Entries in Deficit (74)


Debt Group Pans White House Call for ‘Petit Bargain’

Image Source/Getty Images(WASHINGTON) -- As the sequester spending cuts begin to take effect, the White House Monday pointed to one potential silver lining: significant progress in the battle to tame the nation’s deficit and debt.

“The ‘big deal’ has been partly accomplished,” declared White House spokesman Jay Carney, when asked whether President Obama still had hopes for a sweeping deficit reduction compromise with Republicans.

Indeed, Obama and Congress have already signed into law roughly $2.5 trillion in savings over the next decade, including the so-called $1.2 trillion sequester cuts, more than $600 billion in new tax revenue and $400 billion in interest savings.

It’s more than halfway to the $4 trillion goal set out by Obama’s fiscal commission and embraced by both parties in August 2010.

So, what’s left to be done?  “It may be the ‘petit bargain,’ I guess,” Carney joked Monday. “If you, you know, go all French.”

Enter a prominent bipartisan group of debt and deficit experts, who aren’t laughing.

“If they won’t go big, we shouldn’t go petit,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, told ABC News.  ”At least we could go medium.”

MacGuineas, who also heads the Fix the Debt campaign co-founded by Obama fiscal commission chairmen Erskine Bowles and Alan Simpson, said in the two years since policymakers set their $4 trillion goal things have gotten worse.

The magic number to trim is now closer to $6.5 trillion over a decade, she said.

“It’s jaw-dropping. It’s a painful reaction of when you wait to take action, the costs go up,” MacGuineas said. “That’s the amount of cuts it would take to bring us to the same level, putting our debt on a downward path.”

More sobering:  There’s little sign Obama and Congress will compromise to address the biggest drivers of U.S. debt.

“They haven’t done any of the tough stuff, any of the important stuff, they haven’t reformed the tax code,” Bowles told ABC News’ Jonathan Karl last month. “They haven’t done anything to slow the rate of health care to the rate of growth of the economy, they haven’t made Social Security sustainably solvent.”

Obama says he has a plan on the table to trim an additional $1.8 trillion from the deficit over the next decade through a combination of tax code reforms and changes to entitlement programs.  Experts say it would be a step forward but not nearly enough to celebrate.

“We support any plan that’s big enough to fix the problem. His plan isn’t,” MacGuineas said. “But you could super-size it.”

Copyright 2013 ABC News Radio


Simpson and Bowles Keep Pushing with New Deficit Plan

Andrew Harrer/Bloomberg via Getty Images(WASHINGTON) -- Alan Simpson and Erskine Bowles are at it again.

Their broad deficit-reduction proposal failed to catch on following its release in December 2010, but the two have remained vocal about the nation's fiscal future.  In a recent op-ed published by Politico, they called the recent, year-end tax deal "pitiful," and urged serious, long-term reforms.

On Tuesday morning, they're pushing a re-hashed plan to slow the nation's debt growth and put it on a more stable path, essentially fitting their old plan into a new timeline and pushing leaders in Washington, D.C., to adopt a piecemeal approach to fiscal reform. Taking into account actions that Congress and President Obama have taken in the last two years, Simpson and Bowles say tax and spending reforms don't have to happen all at once.

Counting the 2011 budget talks and the recent tax deal as steps one and two, Simpson and Bowles issued a call for two more big steps -- which include measures like lowering the growth of Medicare and Medicaid payments to providers; lowering drug costs; enacting Social Security reforms; adopting a "chained CPI" to reduce the growth of Social Security payments and other spending tied to inflation; and reforming the tax code.

Those proposals (or, at the very least, proposals like them) were included in the original plan approved by Obama's fiscal commission, which Simpson and Bowles led.  That plan offered more specifics on how to achieve the goals laid out by Simpson and Bowles Tuesday morning.

Most of these remaining steps should happen in the next two years, according to Simpson and Bowles' timeline.

"There is no perfect solution to our fiscal problems," the two wrote, introducing the new plan.  "However, we believe strongly and sincerely that an agreement on a comprehensive plan to bring our debt under control is possible if both sides are able to put their sacred cows on the table in the spirit of principled compromised."

They also took Congress and Obama to task once again for the year-end tax deal, blasting it for leaving in place "the abrupt, mindless, and across-the-board spending cuts of the sequester."

Here is the list Simpson and Bowles released to reporters, detailing their plan:

Step 3: Enact Serious Tax and Entitlement Reforms and Cut Additional Spending (~$2.4 trillion)

  • Reduce Medicare and Medicaid spending by improving provider and beneficiary incentives throughout the health care system, reducing provider payments, reforming cost-sharing, increasing premiums for higher earners, adjusting benefits to account for population aging, reducing drug costs, and getting better value for our health care dollars (Feb-Dec 2013)
  • Enact comprehensive, pro-growth tax reform that eliminates or scales back most tax expenditures, with a portion of the savings dedicated to deficit reduction and the rest used to reduce rates and simplify the tax code (Feb-Dec 2013)
  • Strengthen limits on discretionary spending (Feb-Dec 2013)
  • Reduce non-health mandatory spending by reforming farm subsidies, modernizing civilian and military health and retirement programs, imposing various user fees, reforming higher education spending, and making other changes (Feb-Dec 2013)
  • Adopt chained CPI for indexing and achieve savings from program integrity (Feb-Dec 2013)

Step 4: Make Social Security and Highway Funding Solvent and Medicare Sustainable

  • Require reforms on a separate track to make Social Security sustainably solvent (2013)
  • Require a highway bill to bring transportation spending and revenues in line (2014)
  • Require additional reforms of federal health care programs if necessary to limit the growth of the per beneficiary federal health commitment to close to GDP growth (2018)

Copyright 2013 ABC News Radio


Sen. Mitch McConnell: “The Tax Issue Is Finished”

Tom Williams/CQ Roll Call(WASHINGTON) -- Senate Republican Leader Mitch McConnell, R-Ky., said Sunday he will not accept any new revenue in future deals with congressional Democrats and President Obama.

“The tax issue is finished.  Over. Completed,” McConnell said on “This Week.” “That’s behind us. Now the question is what are we going to do about the biggest problem confronting our country and that’s our spending addiction.

“We didn’t have this problem because we weren’t taxing enough,” McConnell added.

He blamed Obama and Democrats for waiting to resolve budget issues until the last minute.

 “Why we end up in these last-minute discussions is beyond me. We need to function,” McConnell said. “I mean, the House of Representatives, for example, passed a budget every year.  They’ve passed appropriation bills.

“The Senate Democratic majority and the president seem to like these last-minute deals.”

McConnell said that the biggest issue facing the country in the next year is the deficit and spending. And he predicted that the issue would occupy the congressional agenda in the first three months of the year, overtaking Obama’s other priorities, including gun control.

“But the biggest problem we have at the moment is spending and debt,” McConnell said. “That’s going to dominate the Congress between now and the end of March.  None of these issues, I think, will have the kind of priority that spending and debt are going to have over the next two or three months.”

On the expected nomination of former Sen. Chuck Hagel, R-Neb., as the secretary of Defense by Obama, McConnell said he would evaluate Hagel’s past statements before determining whether he could support his nomination in the Senate.

“I’m going to take a look at all the things that Chuck has said over the years and review that, and in terms of his qualifications to lead our nation’s military,” McConnell said. “The question we will be answering if he’s the nominee, is do his views make sense for that particular job?  I think he ought to be given a fair hearing, like any other nominee, and he will be.”

McConnell, who in 2008 praised Hagel for his clear voice and stature on foreign policy and national security, now says he will reserve judgment on his possible nomination until after a Senate confirmation hearing.

“I’m going to wait and see how the hearings go and see whether Chuck’s views square with the job he would be nominated to do,” he added.

Copyright 2013 ABC News Radio


Deficit Deal Tops Obama's Day-One Agenda

Chip Somodevilla/Getty Images(CHICAGO) -- He won a second term by a narrower margin than he won his first, but President Obama believes his victory Tuesday night delivered a mandate that will reinvigorate his stalled legislative agenda and resolve a partisan impasse over taxes.

Obama will waste little time putting his perceived new influence to the test, aides say, making negotiations over expiring tax cuts, looming spending cuts and deficit reduction his immediate priority after the electoral smoke clears.

A double dose of deep reductions to defense and social spending, plus across-the-board tax hikes for all Americans, will automatically kick in 54 days from now unless Obama can broker a deal.

"First thing we're going to have to do is to, once and for all, determine how we're going to reduce our deficit and our debt coming out of this terrible crisis we've had now that the economy has begun to grow again, we're adding jobs again," Obama told a local Des Moines, Iowa, TV affiliate on Tuesday.

"If we can get that done early, then my sense is not only will the economy grow and see more jobs added, but I think it will take a lot of the rancor out of our politics," he said.

But despite that sanguine view, there are signs that a compromise on taxes with Republicans -- who retained majority control of the House of Representatives -- won't come easily.

Obama remains insistent that existing tax cuts on individuals earning more than $200,000 a year and families making more than $250,000 should expire on Jan. 1, 2013.  Republicans remain staunchly opposed to any increase in taxes.

"We're not raising taxes on small-business people," House Speaker John Boehner told Politico in an interview on the eve of the vote.

After it became clear Obama would win the election, Boehner released a statement pointing out that Republicans held onto the House of Representatives.

"If there is a mandate, it is a mandate for both parties to find common ground and take steps together to help our economy grow and create jobs, which is critical to solving our debt," Boehner said early Wednesday morning.

Finding that common ground will be difficult since both men have made such specific declarations about taxes.  They tried -- and failed -- to achieve a "grand bargain" to reduce the deficit in 2011.  Through a complicated legal agreement, that failure is what led to the automatic spending cuts and tax hikes Boehner and Obama will now have to work quickly before the end of the year to avoid.

Wasting no time, Boehner has scheduled a press conference to discuss the fiscal cliff on Capitol Hill Wednesday afternoon.

However the fiscal debate is resolved will largely set the tone for a raft of domestic policy debates to follow.

Obama has said he plans a big push for a comprehensive immigration reform bill, a stimulus package for states to help hire public school teachers, and a massive infrastructure upgrade that he says will provide jobs to thousands of construction workers.

He has also signaled plans to consolidate progress on financial regulatory and health care reform by more aggressively implementing the outstanding provisions of the Wall Street reform law and Obamacare.

Obama is expected to navigate the new dynamic with a largely stable team of senior aides and cabinet secretaries, though he will have to recruit and nominate some new members.

He has already begun to take stock of who's planning to leave the administration and who would like to stay, aides say.  In the next few weeks, he will begin examining resumes of possible replacements for top officials, including Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner.

Copyright 2012 ABC News Radio


After 5 Trillion Added to Debt, Obama Ad Claims Romney Is a Deficit-Driver

ABC/ Ida Mae Astute(CHICAGO) -- President Obama has presided over three consecutive years of historically high federal budget deficits and the addition of more than $5 trillion to the national debt.

Yet, that didn't stop his campaign from launching a new television ad in which Obama casts himself as the only candidate for president with a plan to narrow the budget gap, while suggesting GOP rival Mitt Romney would make deficits worse.

The 30-second spot -- titled “Worried” -- suggests that Romney’s call for new tax cuts for wealthier Americans and increased military spending will increase the deficit the way George W. Bush did.

“You watched … and worried. Two wars. Tax cuts for millionaires. Debt piled up,” the narrator says, over images of the Bush era. “Now we face a choice.”

The ad says Obama wants to reduce the deficit by having, “millionaires pay a little more” in higher taxes.

The ad is the latest in a series from the Obama campaign running in battleground states aimed at drawing contrasts between the dueling candidates on economic and social issues.

“President Obama’s plans to raise taxes on small businesses and make drastic cuts to our military are the wrong approach for America,” said Romney campaign spokesman Ryan Williams. “President Obama’s tax hikes are the last thing we need in a struggling economy.”

Obama insists the wealthy can foot the higher bill and without dampening economic growth -- a message he will take on the road to Ohio on Wednesday and Florida and Virginia on Thursday.

The new TV ad -- which his critics will likely dismiss as more examples of what they see as the president's go-to strategy, blaming others for the state of the economy -- begins airing Tuesday in Colorado, Iowa, New Hampshire, Nevada, Ohio and Florida.

Copyright 2012 ABC News Radio


President Obama Denounces GOP ‘Wild Debts’: I’m Not an Over-Spender

Alex Wong/Getty Images(COLORADO SPRINGS, Colo.) -- At a fundraiser for his re-election campaign in Denver Wednesday night, President Obama set out to upend conventional Republican wisdom that his administration has been defined by excessive government spending.

“I’m running to pay down our debt in a way that’s balanced and responsible. After inheriting a $1 trillion deficit, I signed $2 trillion of spending cuts into law,” he told a crowd of donors at the Hyatt Regency. “My opponent won’t admit it, but it’s starting to appear in places, like real liberal outlets, like the Wall Street Journal: Since I’ve been president, federal spending has risen at the lowest pace in nearly 60 years. Think about that.”

Obama was referring to an analysis released this week by Rex Nutting, a reporter for CBS MarketWatch who is also affiliated with the Wall Street Journal. Nutting concluded that Obama has presided over the slowest growth in federal spending in decades.

“Government spending under Obama, including his signature stimulus bill, is rising at a 1.4 percent annualized pace -- slower than at any time in nearly 60 years,” Nutting wrote, citing data from the Congressional Budget Office, Office of Management and Budget and an independent financial firm.

“The big surge in federal spending happened in fiscal 2009, before Obama took office. Since then, spending growth has been relatively flat,” he wrote. “Over Obama’s four budget years, federal spending is on track to rise from $3.52 trillion to $3.58 trillion, an annualized increase of just 0.4 percent. There has been no huge increase in spending under the current president, despite what you hear.”

The Obama campaign circulated Nutting’s article by email and posted it on its website Tuesday.  The president picked up on the theme again Wednesday to hammer the point home.

“I just point out it always goes up least under Democratic presidents. This other side, I don’t know how they’ve been bamboozling folks into thinking that they are the responsible, fiscally-disciplined party. They run up these wild debts and then when we take over, we’ve got to clean it up.

“They point and say look how irresponsible they are. Look at the facts, look at the numbers. And now I want to finish the job -- in a balanced way,” he said, referring to his plan to reduce the deficit through a combination of spending cuts and tax hikes.

The Romney campaign noted that more than $5 trillion has been added to the debt during Obama’s first term, though in 2008 Obama called the $4 trillion added under Bush ”unpatriotic.”

The Republican National Committee pointed out that while growth of spending and debt may have slowed, Obama has overseen the three largest deficits in U.S. history.  (They also pass along fact-checker Politifact’s 2011 designation of Obama as the “undisputed debt king” of the last five presidents.)

Obama spoke in Denver following his appearance at the U.S. Air Force Academy commencement ceremony in Colorado Springs earlier in the day.  He then headed to California and Iowa for four more money events.

Copyright 2012 ABC News Radio


Supercommittee Poised for 'Disappointing' End?

iStockPhoto/Thinkstock(WASHINGTON) -- Absent any last-minute deals, the supercommittee on Monday will issue a statement announcing its failure to reach a deal to cut $1.2 trillion from the deficit.

“I wouldn’t be optimistic” Sen. Jon Kyl, R-Ariz., said Monday morning on Fox News. “I don’t want to create any false hope here...there will be an announcement by the two co-chairs towards the end of the day as to what the result was either way.”

Aides to the supercommittee members continue to half-heartedly insist that there are still conversations taking place between members of the 12-person committee, but the prospects are grim and the senators appear defeated.

A paper statement will be released late Monday, likely after the markets close, by co-chairs Sen. Patty Murray, D-Wash., and Rep. Jeb Hensarling, R-TX., announcing the committee is over.

“It’s disappointing,” Kyl said during an interview with CNN.  Earlier this year, Kyl announced his retirement; Monday morning he said the result of the supercommittee is one of the biggest disappointments of his career.

“This was Congress’ responsibility,” Sen. John Kerry, D-Mass., a member of the supercommittee said on CNN on Monday. “Frankly the only reason we don’t have an agreement is not because we weren’t willing to make reductions to Medicare, health care, do things we needed to do to make the system stronger, to protect it going forward. The reason is we are stuck on this insistence of making the Bush tax cuts for the wealthy permanent. I think the American people will judge that to be insane.”

“Our democratic friends had a different idea,” Kyl said on CNBC. “Their ideas was this the opportunity to raise taxes. And it didn’t matter what we proposed.”

Kyl said that Republicans believe there were “several incentives” for Democrats not to agree to a deal.

“They get to cut their favorite program, namely our national defense through the sequester program, namely our national defense though the sequester process,” Kyl said. “The president gets to keep his message that there is a dysfunctional congress and therefore he has somebody to blame for the bad economy.”

This criticism is also coming from outside of Capitol Hill. Some conservatives, like broadcaster Rush Limbaugh, called the entire supercommittee a farce, and claimed Democrats deliberately prevented the group from reaching an agreement so President Obama could blame the Republicans and a "do-nothing Congress" for the country's economic woes while stumping for reelection.

Talk of overturning the sequester -- the trigger of automatic across-the-board cuts – has already started.

“There will be opportunities to amend the effects of this across-the-board sequestration, on the defense side,” Kyl said on CNBC. “There will be efforts to find offsets or other ways to reduce spending so that those cuts in defense spending don’t occur.”

Last week, Defense Secretary Leon Panetta said the proposed cuts would be "devastating" to the U.S. military.

Copyright 2011 ABC News Radio


Super Committee ‘Painfully Aware’ of Nov. 23 Deadline

iStockphoto/Thinkstock(WASHINGTON) -- The Republican co-chair of the Joint Select Committee on Deficit Reductions says that Democrat and GOP members continue to negotiate and “talk about new ideas” as the super committee makes the final sprint to next Wednesday’s deadline.

Rep. Jeb Hensarling, R-Texas, said that “If an agreement is not reached today, members of the Joint Select Committee, Democrats and Republicans, will meet through the weekend.”

“We are painfully, painfully aware of  the deadline that is staring us in the face,” Hensarling said at a hastily arranged press conference after Republican members met Friday morning. “We have 12 good people who have worked hard since this committee has been created to find sufficient common ground for an agreement that will simultaneously address both our nation’s jobs crisis and debt crisis, and clearly, when we have something more to report we will report.”

The three House Democrats on the panel -- Reps. Chris Van Hollen, James Clyburn and Xavier Becerra -- provided the House Democratic Caucus with an update on the talks. Van Hollen, D-Md., said that he told his Democratic colleagues that the committee is, “still making every effort to try to reach an agreement that is balanced.”

“[Balanced] meaning that there [are] tough cuts but also revenues for closing corporate tax loopholes, asking folks at the very top to pay a little more and that we’re still focused on trying to do something about jobs,” Van Hollen said. “We should leave no stone unturned.”

Sen. John Kerry is currently hosting a bipartisan meeting Friday in the Capitol with Rep. Chris Van Hollen, Sens. Max Baucus, D-Mont., Rob Portman, R-Ohio, Jon Kyl, R-Ariz., and Pat Toomey, R-Pa. Democratic co-chair Sen. Patty Murray was the only Senate member of the committee not in attendance.

“We’re going to do whatever it takes to get an agreement,” Baucus told reporters as he headed into the meeting. “[There's] lots of different meetings. It’s whatever works.”

Copyright 2011 ABC News Radio


Deficit Super-Committee Held Closed-Door Breakfast Club Meeting

From left, Rep. Dave Camp, R-Mich., Rep. Xavier Becerra, D-Calif., and Sen. John Kerry, D-Mass., emerge from the private breakfast meeting of the Joint Deficit Reduction Committee in the U.S. Capitol on Thursday, Sept. 15, 2011. Bill Clark/Roll Call(WASHINGTON) -- For its third meeting, the 12-member, deficit-reduction committee gathered in the U.S. Capitol Thursday for an early, closed-door breakfast over orange juice, coffee, pastries and bacon to talk about how it can achieve a plan for deficit reduction by Thanksgiving.

After emerging from the meeting, the co-chairs of the debt committee were scant on details about what nitty-gritty was discussed. Rather, they seemed to use the morning’s breakfast as more of a getting-to-know-you meeting, even as all the members have called for quick work with a November deadline and the threat of the trigger options looming.

“It’s the first opportunity many of us have had to meet in an unofficial setting,” committee co-chairman Rep. Jeb Hensarling, R-Texas, said. “And every member today is ready to roll up their sleeves and get about the tough business of deficit reduction. We know it will not be fun, we know it will not be easy, it will not be popular.”

This is the third formal meeting of the committee tasked with identifying $1.5 trillion in deficit reduction by Nov. 23, as born out of negotiations on the debt-ceiling deal. The first meeting last week was largely administrative in nature. The second committee meeting, on Tuesday of this week, featured a testimony from Congressional Budget Office Director Doug Elmendorf about the past drivers of the nation’s deficits and debt.

Thursday’s meeting was largely about the interpersonal relationships among the members. The co-chairs had never even met before they were tasked in August to head the committee. In statements made by both co-chairs Thursday, they noted that they “stand at the ready to get to work.” The real work has yet to start. So, naturally, about 70 days before their deadline, the co-chairs were asked then when they will actually get to work.

“We will be putting out our schedule, hopefully, today,” Murray replied as she walked away.
Much hay has been made about the committee’s transparency. Two of the three meetings have been open to cameras thus far. Thursday’s was the first behind closed doors, generating statements from other members of Congress.

The co-chairs have said they will open hearings to cameras but in order to do the tough negotiating that needs to be done, some meetings have to be private.

Copyright 2011 ABC News Radio


Bowles, Simpson Challenge Super Committee to 'Go Big' with Deficit Reduction

Alex Wong/Getty Images(WASHINGTON) -- Erskine Bowles and Alan Simpson, the co-chairs of last year’s Fiscal Commission, challenged the Super Committee to “Go Big” and surpass its $1.5-trillion deficit reduction goal.
“As you begin your important work to reach a deficit reduction agreement, we urge you to ‘go big’ and develop a large-scale debt reduction package sufficient to stabilize the debt as a share of the economy,” a letter from Bowles, Simpson and over 60 other business experts to the Super Committee reads.
“We believe that a 'go big' approach that goes well beyond the $1.5-trillion deficit reduction goal that the Committee has been charged with and includes major reforms of entitlement programs and the tax code is necessary to bring the debt down to a manageable and sustainable level, improve the long-term fiscal imbalance, reassure markets, and restore Americans’ faith in the political system.”
Simpson, a former Republican senator from Wyoming, called the Super Committee’s $1.5-trillion goal “peanuts” compared to what’s actually needed to effectively reduce the deficit.  Last year, the Fiscal Commission developed a plan to reduce the federal deficit by $4 trillion in 10 years, but it failed to obtain the supermajority votes needed to pass.
The commission’s proposal contained bold initiatives such as raising the eligibility age to receive Social Security to 69, increasing the gas tax by 15 cents a gallon, making cuts to Medicare and slashing tax rates for corporations and the wealthiest in the country.
“When we put this out, they laughed. They all sat around and chuckled and said -- Boy these guys are goofy and came up with something here that can’t possibly work,” Simpson said.
“The $4 trillion number that Al brought up is not a number that we’ve made up.  I’ve said often that we didn’t get to that number by a number four bus passing us on the street,” Bowles, who served as President Bill Clinton’s chief of staff, said.  “Four trillion is not the maximum amount we need to do.  It’s not ideal amount.  It is the minimum amount we need to do is stabilize the debt.”
Bowles and Simpson warned the Super Committee must exhaust all options when determining where to make cuts in spending because the luxury of time has run out.
“We don’t have that luxury anymore.  We need to act and we need to act now.  We need to do this to reassure the markets,” Bowles said.  “Everything’s on the table, and for us to reach this grand bargain everything must be on the table if we’re really going to address our long-term fiscal problems.”
“We’re here to talk to you,” Simpson said. “We don’t do B.S., and we don’t do mush, and if you’re looking for B.S. and mush just watch every congressperson who talks about cutting the deficit and telling you nothing about how to do it.”

Copyright 2011 ABC News Radio

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