ALL SIDES COME TOGETHER

• The Deal Includes An Automatic Sequester to Ensure That At Least $1.2 Trillion in Deficit Reduction Is Achieved By 2013 Beyond the Discretionary Caps: The deal includes an automatic sequester on certain spending programs to ensure that—between the Committee and the trigger—we at least put in place an additional $1.2 trillion in deficit reduction by 2013.
• Consistent With Past Practice, Sequester Would Be Divided Equally Between Defense and Non-Defense Programs and Exempt Social Security, Medicaid, and Low-Income Programs: Consistent with the bipartisan precedents established in the 1980s and 1990s, the sequester would be divided equally between defense and non-defense program, and it would exempt Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. Likewise, any cuts to Medicare would be capped and limited to the provider side.
• Sequester Would Provide a Strong Incentive for Both Sides to Come to the Table:  If the fiscal committee took no action, the deal would automatically add nearly $500 billion in defense cuts on top of cuts already made, and, at the same time, it would cut critical programs like infrastructure or education.  That outcome would be unacceptable to many Republicans and Democrats alike – creating pressure for a bipartisan agreement without requiring the threat of a default with unthinkable consequences for our economy.

5. A BALANCED DEAL CONSISTENT WITH THE PRESIDENT’S COMMITMENT TO SHARED SACRIFICE

• The Deal Sets the Stage for Balanced Deficit Reduction, Consistent with the President’s Values: The deal is designed to achieve balanced deficit reduction, consistent with the values the President articulated in his April Fiscal Framework. The discretionary savings are spread between both domestic and defense spending. And the President will demand that the Committee pursue a balanced deficit reduction package, where any entitlement reforms are coupled with revenue-raising tax reform that asks for the most fortunate Americans to sacrifice. 
• The Enforcement Mechanism Complements the Forcing Event Already In Law – the Expiration of the Bush Tax Cuts – To Create Pressure for a Balanced Deal: The Bush tax cuts expire as of 1/1/2013, the same date that the spending sequester would go into effect. These two events together will force balanced deficit reduction. Absent a balanced deal, it would enable the President to use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts.
• In Securing this Bipartisan Deal, the President Rejected Proposals that Would Have Placed the Sole Burden of Deficit Reduction on Low-Income or Middle-Class Families: The President stood firmly against proposals that would have placed the sole burden of deficit reduction on lower-income and middle-class families. This includes not only proposals in the House Republican Budget that would have undermined the core commitments of Medicare to our seniors and forced tens of millions of low-income Americans to go without health insurance, but also enforcement mechanisms that would have forced automatic cuts to low-income programs. The enforcement mechanism in the deal exempts Social Security, Medicaid, Medicare benefits, unemployment insurance, programs for low-income families, and civilian and military retirement.

WEEKLY ADDRESS: Acting Responsibly on Behalf of the American People

WASHINGTON—In this week’s address, President Obama urged both Republicans and Democrats to take action to avoid defaulting for the first time in our nation’s history.  While the two parties are not far apart in their goals, they must resolve their differences quickly so that the United States can continue paying its Social Security checks, veterans’ benefits, and contracts with thousands of American businesses.  The time has come to stop endangering the Triple A bond rating of the United States, put aside partisan politics, and behave responsibly to ensure a balanced approach to reducing our nation’s deficit. 

Remarks of President Barack Obama
Weekly Address
Saturday, July 30, 2011
Washington, DC

Today, I’d like to speak with you about the ongoing and urgent efforts to avoid a first-ever default and get our fiscal house in order.

Republicans in the House of Representatives just spent precious days trying to pass a plan that a majority of Republicans and Democrats in the Senate had already said they wouldn’t vote for.  It’s a plan that wouldn’t solve our fiscal problems, but would force us to re-live this crisis in just a few short months.  It would hold our economy captive to Washington politics once again.  If anything, the past few weeks have demonstrated that’s unacceptable. 

Any solution to avoid default must be bipartisan.  It must have the support of both parties that were sent here to represent the American people – not just one faction of one party.  There are multiple ways to resolve this problem.  Congress must find common ground on a plan that can get support from both parties in the House.  And it’s got to be a plan that I can sign by Tuesday.

Look, the parties are not that far apart here.  We’re in rough agreement on how much spending we need to cut to reduce our deficit.  We agree on a process to tackle tax reform and entitlement reform.  There are plenty of ways out of this mess.  But there is very little time. 

We need to reach a compromise by Tuesday so that our country will have the ability to pay its bills on time – bills like Social Security checks, veterans’ benefits, and contracts we’ve signed with thousands of American businesses.  If we don’t, for the first time ever, we could lose our country’s Triple A credit rating.  Not because we didn’t have the capacity to pay our bills – we do – but because we didn’t have a Triple A political system to match it.  And make no mistake – for those who reflexively oppose tax increases on anyone, a lower credit rating would be a tax increase on everyone – we’d pay higher interest rates on mortgages, car loans, and credit cards.

That would be inexcusable, and entirely self-inflicted by Washington.  The power to solve this is in our hands.  All that’s needed is a simple vote that Democrats and Republicans have taken for decades, including all of the leaders in Congress today.  It was done 18 times under President Reagan.  7 times under George W. Bush.  And it must be done again now.  It’s not a vote that allows Congress to spend more money.  Raising the debt ceiling simply gives our country the ability to pay the bills Congress has already racked up.  It gives the United States of America the ability to keep its word.  And it will let businesses and our economy breathe a sigh of relief.

On Monday night, I asked you to make your voice heard in this debate.  And the response was overwhelming.  One of the emails we received was from a woman named Kelly Smith, who wanted to send this message to Washington:

“I keep my home clean, work hard at a full time job, give my parents any monies I can so they can afford their medications, I pay my bills and by all appearances I am a responsible person.  All I’m asking is that you be responsible.  I have my house in order and all I’m asking is that you get yours the same way.”

Here in Washington, we need to get our house in order.  And I have to say, Democrats in Congress and some Senate Republicans have been listening and have shown themselves willing to make compromises to solve this crisis.  Now all of us – including Republicans in the House of Representatives – need to demonstrate the same kind of responsibility that the American people show every day.  The time for putting party first is over.  The time for compromise on behalf of the American people is now.  Thank you.