Full Text August 3, 2011: President Obama’s Remarks on Congress FAA — Federal Aviation Administration Impasse



Secretary Ray LaHood: Senate Approves FAA Extension; Tens of Thousands Can Go Back to Work

Source: WH, 8-5-11

I am thrilled this morning that the Senate has approved an FAA bill.  It is a tremendous victory for American workers everywhere.

I’m thrilled for our dedicated FAA employees who will be able to go back to work on Monday.  And I’m thrilled for the tens of thousands of hardworking workers who can go back to airport construction sites around the country.

As a matter of fairness, we will also do everything we can to get Congress to provide our furloughed employees with the back pay they deserve.

This was really no time to stop work on so many critical airport improvement projects — right in the middle of the construction season. But now, these good workers can get back on the job Monday doing the work they want to do, earning a good wage, and taking care of their families. And I am very, very happy for them.

I want to thank President Obama for his attention to this situation.  Even during the days of intense debt and deficit discussions, he insisted to me, “Take care of our employees. Take care of the construction workers. Figure this out.  Get it done.”

So that’s what we did.  We worked with Congress day and night to figure out a way to get these people back on the job.  And, thanks to the leadership of Senators Reid, Rockefeller, Hutchison and Baucus, we got it done.

Now, before we get too carried away, let’s remember that this extension only lasts until September 16; there’s still work to do so we can get a long term FAA bill.

But I’m optimistic that, with so many jobs on the line in these tough economic times, Congress can work out its differences.  President Obama really put his finger on it when he said, “We can’t afford to let politics in Washington hamper our recovery.”

From construction workers to our dedicated FAA employees, they will all have the security of knowing they are going to go back to work and will get a paycheck — and that’s what we’ve been fighting for.

We have the best aviation system in the world, and we intend to keep it that way.

Ray LaHood is the Secretary of Transportation.

The President Tells Congress: Don’t Put the Livelihoods of Thousands of People at Risk

Source: WH, 8-3-11

Read the Transcript  |  Download Video: mp4 (55MB) | mp3 (5MB)


Remarks by the President before Cabinet Meeting

Cabinet Room

2:05 P.M. EDT

THE PRESIDENT:  Well, obviously, this has been an eventful last few days.  As I have said yesterday, we have now averted what could have been a disastrous blow to the economy.  And we have identified on the front end over a trillion dollars in spending reductions that can be done sensibly and safely without affecting core programs.  And we now have a committee process in Congress that is charged with finding additional savings.  It’s going to be challenging work, and I’m encouraging Congress to take it with the utmost seriousness.

In the meantime, the American people have been continuing to worry about the underlying state of the economy, about jobs, about their wages, about reduced hours, about fewer customers.  The economy is still weakened, partly because of some things we couldn’t control, like the Japanese earthquake and the situation in the Europe, as well as the Arab Spring and its effect on the oil crisis.  Unfortunately, the debt ceiling crisis over the last month, I think, has had an unnecessary negative impact on the economy here, as well.

So I’m meeting with my Cabinet here to make sure that, even as they have been throughout these last several weeks, they are redoubling their efforts to focus on what matters most to the American people, and that is, how are we going to put people back to work; how are we going to raise their wages; increase their security; how are we going to make sure that they recover fully, as families and as communities, from the worst recession we’ve had since the Great Depression.

A good example of how undone work here in Washington can have an adverse impact on that economy is what’s going on with the Federal Aviation Administration.  And I’m going to be hearing from Ray LaHood about the situation that is looming as a consequence of Congress not acting.  Some of you may be aware of the fact that the FAA routinely gets its authorities extended through Congress; it’s happened 20 times since 2007.  This time, Congress has decided to play some politics with it.  And as a consequence, they left town without getting this extension done.

Here is what this means — thousands of FAA workers being furloughed, including safety inspectors.  It also means projects all across the country involving tens of thousands of construction workers being suspended, because Congress didn’t get its work done.  And that means folks who are on construction sites, doing work and bringing home a paycheck, now potentially find themselves going home without one, and important projects all across the country are left undone.

Here’s what also happens.  It turns out that this extension gives the authority to collect fees from airlines.  The airlines are still collecting these fees because it’s priced into their tickets, but they’re not turning them over to the federal government, and the federal government stands to lose $200 million a week.  That would be a billion dollars at a time when we’re worrying about how we pay for everything from education to Head Start.  And we don’t anticipate it’s going to be easy to get that money back.  Even though the airlines are collecting it, they’re keeping it.

So this is a lose-lose-lose situation that can be easily solved if Congress gets back into town and does its job.  And they don’t even have to come back into town.  The House and the Senate could, through a procedural agreement, basically do this through unanimous consent.  And they can have the fights that they want to have when they get back.  Don’t put the livelihoods of thousands of people at risk. Don’t put projects at risk.  And don’t let a billion dollars, at a time when we’re scrambling for every dollar we can, get left on the table because Congress did not act.

So I’m urging the House and the Senate to take care of this.  This is an example of a self-inflicted wound that is unnecessary.  And my expectation and I think the American people’s expectation is, is that this gets resolved before the end of this week.

All right?  Thank you very much, everybody.

Q    Mr. President, anything that you can do, sir?  Can you intervene?  Is there anything you can do?

THE PRESIDENT:  Well, I am — I have made calls to key leaders, and I am urging them to get this done.  But this is, as I said, not the kind of situation that is complicated.  All they have to do is do what they’ve done 20 times since 2007.  There’s not a big issue in terms of drafting legislation or arguing about the details of policy.  Just do what they’ve done in the past to make sure that these folks are on the job, including looking after the safety of our airlines.

All right?  Thank you very much.

Q    Are you ready for 5-0, Mr. President?

THE PRESIDENT:  I’m going to get advice from some around the table — (laughter) — about how to handle this milestone.  (Laughter.)  All right?

END  2:11 P.M. EDT

Full Text Debt Ceiling Showdown August 3, 2011: House Budget Committee Rep. Paul Ryan’s Wall Street Journal Op-ed “Where’s Your Budget, Mr. President?” & White House Response



Where’s Your Budget, Mr. President?

Ever since they fudged the numbers to pass ObamaCare, Democrats have abandoned credible spending plans.

Source: WSJ, 8-3-11


During the negotiations over raising the debt ceiling, President Obama reportedly warned Republican leaders not to call his bluff by sending him a bill without tax increases. Republicans in Congress ignored this threat and passed a bill that cuts more than a dollar in spending for every dollar it increases the debt limit, without raising taxes.

Yesterday, Mr. Obama signed this bill into law. He was, as he said, bluffing.

House majority leader Eric Cantor and Wall Street Journal columnist Peggy Noonan discuss the debt ceiling deal and the political fallout.

Nevertheless, the president still hasn’t shown us his cards. He still hasn’t put forward a credible plan to tackle the threat of ever-rising spending and debt, and his evasiveness is emblematic of the party he leads.

Ever since they abused the budget process to jam their health-care takeover through Congress last year, the Democrats have simply done away with serious budgeting altogether. The simplest explanation—and the president’s real bluff—is that they don’t want to commit publicly to the kind of tax increases and health-care rationing that would be required to sustain their archaic vision of government.

The president’s February budget deliberately dodged the tough choices necessary to confront the threat of runaway federal spending. It was rejected unanimously in a Senate controlled by his own party.

Since then he has offered a lot of rhetoric but no real plan to avoid a spending-driven debt crisis. His speeches and press conferences are no substitutes for actual budgets with specific numbers and independently verified projections of future deficits and debt. Meanwhile, it has been over two years since the Democrat-controlled Senate passed any budget at all. This is a historic failure to fulfill one of the most basic responsibilities of governing.

This leadership deficit has thrown the federal budget process into chaos at the worst possible time. Even though Congress has cut spending by a significant amount, it still hasn’t dealt with the drivers of our debt—primarily federal spending on health care.

The math is scary, yet simple: In the years ahead, spending on programs such as Medicare, Medicaid and the Democrats’ new health-care entitlements is projected to skyrocket relative to the size of the economy, even as federal spending on everything else is projected to decline (see the nearby chart).

Even well-intentioned proposals such as the one put forward by the Senate’s Gang of Six lacked specific reforms to curb the health-care spending. Actually, it took steps in the wrong direction by explicitly requiring policy makers to “maintain the basic structure” of government health-care programs. That structure is unsustainable.

Medicare reimburses all providers of care according to the same formula, even if the quality of the care they provide is poor and the cost is high. This top-down delivery system exacerbates waste, as none of the primary stakeholders has a strong incentive to deliver the best-quality care for the lowest cost. Medicaid has fallen victim to the same trend: an open-ended commitment that drives up costs, coupled with a flawed federal-state matching formula that is breaking state budgets.

Supporters of the Democrats’ new health-care law claim that the law will fix these problems. But we are already seeing evidence that its maze of mandates, dictates, controls and tax hikes will actually push costs even further in the wrong direction.

Getty Images

President Obama signing the Budget Control Act of 2011 in the Oval Office on Tuesday.

Even the president seems to understand that the status quo of these programs is unsustainable. As he put it during a press conference on July 11, “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.”

On this point, Mr. Obama and I couldn’t agree more. Where we disagree is over how best to confront this problem.

The president’s health-care law represents an attempt to double down on the failed policies of the past. Despite claims that new methods of reimbursing Medicare providers will tame costs, the fact is that the federal bureaucracy has tried most of the measures before, without any success.

Worse, the law would create a new 15-member board of bureaucrats empowered to bypass Congress to make deep cuts in payments to Medicare providers. Time and again, such provider cuts have had two consequences: Providers have either increased the volume of services they provide for each condition, or they have stopped accepting Medicare patients altogether.

There is a better way—structural reforms that empower patients with greater choices and increase the role of competition in the health-care marketplace. The budget passed by the House of Representatives in April, “The Path to Prosperity,” outlined the beginnings of such an approach by repealing the president’s health-care law and proposing reforms that would make Medicare and Medicaid stronger and solvent for current and future generations.

In other words, we’ve put our cards on the table: According to the Congressional Budget Office (CBO), our plan puts the federal budget on the path to balance without resorting to job-destroying tax hikes. It will eliminate the shadow of debt that is discouraging job creation while advancing pro-growth tax reforms to get the economy moving again.

By contrast, the president and his party’s leaders have refused to submit specific, credible budget plans that tackle health-care costs while restoring economic growth. Unwilling to reconsider their failed bureaucratic approaches to health and retirement security, the Democrats can only propose tax increases, and lots of them.

The CBO’s latest Long-Term Outlook in June estimated that total tax revenues would have to double by mid-century in order to finance our current spending path. Health-care costs rose about 8% in 2011 and are projected to rise by 8.5% in 2012. At this rate, taxes would have to rise again and again just to keep up with health-care spending. Is it any wonder that the president and his party are afraid to produce a budget that requires such ruinous levels of taxation?

The president tried to use the debt-ceiling negotiations to secure the first of many tax increases that his party needs to pay for its legacy of unfunded promises. He failed. Instead, Republicans won the policy debate by securing the first of many spending restraints we need to avoid a debt-driven economic calamity.

Much hard work remains. But this work will be harder still if leading Democrats remain unwilling to lay their cards on the table and give the American people the debate they deserve.

Mr. Ryan, a congressman from Wisconsin, serves as chairman of the House Budget Committee.

Responding To Representative Ryan

Source: WH, 8-3-11

House Budget Committee Chairman Paul Ryan offered an interesting take on the President’s leadership on dealing with our long-term debt and deficits the recent deficit reduction negotiations in today’s Wall Street Journal. Below are a few of Congressman Ryan’s claims along with our responses.

Claim: The President has failed to put forward a plan to tackle our long term debt and deficits.

  • Since the beginning of the current debate on the debt ceiling, the President has led with a comprehensive plan for deficit reduction.
  • In April, the President released a fiscal framework for $4 trillion in deficit reduction, which described the President’s plans for closing tax loopholes and for responsible reforms of Medicare and Medicaid so they are strengthened for future generations.
  • Beginning less than a week after he announced this Framework, the President led four separate efforts to negotiate a compromise on the debt limit – talks with Vice President Joe Biden, meetings with all eight Congressional leaders from both parties, and two rounds of negotiations directly with Speaker Boehner.
  • Throughout this process, the Administration put forward specific policy proposals with the goal of reaching an agreement on a $4 trillion package – an agreement which Speaker Boehner ultimately walked away from.

Claim: The GOP “won the policy debate” during the debt negotiations.

  • We believe that this agreement was not a victory for one party, but for the American people. If Congress did not act and allowed the United States to default on its obligations, the results would have been catastrophic for our economy and for millions of Americans still digging out from the last recession.
  • The debt agreement is consistent with the President’s commitment to protecting our nation from default and achieving significant deficit reduction through a balanced approach.  It represents an important down payment on reform of about $1 trillion and sets the stage for additional balanced deficit reduction by the end of the year.
  • In enacting this bill, the President held to his principles—and prevented Republicans from ending Medicare as we know it, slashing Medicaid, and threatening Social Security.
  • The President prevented Republicans from using the prospect of default as leverage again in six months by pushing any additional debt limit increases to 2013.
  • The cuts in the first phase are balanced between domestic and security spending, while protecting critical initiatives like aid for college students.
  • If the new Joint Committee on Deficit Reduction fails to act, the law includes a balanced enforcement mechanism—that divides automatic cuts 50-50 between defense and non-defense with low-income programs exempted.

Claim: The President “warned Republican leaders not to call his bluff by sending him a bill without tax increases.”

  • As the AP reported, President Obama warned Republicans not to call his bluff “by passing a short-term debt limit increase he has threatened to veto.”
  • The President stood firm and forced Republicans to back down, preventing them from using the prospect of default as leverage again in six months by ensuring that any additional debt limit increases will not be needed until 2013.

Claim: Spending on Medicare, Medicaid and the Affordable Care Act is projected to skyrocket, while the House Republicans’ budget outlined a responsible approach to Medicare and Medicaid Reform.

  • The Affordable Care Act was fully paid for, and according to the CBO will reduce the deficit by $200 billion over the next 10 years and by more than $1 trillion in the next decade.
  • The Affordable Care Act will provide coverage to 34 million Americans and will extend the life of the Medicare trust fund.
  • The House Republican plan would convert Medicare into a voucher program; increasing seniors’ health costs by $6,400 annually starting in 2022; raise health insurance premiums for middle-class Americans and small businesses; and cut Federal Medicaid spending by one-third by the end of the decade, which would cause 50 million to lose coverage.

Claim: The House Republicans’ plan would put the budget on a path to balance without tax increases, while President Obama tried to use the debt ceiling negotiations to raise taxes.

  • The House Republicans’ plan would also put the nation on a path to end the guarantee of Medicare for our seniors while imposing deep spending cuts that would harm our economy to balance out tax cuts for the highest income earners.
  • Their approach locks in many of the irresponsible policies that brought us to the debt limit this week including tax cuts for the wealthy, big corporations and special interests.
  • In stark contrast, the President stands committed to a balanced approach with responsible entitlement reform, and comprehensive tax reform that produces a system which is fairer, has fewer loopholes, less complexity, and is not rigged in favor of those who can afford lawyers and accountants to game it.
Stephanie Cutter is Assistant to the President and Deputy Senior Advisor
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