Full Text Campaign Buzz September 20, 2012: Mitt Romney’s Speech at a Campaign Event in Sarasota, Florida — “I Will Change Washington”

CAMPAIGN 2012

CAMPAIGN BUZZ 2012

THE HEADLINES….

Mitt Romney: “I Will Change Washington”

Source: Mitt Romney Press, 9-20-12

“[President Obama] can’t do it. His slogan was ‘Yes, we can.’ His slogan now is ‘No, I can’t.’ This is time for a new president.” – Mitt Romney

Remarks
Sarasota, FL

September 20, 2012

Click Here To Watch Mitt Romney

MITT ROMNEY: “Now the country faces major challenges, you know that we face massive debt, trillion-dollar deficits. We face a Washington that’s broken – that can’t get the job done. The President today threw in the white flag of surrender again. He said he can’t change Washington from inside. He can only change it from outside. Well, we’re going to give him that chance in November. He’s going outside. I can change Washington. I will change Washington. We’ll get the job done from the inside – Republicans and Democrats will come together. He can’t do it. His slogan was ‘Yes, we can.’ His slogan now is ‘No, I can’t.’ This is time for a new president.”

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Full Text Campaign Buzz August 20, 2012: Mitt Romney’s Speech on the Burden of Debt on Future Generations in Manchester, New Hampshire

CAMPAIGN 2012

CAMPAIGN BUZZ 2012

THE HEADLINES….

MITT ROMNEY: IT IS IMMORAL TO PASS ON THE BURDEN OF DEBT TO FUTURE GENERATIONS

Source: Mitt Romney Press, 8-20-12 

“In my view, it’s not just bad economics; it is immoral for us to pass these burdens on to coming generations.”– Mitt Romney

Remarks
Manchester, NH
August 20, 2012

Click Here To Watch Mitt Romney

MITT ROMNEY: “In my view, it’s not just bad economics; it is immoral for us to pass these burdens on to coming generations. So what do I do? First, you have got to end the deficit and then start accumulating reserves and growing. That is what we did. Most states figure out how to do this. They balance their budget. And in my state, I came in, we had about a $3 billion budget gap. We balanced the budget and then we began building a rainy day fund. It was over $2 billion when I left. That is how you do it. So what do we do here? I have three things I’d do. To one, get rid of the deficit, and then, let me tell you how we’re also going to go on to start pulling down the debt. Three approaches: Number one, we are going to get rid of programs we do not need. My test is this: I’ll look at every program and say is this so critical it’s worth borrowing money from China to pay for it? And on that basis we will get rid of some programs like Obamacare and some others. Number two, we’re going to take a lot of programs and send them back to states where they can be run more efficiently and with less fraud and abuse. And number three, we’re going to skinny down the size of the federal workforce that remains, with attrition, to make sure it’s more productive.”

Full Text Campaign Buzz May 15, 2012: Mitt Romney’s Iowa Speech Defends Economic Record Blames Obama for ‘Prairie fire of Debt’ — Day After Obama Campaign Ad Attacked Bain Years as Job Killing

CAMPAIGN 2012

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University. Ms. Goodman has also contributed the overviews, and chronologies in History of American Presidential Elections, 1789-2008, 4th edition, edited by Gil Troy, Fred L. Israel, and Arthur Meier Schlesinger published by Facts on File, Inc. in  2011.

CAMPAIGN BUZZ 2012

IN FOCUS: ROMNEY DEFENDS ECONOMIC RECORD IN IOWA SPEECH AFTER OBAMA AD TARGETED BAIN YEARS AS JOB KILLING

On Spending, President Obama Hasn’t Kept His Promises To Iowa: “President Obama has spent the last four years trying to convince Iowans he will stop passing our financial burdens to the next generation. But his liberal policies of skyrocketing debt and deficits just haven’t lived up to the promises he’s made. As president, Mitt Romney will finally deliver the change Washington needs by reining in wasteful spending and getting our economy moving again.” –- Amanda Henneberg, Romney Campaign Spokesperson, 5-15-12

In Iowa, Romney tags Obama for debt ‘prairie fire’: Republican Mitt Romney said Tuesday President Barack Obama’s support for increased federal debt has put the economy on a disastrous course, portraying himself in a speech in battleground Iowa as the defender of fiscal responsibility and his opponent as reckless…. – AP, 5-15-12

  • In Iowa, Romney Tests Economic Message: Iowa is an interesting laboratory for Mr. Romney’s campaign – and how he does in the state could dramatically impact the outcome of the presidential election in November…. – NYT, 5-15-12
  • Romney, GOP try to shift focus to deficit: Mitt Romney will continue his blitz against President Barack Obama over the federal deficit on Tuesday, signaling a GOP shift away from social issues and back to what Republicans consider the president’s Achilles’ heel…. – CNN, 5-15-12
  • How Romney is fighting harsh charge he’s a heartless job-killer: Two new pro-Obama ads are hammering Romney’s former firm, Bain Capital, for the demise of a Missouri steel company. The counter-ad from the Romney camp focuses on a firm that Bain bolstered… – CS Monitor, 5-15-12
  • Romney vows to douse ‘prairie fire of debt’: Mitt Romney will say today he can extinguish the “prairie fire of debt” that’s sweeping across the nation. The presumptive GOP presidential nominee will speak this afternoon in Des Moines, in his first campaign appearance…. – USA Today, 5-15-12
  • Rob Portman defends Romney over Bain attacks: Ohio Sen. Rob Portman defended Mitt Romney against Democratic charges that he was a “job destroyer” during his tenure at Bain Capital, insisting the presumptive Republican nominee has a “pretty good” record of creating jobs…. – ABC News, 5-14-12 Obama targets Mitt Romney’s Bain years: President Obama’s reelection campaign rolled out a broad attack Monday against Republican Mitt Romney’s business experience at Bain Capital, trying to undermine Romney’s core argument for why he should be president. The Obama campaign began airing a…. – WaPo, 5-14-12
  • Obama ad depicts Mitt Romney as job-killing ‘vampire.’ Over the top?: Obama’s new ‘Steel’ ad picks up themes of vanquished Romney GOP rivals – that Mitt Romney is not a job creator but a job killer. But Romney was no longer with Bain Capital when the Kansas City steel mill went under…. CS Monitor, 5-14-12
  • Mitt Romney, Bain Capital, and the One Percent Economy: Last week, the Obama reelection campaign told Mark Halperin that it believes Mitt Romney’s one chance of winning the election would be to establish himself as a credible economic fix-it figure, and that it intended to focus its attacks on destroying that reputation. Today the campaign launches a missile straight at its target with an unusually long two-minute campaign ad assailing Romney’s tenure at Bain Capital, along with a website (romneyeconomics.com) reinforcing the message that Romney’s record is all about extracting profit for the very rich, at the expense of the middle class. The name of the website, of course, implies that Romney’s record at Bain defines his economic philosophy…. – New York Magazine, 5-14-12

Mitt Romney Delivers Remarks In Des Moines, Iowa

Source: Mitt Romney Press, 5-15-12

Mitt Romney today delivered remarks in Des Moines, Iowa. The following remarks were prepared for delivery:

Thank you all very much.

It’s good to be back in Iowa. So many friends here hold a special place in my heart.

I’ve come here today to talk to you about an issue that affects the very heart of America.

Of course, Iowa is much more than a collection of beautiful farms and small towns and cities bounded by two of America’s great rivers. Iowa is a collection of the values that built America and that have sustained us through good times and bad. You know them well: hard work, taking care of our neighbors, family, faith in God and country. Common sense, kitchen table values. Not fancy, but enduring.

These aren’t the values that lead to out-of-control spending sprees, or to piling up massive amounts of debt you know your children – and grandchildren – will have to work all their lives to pay off. These aren’t the values of putting off difficult decisions with the hope that maybe someone else will solve them.

Today America faces a financial crisis of debt and spending that threatens what it means to be an American. Here in the heartland you know in your hearts that it’s wrong.

We can’t spend another four years talking about solving a problem that we know we are making worse every single day.

When the men and women who settled the Iowa prairie saw a fire in the distance, they didn’t look around for someone else to save them or go back to sleep hoping the wind might blow another direction. They knew that their survival was up to them.

A prairie fire of debt is sweeping across Iowa and our nation and every day we fail to act that fire gets closer to the homes and children we love.

This is not solely a Democrat or a Republican problem. The issue isn’t who deserves the most blame, it’s who is going to do what it takes to put out the fire.

The people of Iowa and America have watched President Obama for nearly four years, much of that time with Congress controlled by his own party. And rather than put out the spending fire, he has fed the fire. He has spent more and borrowed more.

The time has come for a president, a leader, who will lead. I will lead us out of this debt and spending inferno. We will stop borrowing unfathomable sums of money we can’t even imagine, from foreign countries we’ll never even visit. I will bring us together to put out the fire!

A lot of people think this is a problem we can’t solve. I reject that kind of “can’t do” defeatist talk. It’s wrong.

What’s happened here isn’t complicated. Washington has been spending too much money and our new President made things much worse. His policies have taken us backwards.

Almost a generation ago, Bill Clinton announced that the Era of Big Government was over.

Even a former McGovern campaign worker like President Clinton was signaling to his own Party that Democrats should no longer try to govern by proposing a new program for every problem.

President Obama tucked away the Clinton doctrine in his large drawer of discarded ideas, along with transparency and bipartisanship. It’s enough to make you wonder if maybe it was a personal beef with the Clintons….but really it runs much deeper.

President Obama is an old school liberal whose first instinct is to see free enterprise as the villain and government as the hero. America counted on President Obama to rescue the economy, tame the deficit and help create jobs.  Instead, he bailed out the public-sector, gave billions of dollars to the companies of his friends, and added almost as much debt as all the prior presidents combined.

The consequence is that we are enduring the most tepid recovery in modern history.

The consequence is that half of the kids graduating from college can’t find a job that uses their skills. Half.

The consequence is that retirees can no longer get by on savings and Social Security.

The consequence is that the length of time it takes an unemployed worker to find a job is the longest on record.

This is why even those who voted for Barack Obama are disappointed in him.

Disappointment is the key in which the President’s re-election is being played. Americans will not settle for four more years of the same melancholy song. We can and we must do better.

President Obama started out with a near trillion-dollar stimulus package – the biggest, most careless one-time expenditure by the federal government in history.  And remember this: the stimulus wasn’t just wasted – it was borrowed and wasted.  We still owe the money, we’re still paying interest on it, and it’ll be that way long after this presidency ends.

Then there was Obamacare.  Even now nobody knows what it will actually cost.  And that uncertainty has slowed our economy.  Employers delay hiring and entrepreneurs put the brakes on starting new businesses, because of a massive, European-style entitlement that Americans didn’t want and can’t afford.

When you add up his policies, this President has increased the national debt by five trillion dollars.

Let me put that in a way we can understand. Your household’s share of government debt and unfunded liabilities has reached more than $520,000 under this president. Think about what that means. Your household will be taxed year after year with the interest cost of that debt and with the principal payments for those liabilities. Of course, it won’t be paid off by the adults in your household.  It will be passed along to your children. They will struggle throughout their lives with the interest on our debts–and President Obama is adding to them every single day.

And that’s the best case scenario. The interest rate on that debt is bound to go up, like an adjustable mortgage. And there’s a good chance this debt could cause us to hit a Greece-like wall.

Subprime mortgages came close to bringing the economy to its knees. This debt is America’s Nightmare Mortgage. It is adjustable, no-money down, and assigned to our children. Politicians have been trying to hide the truth about this Nightmare Mortgage for years–just like liar-loans.

This is not just bad economics; it is immoral.

During my time in business and in state government, I came to see the economy as having three big players – the private sector, the states and localities, and the federal government.

Of these three, the private sector is by far the most efficient and cost effective. That’s because scores of businesses and thousands of entrepreneurs are competing every day to find a way to deliver a product or a service that is better than anyone else’s. Think about smart phones. Blackberry got things going. Then Apple introduced the iPhone. Now the Android platform leads the market. In the world of free enterprise, competition brings us better and better products at lower and lower cost. Innovate and change or you go out of business. And the customer–us–benefits.

Government doesn’t begin to compare when it comes to change and improvements that provide better and less expensive services and products. But among governments, the states and localities are more responsive than the federal government, probably because there is a degree of competition between them.

The slowest, least responsive sector is the federal government.  Nobody hears “Washington, D.C.” and thinks “efficiency.”

Imagine if the federal government was the sole legal supplier of cell phones. First, they’d still be under review, with hearings in Congress. When finally approved, the contract to make them would go to an Obama donor. They’d be the size of a shoe, with a collapsible solar panel.  And campaign donors would be competing to become the all-powerful App Czar.

My point is this:  as President Obama and old-school liberals absorb more and more of our economy into government, they make what we do more expensive, less efficient, and less useful. They make America less competitive. They make government more expensive.

What President Obama is doing is not bold; it’s old.

As president, I will make the federal government simpler, smaller, smarter – and, by the way, more in keeping with the vision of the Framers of our Constitution.

This is why I do not, for one moment, share my opponent’s belief that our spending problems can be solved with more taxes.  You do not owe Washington a bigger share of your paycheck.

Instead of putting more limits on your earnings and your options, we need to place clear and firm limits on government spending.  As a start, I will lower federal spending to 20 percent of GDP within four years’ time – down from the 24.3 percent today.

The President’s plan assumes an endless expansion of government, with costs rising and rising with the spread of Obamacare. I will halt the expansion of government, and repeal Obamacare.

Working together, we can save Social Security without making any changes in the system for people in or nearing retirement.  We have two basic options for future retirees: a tax increase for high-income retirees, or a decrease in the benefit growth rate for high-income retirees.  I favor the second option; it protects everyone in the system and it avoids higher taxes that will drag down the economy.

I have proposed a Medicare plan that improves the program, keeps it solvent, and slows the rate of growth in health care costs.

Both of these reforms are relatively simple, compared to the far more difficult choices we’ll face if we do nothing.  Of course, Medicare and Social Security are also easy to demagogue, and I expect the President to continue doing that in this campaign.  But Americans are on to that game, and I’m not going to insult voters by pretending that we can just keep putting off entitlement reform.  I will continue to speak honestly, and, if elected, I will do what is right for the people of America.

The President has made little effort to rein in redundancy and waste.

In 2011, the Government Accountability Office found 34 areas where agencies, offices, or initiatives in the federal government had overlapping objectives or were providing similar services.  The GAO estimated that fixing this redundancy could save over $100 billion.  Yet, one year later, only three of these 34 areas had been fully addressed.  Only one program was actually defunded.

In 2010, 17 federal government agencies gave $7.7 billion to more than 25 United Nations programs, billions of it voluntarily.

Another example:  There are 94 federal programs in 11 agencies that encourage “green” building.  A report found that the results of their initiatives and investments are, quote, “unknown.”

We see the same bureaucracy and overhead in our anti-poverty programs.  Last year, the federal government spent more than $600 billion on more than 100 different programs that aim to help the poor.

My approach to federal programs and bureaucracy is entirely different. Move programs to states or to the private sector where they can be run more efficiently and where we can do a better job helping the people who need our help. Shut down programs that aren’t working. And streamline everything that’s left. It’s time for the people of America to take back the government of America.

Entitlement reform, doing away with redundancy and waste, and shifting services and programs to the economic player who can deliver them best – these are all serious steps toward getting our debt and spending under control.

But above all, we need to shake off the static big-government mindset of these past few years, and all the limits and regulations that go with it.  We need a big turnaround here, and it requires a focused, unrelenting, long-term agenda for economic growth.

Instead of leading the world in how much we borrow, America must continue to lead the world in how much we build, create, and invent.

With all that we’ve been through these past few years, the challenges can seem awfully big, and some might look at America and wonder if we have lost our confidence.  But confidence is not what is missing.  All that’s lacking now is direction and leadership.

These have been years of disappointment and decline, and soon we can put them behind us.  We can prosper again, with the powerful recovery we’ve all been waiting for, the good jobs that so many still need, and, above all, the opportunities we owe to our children and grandchildren.

All of this can be more than our hope – it can be our future.  It can begin this year, in the choice you make, so I ask for your help, your support, and your vote on the sixth of November.

Thank you all, and God bless America.

Full Text Obama Presidency May 5, 2012: President Barack Obama’s Weekly Address A New Chapter in Afghanistan — Asks Congress to Invest in Debt & Rebuild America

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

President Obama calls on Congress to take the money we are no longer spending at war, use half of it to pay down our debt, and use the other half to rebuild America.

President Barack Obama tapes the weekly address in the Map Room

Weekly Address: A New Chapter in Afghanistan

Source: WH, 5-5-12
After signing an agreement that details our future relationship with Afghanistan, President Obama explains that we must now focus on the type of nation our troops return home to, and calls on Congress to take the money we are no longer spending at war, use half of it to pay down our debt, and use the other half to rebuild America.

Transcript | Download mp4 | Download mp3

POLITICAL QUOTES & SPEECHES

WEEKLY ADDRESS: A New Chapter in Afghanistan

In this week’s address, President Obama spoke about his recent trip to Afghanistan, where he met with our brave troops and signed an historic agreement that will help put an end to the war.  The goal of defeating al Qaeda is within sight, we have killed Osama Bin Laden, and the President has now signed an agreement with Afghanistan that details a new relationship in which the Afghans will soon be responsible for the security of their nation. As we look towards that future, we must also focus on the type of nation our troops return to.  This is why the President called on Congress to take the money we are no longer spending at war, use half of it to pay down our debt, and use the other half to rebuild America. It’s time for America to make the choices that ensure a strong middle class where everyone a fair shot, everyone does their fair share, and everyone plays by the same rules.

Remarks of President Barack Obama
Weekly Address
The White House
May 5, 2012

This week, I traveled to Afghanistan—to thank our troops serving far from home, and to sign an historic agreement that will help us complete our mission and end the war.

As Commander-in-Chief, nothing is more humbling or inspiring than the chance to spend some time with our troops.  At Bagram Air Base, I visited with some of our outstanding men and women in uniform.  I thanked them for their extraordinary service.  And I let them know that America honors their sacrifice.

Because of their bravery and dedication, the tide of war has turned in Afghanistan. We have broken the Taliban’s momentum. We’ve built strong Afghan Security Forces. We have devastated al Qaeda’s leadership. And one year ago, our troops launched the operation that killed Osama bin Laden. The goal that I set – to defeat al Qaeda, and deny it a chance to rebuild – is within reach.

Because of the progress we have made, I was able to sign an historic agreement between the United States and Afghanistan that defines a new kind of relationship between our countries – a future in which Afghans are responsible for the security of their nation, and we build an equal partnership between two sovereign states; a future in which the war ends, and a new chapter begins.

The enormous sacrifices of our men and women in uniform are not over.  But many of our troops are already coming home. Last year, we removed 10,000 U.S. troops from Afghanistan. Another 23,000 will leave by the end of the summer. As our coalition agreed, by the end of 2014, the Afghans will be fully responsible for the security of their country

And this is as it should be.  Because after more than a decade of war, it is time to focus on nation building here at home.

As a new greatest generation returns from overseas, we must ask ourselves, what kind of country will they come back to?  Will it be a country where a shrinking number of Americans do really well while a growing number barely get by?  Or will it be a country where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules – a country with opportunity worthy of the troops who protect us?

America has answered this question before. My grandfather, a veteran of Patton’s Army, got the chance to go to college on the GI Bill.  My grandmother, who worked on a bomber assembly line, was part of a workforce that turned out the best products on Earth.  They contributed to a story of success that every American had the chance to share in, the basic American promise that if you work hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement.

Keeping that promise alive is the defining issue of our time. But it means making responsible choices.

I don’t think we should prioritize things like more tax cuts for millionaires while cutting the kinds of investments that built a strong middle class.

That’s why I’ve called on Congress to take the money we’re no longer spending at war, use half of it to pay down our debt, and use the other half to rebuild America.

Because we’ve got more jobs to create.  More students to educate.  More clean energy to generate.  More entrepreneurs with the next great idea, just looking for their shot at success. We’ve got to invest in things like education and medical research.  We’ve got to build newer, faster transportation and communication networks.  And we’ve got to secure the care and benefits our veterans have earned, so that we serve them as well as they have served us.

Every time I have the privilege of meeting with our troops, I’m struck by their courage, their commitment, their selflessness, and their teamwork.  They have something to teach us.  Recovering from the worst economic crisis since the Great Depression is a work in progress – but if we follow their example, then I have no doubt we will preserve the promise of this country, protect the freedoms we cherish, and leave for our children an America that’s built to last.

God bless you, and have a great weekend.

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Full Text September 19, 2011: President Barack Obama Unveils $4 Trillion Economic Growth & Deficit Reduction Plan — $3 Trillion Deficit Cuts in Over 10 Years — $1.5 Trillion in New Taxes

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

President Obama announces his Plan for Economic Growth and Deficit Reduction

President Barack Obama delivers a statement announcing his Plan for Economic Growth and Deficit Reduction, in the Rose Garden of the White House, Sept. 19, 2011.(Official White House Photo by Pete Souza)

 

The President’s Plan for Economic Growth and Deficit Reduction

Source: WH, 9-19-11

President Obama’s Plan for Economic Growth and Deficit Reduction — Full Text — PDF

The health of our economy depends on what we do right now to create the conditions where businesses can hire and middle-class families can feel a basic measure of economic security. In the long run, our prosperity also depends on our ability to pay down the massive debt the federal government has accumulated over the past decade. Today, the President sent to the Joint Committee his plan to jumpstart economic growth and job creation now – and to lay the foundation for it to continue for years to come.

The President’s Plan for Economic Growth and Deficit Reduction lives up to a simple idea: as a Nation, we can live within our means while still making the investments we need to prosper – from a jobs bill that is needed right now to long-term investments in education, innovation, and infrastructure. It follows a balanced approach: asking everyone to do their part, so no one has to bear all the burden.  And it says that everyone – including millionaires and billionaires – has to pay their fair share.

Overall, it pays for the American Jobs Act and produces net savings of more than $3 trillion over the next decade, on top of the roughly $1 trillion in spending cuts that the President already signed into law in the Budget Control Act – for a total savings of more than $4 trillion over the next decade. This would bring the country to a place, by 2017, where current spending is no longer adding to our debt, debt is falling as a share of the economy, and deficits are at a sustainable level.

Now, let me review some of its main components.

First, the plan includes the American Jobs Act – a set of ideas supported by both Democrats and Republicans that will put people back to work and put more money in the pockets of working Americans. It’s imperative that we pass this bill now both to get the economy moving again and creating jobs at the pace we need it, and to help with deficit reduction since a growing economy is a vital part to reducing our deficits and debt.

Second, the plan lays out a way to live within our means so that we can invest in the things that will power economic growth for decades to come: education, innovation, clean energy, and infrastructure. To do this, it follows a balanced approach to deficit reduction by drawing from across the Budget for savings and by asking everyone to pay their fair share.

Specifically, the President is proposing approximately $580 billion in cuts and reforms to a wide range of mandatory programs from cuts to agricultural subsidies that are no longer necessary to reform of the Pension Benefit Guaranty Corporation and modest changes to federal civilian worker retirement and health benefits for military retirees.

In health care programs, the President is recommending a series of reforms that builds on the historic savings and reforms in the Affordable Care Act to strengthen Medicare and Medicaid so that these vital programs are robust and healthy to serve Americans for years to come.

These proposals will save $248 billion in Medicare and $72 billion in Medicaid and other health programs over 10 years, and extend the life of the Medicare Trust Fund by three years. This is accomplished in a way that does not shift risks unfairly onto the individuals they serve; slash benefits; or undermine the fundamental compact they represent to our Nation’s seniors, people with disabilities, and low-income families. Any savings that affect beneficiaries do not begin until 2017 and do not affect middle-income and current beneficiaries. Other health and Medicaid savings amount to $72 billion, and because of the structural nature of these reforms to both programs, health savings grow to over $1 trillion in the second decade. Moreover, as he said today, the President will veto any bill that takes one dime from the Medicare benefits seniors rely on without asking the wealthiest Americans and biggest corporations to pay their fair share.

The President’s plan reflects the Administration’s current policy of drawing down our troop presence in Afghanistan and the transition from a military to a civilian-led mission in Iraq for a savings of $1 trillion.

Finally, the President calls on the Committee to undertake comprehensive tax reform and lays out five key principles. Reform should: 1) lower tax rates; 2) cut wasteful loopholes and tax breaks; 3) reduce the deficit by $1.5 trillion; 4) boost job creation and growth; and 5) comport with the “Buffett Rule” that people making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay.

To advance this debate, the President is offering a detailed set of specific tax loophole closers and measures to broaden the tax base that, together with the expiration of the high-income tax cuts, would be more than sufficient to hit the $1.5 trillion target for additional revenue. These measures include cutting tax preferences for high-income households, eliminating tax breaks for oil and gas companies, closing the carried interest loophole for investment fund managers, and eliminating benefits for those who own corporate jets.

We have little doubt that some of these proposals will not be popular with many of those who benefit from these affected programs and currently enjoy special tax breaks. These are tough choices that we had to make — and some of these changes we are only putting forward to address our fiscal situation. But we are all in this together, and all of us must contribute to getting our economy moving again and on a firm fiscal footing.

If we don’t take a balanced approach to deficit reduction that includes asking the wealthiest 2 percent of families and big corporations to pay their fair share, then everyone else must shoulder the load. That could mean drastic cuts to things like education, research and development, infrastructure, and food safety; and could mean severe cuts to Medicare that would burden seniors with thousands of dollars in out-of-pocket costs.

Second, if we do nothing, our economy will not get the jolt it needs now and it will be weighed down by our debt or years to come. If we don’t take these steps now, it will only get harder.

I’ve been working on these issues for three decades, and I can tell you that making these changes in this plan will require some tough choices. Everyone will have a cut or a new policy that they do not like – or wish that they could avoid. But remember: the challenge we face is one that we all face – together – as Americans. We are in this together, and the only way that we can have a balanced approach is that we all do our part.

So read the plan, and join the debate about how we can jumpstart our economy, reduce our deficit, and win the future.

President Obama: Washington Has to Live within its Means

Source: WH, 9-19-11

President Obama today unveiled a plan for economic growth and deficit reduction that details how to pay for the American Jobs Act while also paying down our debt over time. The plan, which is being sent to the Congressional Joint Committee on Deficit Reduction, offers a balanced approach to further reduce our nation’s deficit and get our fiscal house in order, based on the values of shared responsibility and shared sacrifice.

The President’s plan lays out a blueprint that will enable Washington to live within its means, something Americans across the country have been doing for years. And the balanced approach means that no one group has to bear the burden alone. It means that everyone – including millionaires and billionaires – has to pay their fair share.

The plan, which will reduce the deficit by $4 trillion, includes many of the proposals the President has previously discussed — closing tax loopholes for oil companies and hedge fund managers and asking the very wealthiest and special interests to pay their fair share. It also includes difficult spending cuts and making adjustments to strengthen programs like Medicare and Medicaid for future generations. As part of the plan, the President is also calling on Congress to undertake comprehensive tax reform to simplify the system, make it more fair and efficient, and lay a stronger foundation for economic growth:

It comes down to this: We have to prioritize. Both parties agree that we need to reduce the deficit by the same amount — by $4 trillion. So what choices are we going to make to reach that goal? Either we ask the wealthiest Americans to pay their fair share in taxes, or we’re going to have to ask seniors to pay more for Medicare. We can’t afford to do both.

Either we gut education and medical research, or we’ve got to reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies don’t get. We can’t afford to do both.

This is not class warfare. It’s math. The money is going to have to come from someplace. And if we’re not willing to ask those who’ve done extraordinarily well to help America close the deficit and we are trying to reach that same target of $4 trillion, then the logic, the math says everybody else has to do a whole lot more: We’ve got to put the entire burden on the middle class and the poor. We’ve got to scale back on the investments that have always helped our economy grow. We’ve got to settle for second-rate roads and second-rate bridges and second-rate airports, and schools that are crumbling.

That’s unacceptable to me. That’s unacceptable to the American people. And it will not happen on my watch. I will not support — I will not support — any plan that puts all the burden for closing our deficit on ordinary Americans. And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share. We are not going to have a one-sided deal that hurts the folks who are most vulnerable.

According to Jack Lew, Director of the Office of Management and Budget, taking the steps outlined in this plan would bring the country to a place, by 2017, where current spending is no longer adding to our debt, debt is falling as a share of the economy, and deficits are at a sustainable level.

You can read the entire proposal that was submitted to the Joint Committee or read an overview in this fact sheet

 

Full Text September 19, 2011: President Barack Obama’s Rose Garden Speech on Economy, American Jobs Act Introduces Deficit Reduction Plan, Including Tax Increases (Transcript)

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

POLITICAL QUOTES & SPEECHES

Doug Mills/The New York Times

President Obama discussed his deficit plan at the White House on Monday.

Remarks by the President on Economic Growth and Deficit Reduction

Source: WH, 9-19-11

Rose Garden

10:56 A.M. EDT

THE PRESIDENT:  Good morning, everybody.  Please have a seat.

A week ago today, I sent Congress the American Jobs Act.  It’s a plan that will lead to new jobs for teachers, for construction workers, for veterans, and for the unemployed.  It will cut taxes for every small business owner and virtually every working man and woman in America.  And the proposals in this jobs bill are the kinds that have been supported by Democrats and Republicans in the past.  So there shouldn’t be any reason for Congress to drag its feet.  They should pass it right away.  I’m ready to sign a bill.  I’ve got the pens all ready.

Now, as I said before, Congress should pass this bill knowing that every proposal is fully paid for.  The American Jobs Act will not add to our nation’s debt.  And today, I’m releasing a plan that details how to pay for the jobs bill while also paying down our debt over time.

And this is important, because the health of our economy depends in part on what we do right now to create the conditions where businesses can hire and middle-class families can feel a basic measure of economic security.  But in the long run, our prosperity also depends on our ability to pay down the massive debt we’ve accumulated over the past decade in a way that allows us to meet our responsibilities to each other and to the future.

During this past decade, profligate spending in Washington, tax cuts for multi-millionaires and billionaires, the cost of two wars, and the recession turned a record surplus into a yawning deficit, and that left us with a big pile of IOUs.  If we don’t act, that burden will ultimately fall on our children’s shoulders.  If we don’t act, the growing debt will eventually crowd out everything else, preventing us from investing in things like education, or sustaining programs like Medicare.

So Washington has to live within its means.  The government has to do what families across this country have been doing for years.  We have to cut what we can’t afford to pay for what really matters.  We need to invest in what will promote hiring and economic growth now while still providing the confidence that will come with a plan that reduces our deficits over the long-term.

These principles were at the heart of the deficit framework that I put forward in April.  It was an approach to shrink the deficit as a share of the economy, but not to do so so abruptly with spending cuts that would hamper growth or prevent us from helping small businesses and middle-class families get back on their feet.

It was an approach that said we need to go through the budget line-by-line looking for waste, without shortchanging education and basic scientific research and road construction, because those things are essential to our future.  And it was an approach that said we shouldn’t balance the budget on the backs of the poor and the middle class; that for us to solve this problem, everybody, including the wealthiest Americans and biggest corporations, have to pay their fair share.

Now, during the debt ceiling debate, I had hoped to negotiate a compromise with the Speaker of the House that fulfilled these principles and achieved the $4 trillion in deficit reduction that leaders in both parties have agreed we need — a grand bargain that would have strengthened our economy, instead of weakened it.  Unfortunately, the Speaker walked away from a balanced package.  What we agreed to instead wasn’t all that grand.  But it was a start — roughly $1 trillion in cuts to domestic spending and defense spending.

Everyone knows we have to do more, and a special joint committee of Congress is assigned to find more deficit reduction. So, today, I’m laying out a set of specific proposals to finish what we started this summer — proposals that live up to the principles I’ve talked about from the beginning.  It’s a plan that reduces our debt by more than $4 trillion, and achieves these savings in a way that is fair — by asking everybody to do their part so that no one has to bear too much of the burden on their own.

All told, this plan cuts $2 in spending for every dollar in new revenues.  In addition to the $1 trillion in spending that we’ve already cut from the budget, our plan makes additional spending cuts that need to happen if we’re to solve this problem. We reform agricultural subsidies — subsidies that a lot of times pay large farms for crops that they don’t grow.  We make modest adjustments to federal retirement programs.  We reduce by tens of billions of dollars the tax money that goes to Fannie Mae and Freddie Mac.  We also ask the largest financial firms — companies saved by tax dollars during the financial crisis — to repay the American people for every dime that we spent.  And we save an additional $1 trillion as we end the wars in Iraq and Afghanistan.

These savings are not only counted as part of our plan, but as part of the budget plan that nearly every Republican on the House voted for.

Finally, this plan includes structural reforms to reduce the cost of health care in programs like Medicare and Medicaid.  Keep in mind we’ve already included a number of reforms in the health care law, which will go a long way towards controlling these costs.  But we’re going to have to do a little more.  This plan reduces wasteful subsidies and erroneous payments while changing some incentives that often lead to excessive health care costs.  It makes prescriptions more affordable through faster approval of generic drugs.  We’ll work with governors to make Medicaid more efficient and more accountable.  And we’ll change the way we pay for health care.  Instead of just paying for procedures, providers will be paid more when they improve results — and such steps will save money and improve care.

These changes are phased in slowly to strengthen Medicare and Medicaid over time.  Because while we do need to reduce health care costs, I’m not going to allow that to be an excuse for turning Medicare into a voucher program that leaves seniors at the mercy of the insurance industry.  And I’m not going to stand for balancing the budget by denying or reducing health care for poor children or those with disabilities.  So we will reform Medicare and Medicaid, but we will not abandon the fundamental commitment that this country has kept for generations.

And by the way, that includes our commitment to Social Security.  I’ve said before, Social Security is not the primary cause of our deficits, but it does face long-term challenges as our country grows older.  And both parties are going to need to work together on a separate track to strengthen Social Security for our children and our grandchildren.

So this is how we can reduce spending:  by scouring the budget for every dime of waste and inefficiency, by reforming government spending, and by making modest adjustments to Medicare and Medicaid.  But all these reductions in spending, by themselves, will not solve our fiscal problems.  We can’t just cut our way out of this hole.  It’s going to take a balanced approach.  If we’re going to make spending cuts — many of which we wouldn’t make if we weren’t facing such large budget deficits — then it’s only right that we ask everyone to pay their fair share.

You know, last week, Speaker of the House John Boehner gave a speech about the economy.  And to his credit, he made the point that we can’t afford the kind of politics that says it’s “my way or the highway.”  I was encouraged by that.  Here’s the problem: In that same speech, he also came out against any plan to cut the deficit that includes any additional revenues whatsoever.  He said — I’m quoting him — there is “only one option.”  And that option and only option relies entirely on cuts.  That means slashing education, surrendering the research necessary to keep America’s technological edge in the 21st century, and allowing our critical public assets like highways and bridges and airports to get worse.  It would cripple our competiveness and our ability to win the jobs of the future.  And it would also mean asking sacrifice of seniors and the middle class and the poor, while asking nothing of the wealthiest Americans and biggest corporations.

So the Speaker says we can’t have it “my way or the highway,” and then basically says, my way — or the highway.  (Laughter.)  That’s not smart.  It’s not right.  If we’re going to meet our responsibilities, we have to do it together.

Now, I’m proposing real, serious cuts in spending.  When you include the $1 trillion in cuts I’ve already signed into law, these would be among the biggest cuts in spending in our history. But they’ve got to be part of a larger plan that’s balanced –- a plan that asks the most fortunate among us to pay their fair share, just like everybody else.

And that’s why this plan eliminates tax loopholes that primarily go to the wealthiest taxpayers and biggest corporations –- tax breaks that small businesses and middle-class families don’t get.  And if tax reform doesn’t get done, this plan asks the wealthiest Americans to go back to paying the same rates that they paid during the 1990s, before the Bush tax cuts.

I promise it’s not because anybody looks forward to the prospects of raising taxes or paying more taxes.  I don’t.  In fact, I’ve cut taxes for the middle class and for small businesses, and through the American Jobs Act, we’d cut taxes again to promote hiring and put more money into the pockets of people.  But we can’t afford these special lower rates for the wealthy -– rates, by the way, that were meant to be temporary.  Back when these first — these tax cuts, back in 2001, 2003, were being talked about, they were talked about temporary measures.  We can’t afford them when we’re running these big deficits.

Now, I am also ready to work with Democrats and Republicans to reform our entire tax code, to get rid of the decades of accumulated loopholes, special interest carve-outs, and other tax expenditures that stack the deck against small business owners and ordinary families who can’t afford Washington lobbyists or fancy accountants.  Our tax code is more than 10,000 pages long. If you stack up all the volumes, they’re almost five feet tall.  That means that how much you pay often depends less on what you make and more on how well you can game the system, and that’s especially true of the corporate tax code.

We’ve got one of the highest corporate tax rates in the world, but it’s riddled with exceptions and special interest loopholes.  So some companies get out paying a lot of taxes, while the rest of them end up having to foot the bill.  And this makes our entire economy less competitive and our country a less desirable place to do business.

That has to change.  Our tax code shouldn’t give an advantage to companies with the best-connected lobbyists.  It should give an advantage to companies that invest in the United States of America and create jobs in the United States of America.  And we can lower the corporate rate if we get rid of all these special deals.

So I am ready, I am eager, to work with Democrats and Republicans to reform the tax code to make it simpler, make it fairer, and make America more competitive.  But any reform plan will have to raise revenue to help close our deficit.  That has to be part of the formula.  And any reform should follow another simple principle:  Middle-class families shouldn’t pay higher taxes than millionaires and billionaires.  That’s pretty straightforward.  It’s hard to argue against that.  Warren Buffett’s secretary shouldn’t pay a higher tax rate than Warren Buffett.  There is no justification for it.

It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million.  Anybody who says we can’t change the tax code to correct that, anyone who has signed some pledge to protect every single tax loophole so long as they live, they should be called out.  They should have to defend that unfairness — explain why somebody who’s making  $50 million a year in the financial markets should be paying 15 percent on their taxes, when a teacher making $50,000 a year is paying more than that — paying a higher rate.  They ought to have to answer for it.  And if they’re pledged to keep that kind of unfairness in place, they should remember, the last time I checked the only pledge that really matters is the pledge we take to uphold the Constitution.

Now, we’re already hearing the usual defenders of these kinds of loopholes saying this is just “class warfare.”  I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare.  I think it’s just the right the thing to do.  I believe the American middle class, who’ve been pressured relentlessly for decades, believe it’s time that they were fought for as hard as the lobbyists and some lawmakers have fought to protect special treatment for billionaires and big corporations.

Nobody wants to punish success in America.  What’s great about this country is our belief that anyone can make it and everybody should be able to try -– the idea that any one of us can open a business or have an idea and make us millionaires or billionaires.  This is the land of opportunity.  That’s great.  All I’m saying is that those who have done well, including me, should pay our fair share in taxes to contribute to the nation that made our success possible.  We shouldn’t get a better deal than ordinary families get.  And I think most wealthy Americans would agree if they knew this would help us grow the economy and deal with the debt that threatens our future.

It comes down to this:  We have to prioritize.  Both parties agree that we need to reduce the deficit by the same amount — by $4 trillion.  So what choices are we going to make to reach that goal?  Either we ask the wealthiest Americans to pay their fair share in taxes, or we’re going to have to ask seniors to pay more for Medicare.  We can’t afford to do both.

Either we gut education and medical research, or we’ve got to reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies don’t get.  We can’t afford to do both.

This is not class warfare.  It’s math.  (Laughter.)  The money is going to have to come from someplace.  And if we’re not willing to ask those who’ve done extraordinarily well to help America close the deficit and we are trying to reach that same target of $4 trillion, then the logic, the math says everybody else has to do a whole lot more:  We’ve got to put the entire burden on the middle class and the poor.  We’ve got to scale back on the investments that have always helped our economy grow.  We’ve got to settle for second-rate roads and second-rate bridges and second-rate airports, and schools that are crumbling.

That’s unacceptable to me.  That’s unacceptable to the American people.  And it will not happen on my watch.  I will not support — I will not support — any plan that puts all the burden for closing our deficit on ordinary Americans.  And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share.  We are not going to have a one-sided deal that hurts the folks who are most vulnerable.

None of the changes I’m proposing are easy or politically convenient.  It’s always more popular to promise the moon and leave the bill for after the next election or the election after that.  That’s been true since our founding.  George Washington grappled with this problem.  He said, “Towards the payment of debts, there must be revenue; that to have revenue there must be taxes; [and] no taxes can be devised which are not more or less inconvenient and unpleasant.”  He understood that dealing with the debt is — these are his words — “always a choice of difficulties.”  But he also knew that public servants weren’t elected to do what was easy; they weren’t elected to do what was politically advantageous.  It’s our responsibility to put country before party.  It’s our responsibility to do what’s right for the future.

And that’s what this debate is about.  It’s not about numbers on a ledger; it’s not about figures on a spreadsheet.  It’s about the economic future of this country, and it’s about whether we will do what it takes to create jobs and growth and opportunity while facing up to the legacy of debt that threatens everything we’ve built over generations.

And it’s also about fairness.  It’s about whether we are, in fact, in this together, and we’re looking out for one another.  We know what’s right.  It’s time to do what’s right.

Thank you very much.  (Applause.)

END
11:16 A.M. EDT

Full Text US Economy in Crisis August 8, 2011: President Barack Obama’s Remarks to the Nation on S&P’s (Standard & Poor’s) Downgrade of the US Credit Rating from AAA to AA+ & Repercussions on the Economy

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

White House Photo, Samantha Appleton, 8/8/11

QUOTES

Remarks by the President

State Dining Room

1:52 P.M. EDT

THE PRESIDENT:  Good afternoon, everybody.  On Friday, we learned that the United States received a downgrade by one of the credit rating agencies — not so much because they doubt our ability to pay our debt if we make good decisions, but because after witnessing a month of wrangling over raising the debt ceiling, they doubted our political system’s ability to act.  The markets, on the other hand, continue to believe our credit status is AAA.  In fact, Warren Buffett, who knows a thing or two about good investments, said, “If there were a quadruple-A rating, I’d give the United States that.”  I, and most of the world’s investors, agree.

That doesn’t mean we don’t have a problem.  The fact is, we didn’t need a rating agency to tell us that we need a balanced, long-term approach to deficit reduction.  That was true last week.  That was true last year.  That was true the day I took office.  And we didn’t need a rating agency to tell us that the gridlock in Washington over the last several months has not been constructive, to say the least.  We knew from the outset that a prolonged debate over the debt ceiling — a debate where the threat of default was used as a bargaining chip — could do enormous damage to our economy and the world’s.  That threat, coming after a string of economic disruptions in Europe, Japan and the Middle East, has now roiled the markets and dampened consumer confidence and slowed the pace of recovery.

So all of this is a legitimate source of concern.  But here’s the good news:  Our problems are eminently solvable.*  And we know what we have to do to solve them.  With respect to debt, our problem is not confidence in our credit — the markets continue to reaffirm our credit as among the world’s safest.  Our challenge is the need to tackle our deficits over the long term.

Last week, we reached an agreement that will make historic cuts to defense and domestic spending.  But there’s not much further we can cut in either of those categories.  What we need to do now is combine those spending cuts with two additional steps:  tax reform that will ask those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare.

Making these reforms doesn’t require any radical steps.  What it does require is common sense and compromise.  There are plenty of good ideas about how to achieve long-term deficit reduction that doesn’t hamper economic growth right now.  Republicans and Democrats on the bipartisan fiscal commission that I set up put forth good proposals.  Republicans and Democrats in the Senate’s Gang of Six came up with some good proposals.  John Boehner and I came up with some good proposals when we came close to agreeing on a grand bargain.

So it’s not a lack of plans or policies that’s the problem here.  It’s a lack of political will in Washington.  It’s the insistence on drawing lines in the sand, a refusal to put what’s best for the country ahead of self-interest or party or ideology.  And that’s what we need to change.

I realize that after what we just went through, there’s some skepticism that Republicans and Democrats on the so-called super committee, this joint committee that’s been set up, will be able to reach a compromise, but my hope is that Friday’s news will give us a renewed sense of urgency.  I intend to present my own recommendations over the coming weeks on how we should proceed.  And that committee will have this administration’s full cooperation.  And I assure you, we will stay on it until we get the job done.

Of course, as worrisome as the issues of debt and deficits may be, the most immediate concern of most Americans, and of concern to the marketplace as well, is the issue of jobs and the slow pace of recovery coming out of the worst recession in our lifetimes.

And the good news here is that by coming together to deal with the long-term debt challenge, we would have more room to implement key proposals that can get the economy to grow faster.  Specifically, we should extend the payroll tax cut as soon as possible, so that workers have more money in their paychecks next year and businesses have more customers next year.

We should continue to make sure that if you’re one of the millions of Americans who’s out there looking for a job, you can get the unemployment insurance that your tax dollars contributed to.  That will also put money in people’s pockets and more customers in stores.

In fact, if Congress fails to extend the payroll tax cut and the unemployment insurance benefits that I’ve called for, it could mean 1 million fewer jobs and half a percent less growth.  This is something we can do immediately, something we can do as soon as Congress gets back.

We should also help companies that want to repair our roads and bridges and airports, so that thousands of construction workers who’ve been without a job for the last few years can get a paycheck again.  That will also help to spur economic growth.

These aren’t Democratic proposals.  These aren’t big government proposals.  These are all ideas that traditionally Republicans have agreed to, have agreed to countless times in the past.  There’s no reason we shouldn’t act on them now.  None.

I know we’re going through a tough time right now.  We’ve been going through a tough time for the last two and a half years.  And I know a lot of people are worried about the future.  But here’s what I also know:  There will always be economic factors that we can’t control –- earthquakes, spikes in oil prices, slowdowns in other parts of the world.  But how we respond to those tests — that’s entirely up to us.

Markets will rise and fall, but this is the United States of America.  No matter what some agency may say, we’ve always been and always will be a AAA country.  For all of the challenges we face, we continue to have the best universities, some of the most productive workers, the most innovative companies, the most adventurous entrepreneurs on Earth.  What sets us apart is that we’ve always not just had the capacity, but also the will to act — the determination to shape our future; the willingness in our democracy to work out our differences in a sensible way and to move forward, not just for this generation but for the next generation.

And we’re going to need to summon that spirit today.  The American people have been through so much over the last few years, dealing with the worst recession, the biggest financial crisis since the 1930s, and they’ve done it with grace.  And they’re working so hard to raise their families, and all they ask is that we work just as hard, here in this town, to make their lives a little easier.  That’s not too much to ask.  And ultimately, the reason I am so hopeful about our future — the reason I have faith in these United States of America — is because of the American people.  It’s because of their perseverance, and their courage, and their willingness to shoulder the burdens we face -– together, as one nation.

One last thing.  There is no one who embodies the qualities I mentioned more than the men and women of the United States Armed Forces.  And this weekend, we lost 30 of them when their helicopter crashed during a mission in Afghanistan.  And their loss is a stark reminder of the risks that our men and women in uniform take every single day on behalf of their county.  Day after day, night after night, they carry out missions like this in the face of enemy fire and grave danger.  And in this mission –- as in so many others -– they were also joined by Afghan troops, seven of whom lost their lives as well.

So I’ve spoken to our generals in the field, as well as President Karzai.  And I know that our troops will continue the hard work of transitioning to a stronger Afghan government and ensuring that Afghanistan is not a safe haven for terrorists.  We will press on.  And we will succeed.

But now is also a time to reflect on those we lost, and the sacrifices of all who serve, as well as their families.  These men and women put their lives on the line for the values that bind us together as a nation.  They come from different places, and their backgrounds and beliefs reflect the rich diversity of America.

But no matter what differences they might have as individuals, they serve this nation as a team.  They meet their responsibilities together.  And some of them — like the 30 Americans who were lost this weekend –- give their lives for their country.  Our responsibility is to ensure that their legacy is an America that reflects their courage, their commitment, and their sense of common purpose.

Thank you very much.

END  2:03 P.M. EDT

 

President Obama on Common Sense Steps to Grow the Economy

Souce: WH, 8-8-11
Download Video: mp4 (100MB) | mp3 (10MB)

This afternoon, while speaking to the press from the State Dining Room, President Obama addressed the news from Friday that the United States received a downgrade by one of the credit rating agencies:

The fact is, we didn’t need a rating agency to tell us that we need a balanced, long-term approach to deficit reduction.  That was true last week.  That was true last year.  That was true the day I took office.  And we didn’t need a rating agency to tell us that the gridlock in Washington over the last several months has not been constructive, to say the least.  We knew from the outset that a prolonged debate over the debt ceiling — a debate where the threat of default was used as a bargaining chip — could do enormous damage to our economy and the world’s.  That threat, coming after a string of economic disruptions in Europe, Japan and the Middle East, has now roiled the markets and dampened consumer confidence and slowed the pace of recovery.

The President discussed the need to tackle our deficits over the long term through tax reform that asks those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare. Though the issues of debt and deficits have dominated much of the recent conversation in Washington, the most immediate concern of most Americans is job creation and growing our economy. That is why President Obama laid out some common sense steps that can be taken right away to spur economic growth such as extending the payroll tax cut and unemployment insurance:

Specifically, we should extend the payroll tax cut as soon as possible, so that workers have more money in their paychecks next year and businesses have more customers next year.

We should continue to make sure that if you’re one of the millions of Americans who’s out there looking for a job, you can get the unemployment insurance that your tax dollars contributed to.  That will also put money in people’s pockets and more customers in stores.

In fact, if Congress fails to extend the payroll tax cut and the unemployment insurance benefits that I’ve called for, it could mean 1 million fewer jobs and half a percent less growth.  This is something we can do immediately, something we can do as soon as Congress gets back.

President Obama Delivers a Statement to the Press

President Barack Obama delivers a statement to the press in the State Dining Room of the White House, Aug. 8, 2011. (Official White House Photo by Chuck Kennedy)

Despite the economic hardship and challenges we face as a nation, the President is hopeful about our future:

No matter what some agency may say, we’ve always been and always will be a AAA country.  For all of the challenges we face, we continue to have the best universities, some of the most productive workers, the most innovative companies, the most adventurous entrepreneurs on Earth.  What sets us apart is that we’ve always not just had the capacity, but also the will to act — the determination to shape our future; the willingness in our democracy to work out our differences in a sensible way and to move forward, not just for this generation but for the next generation.

As the President said, there is no one who embodies these qualities of excellence more than our men and women in uniform. The President reflected on the 30 Americans who were lost in Afghanistan this weekend:

[N]ow is also a time to reflect on those we lost, and the sacrifices of all who serve, as well as their families.  These men and women put their lives on the line for the values that bind us together as a nation.  They come from different places, and their backgrounds and beliefs reflect the rich diversity of America.

But no matter what differences they might have as individuals, they serve this nation as a team.  They meet their responsibilities together.  And some of them — like the 30 Americans who were lost this weekend –- give their lives for their country.  Our responsibility is to ensure that their legacy is an America that reflects their courage, their commitment, and their sense of common purpose.

President Obama: Our Problems Are Eminently Solvable

Source: WH, 8-8-11

The President today outlined a series of steps Congress can take to quickly add momentum to our nation’s economic growth. Click on the links below to find out more about how each of these proposals can help propel our economy forward:

  • Extend the payroll tax cut so that middle class families have more money in their paychecks next year.  If you’ve got more money in your paycheck, you’re more likely to spend it, and that means businesses of all sizes will have more customers.  They’ll be in a better position to hire.

We also 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.

If Congress fails to extend the payroll tax and unemployment insurance it could mean one million fewer jobs and half a percent less growth.

  • Pass a bipartisan infrastructure bill. There are over a million construction workers out of work after the housing boom went bust, just as a lot of America needs rebuilding.  We can connect the two by helping private companies rebuild our roads and bridges and railways.
  • Pass the patent reform bill to give our entrepreneurs the chance to get their job-creating ideas to market faster by streamlining the patent process.
  • Pass the trade agreements that will help businesses sell more American-made goods and services to Asia and South America, supporting tens of thousands of jobs here at home.

Trade Adjustment Assistance Fact Sheet
South Korea Free Trade Agreement
Colombia Free Trade Agreement
Panama Free Trade Agreement

Full Text US Economy in Crisis August 6, 2011: Republican GOP Candidates React to S&P’s Downgrade of US Credit Rating from AAA to AA+

POLITICAL SPEECHES & DOCUMENTS

OBAMA PRESIDENCY & THE 112TH CONGRESS:

QUOTES

GOP candidates react to credit rating downgrade

Source: USA Today, 8-6-11
JON HUNTSMAN

“Out-of-control spending and a lack of leadership in Washington have resulted in President Obama presiding over the first downgrade of the United States credit rating in our history.

“For far too long we have let reckless government spending go unchecked and the cancerous debt afflicting our nation has spread.

“We need new leadership in Washington committed to fiscal responsibility, a balanced budget, and job-friendly policies to get America working again.”

MICHELE BACHMANN

“Tonight’s decision by S&P to downgrade our credit rating to AA+ is a historically significant and serious event for the United States. The United States has had a AAA credit rating since 1917.

“That rating has endured the great depression, World War II, Korea, Vietnam and the terrorist attacks on 9/11. This president has destroyed the credit rating of the United States through his failed economic policies and his inability to control government spending by raising the debt ceiling.

“We were warned by all of the credit agencies that a failure to deal with our debt would lead to a downgrade in our credit rating, but instead he submitted a budget that had a $1.5 trillion deficit and then requested a $2.4 trillion blank check. President Obama is destroying the foundations of the U.S. economy one beam at a time.

“I call on the president to seek the immediate resignation of Treasury Secretary Timothy Geithner and to submit a plan with list of cuts to balance the budget this year, turn our economy around and put Americans back to work.”

NEWT GINGRICH

“The Obama disaster continues,” he said in a Twitter message at 8:54 p.m. “Highest food stamp level and lowest credit rating in history in the same 24 hours.”

MITT ROMNEY

“America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy.

“Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama.

“His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating. Today, President Obama promised that ‘things will get better.’

“But it has become increasingly clear that the only way things will get better is with new leadership in the White House.”

HERMAN CAIN

“On Tuesday, April 19, 2011, Treasury Secretary Tim Geithner promised that America faced ‘no risk’ of a credit downgrading. Less than six months later, he is proven shamefully wrong. As I have feared for months, the S&P has chosen to downgrade America’s credit rating from AAA, which we have always enjoyed, to AA+.

“Perhaps this is because the Obama Administration and Congressional Democrats never once demonstrated a willingness to propose its own ideas for meaningful spending cuts, something credit agencies signaled were necessary to redeem America’s financial standing in the world.

“As a corporate executive, I’ve rescued companies from the brink of bankruptcy and returned them to profitability. That involved balancing budgets or even creating them in the first place, something that the Democratic leadership in Congress hasn’t done for 828 days. If I couldn’t run companies without budgets, how can the government?

“I also had to make tough budgetary cuts to save companies. Leadership is about doing what’s right, even when it’s difficult. But somehow, that sort of idea was never floated among those within the Obama Administration.

“Now, Americans are fearful for their retirements and for their children’s educational savings. This is a country known for dreamers and innovators, for thinkers and doers. And now, we are a nation living in fear.

“This is a sad day for America. Such a rating is unfitting of the greatest and most prosperous nation the world has ever known. And such a weak leader is, as well.”

RON PAUL

“We have just learned that for the first time in our history, the United States’ top credit rating has been downgraded by credit rating agency S&P.

“We were told by proponents of increasing the debt ceiling that a credit downgrade would come if we didn’t raise the limit, but the opposite was true.

“The ratings agencies had been warning us for some time that it is imperative upon the U.S. government to get its fiscal house in order and tackle its debt and deficit problem by taking serious steps.

“Unfortunately, the game in Washington has been one of partisan blaming and bipartisan out-of-control spending.

“America has been dealing with this severe economic crisis for years because the Washington establishment failed to focus on the true issues at hand: a declining dollar and out-of-control spending.

“Last November, millions of frustrated Americans let it be known that they wanted our debt crisis solved and our spending problem to end. They sent a group of new lawmakers to Washington to end business as usual.

“But the old crowd of elites still refuses to budge on doing everything it takes to get us out of this hole they’ve dug. Instead of real substantial budget cuts, we get minor or ‘fake’ cuts and budget tricks that may or may not happen far off into the future. We get a Congress that abdicates its responsibility to an unconstitutional ‘Super Congress’ with the power to make things worse than they already are.

“The American people realize that our nation can no longer afford to stay on this same path of reckless spending and follow the status quo of Washington. They will not tolerate any further ineffective stimulus schemes that do nothing to help our economy and actually do the opposite to the tune of trillions of dollars in money being spent and printed, and millions of people remaining unemployed and without much economic stability or security.

“If Washington refuses to take heed, there is little cause for optimism.

“Growing inflation, rising gasoline and food prices, and trillion-dollar budget deficits will all soon seem like minor issues if our nation does not immediately change our monetary and spending policies.

“We must take bold actions to reduce out-of-control government spending, and get the federal government out of the way of small business and entrepreneurs so that they can start hiring again.

“If elected President, I pledge to veto any unbalanced budget and to balance the federal budget in the first year of my term. I will fight to reduce taxes and remove unconstitutional regulations so that businesses can hire, Americans can get back to work, and our economy can truly recover.”

RICK SANTORUM

“If this downgrade holds, then it’s another example in a long line of examples of the President’s failure of leadership. Is anyone surprised at this point? There are 14 million people out of work and looking to the White House for answers – but they are receiving nothing but a blank stare.

“The markets are scared and the credit downgrade has happened because the President and this Congress continue to address the symptoms and not the disease.

“This nation is spending more money than it takes in and the world knows it – now, it’s time to show the world that the United States has the fortitude and resolve to pass a Balanced Budget Amendment to stop out of control spending and shrink the scope of government once and for all. The deal the President cut with Congress was supposed to avoid this downgrade but all it did was once again kick the can down the road.

“President Obama and his Administration have been a failure.

“I understand the US Treasury is going back to Standard and Poors to say that a two trillion dollar mathematical error by S&P contributed to the downgrade. So, in addition to blaming President Bush for all of its problems, now the White House is blaming S&P – but this happened on the President’s watch – and he has to deal with it. I guess President Obama is left to cling to the ‘hope’ that a mathematical error caused this. Is that the “hope” the President was talking about?

“Folks, an AA rating should be so far in our rear view mirror that no mathematical error should affect it.

“Tonight, I’m saddened for the millions out of work – but I’m hopeful that I will replace Barack Obama as President and get this country and its economy moving again.”

TIM PAWLENTY

“This is a sad moment for the United States, but it’s a reflection that our country is in trouble. President Obama is inept when it comes to creating the conditions or job creation and economic growth. It’s time for a new direction and a new President.”

“The S&P downgrade blemishes our free Republic’s revolutionary experiment in liberty and self-government; consequently, it heartens tyrants and terrorists.

THADDEUS MCCOTTER

“We must reject recriminations, and unite to squarely face and fully conquer the fiscal challenge that threatens our prosperity and security.

“For as this downgrade underscores, only by restructuring big government into citizen-government will we keep our nation the world’s leading economy and affirm American exceptionalism throughout the 21st Century.”

Political Buzz US Economy in Crisis, August 6, 2011: S&P (Standard & Poor’s) Downgrades United States Credit Rating from Coveted AAA to AA+ Friday After Debt Bill & Repeated Warnings — US has Maintained AAA Rating since 1917

POLITICAL BUZZ

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

OBAMA PRESIDENCY & THE 112TH CONGRESS:

S&P rating downgrade

These 15 countries (and the Isle of Man) have the world’s highest credit rating, AAA from both Moody’s and Standard & Poor’s. The U.S. lost that high standing Friday, when S&P downgraded it to a AA+ rating. (Note: New Zealand has also been downgraded from AAA to AA)

THE HEADLINES….

S&P downgrades U.S. credit rating: The United States credit rating was downgraded for the first time Friday night, after a bipartisan debt deal signed into law this week failed to assuage concerns about the nation’s growing spending, according to a person familiar with the matter.
Standard & Poor’s said it was reducing the U.S. credit rating from AAA to AA for the first time since it began assigning grades to countries in 1941. The credit rating agency warned several times this year that unless the government took steps to tame its debt, it could face a downgrade.

U.S. Long-Term Debt Downgraded by Standard & Poor’s: Standard & Poor’s removed the United States government from its list of risk-free borrowers on Friday night, citing concern about the rising burden of long-term federal debt.
The ratings agency had threatened the downgrade if the government did not act to reduce the federal debt by at least $4 trillion over the next decade. Earlier this week, Congress instead passed a plan to reduce the debt by at least $2.1 trillion.
Two other ratings agencies, Moody’s and Fitch, both have said that they have no immediate plan to downgrade the country’s credit rating, giving the government more time to make progress on debt reduction. The split verdict limits the impact of the S.&P. downgrade as many consequences would only be triggered by a reduction by at least two agencies.

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” — S&P

“The political brinkmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.”… – S&P

“The dysfunctional status of Washington has resulted in the first ever downgrade of the credit rating of the United States’ debt by Standard and Poor’s. Only time will tell whether this will have an adverse effect on prevailing interest rates paid on new U.S debt. If it does, it will only serve to compound our current economic challenges and longer-term fiscal outlook.” — Former Comptroller General David Walker.

“The action by S&P reaffirms the need for a balanced approach to deficit reduction that combines spending cuts with revenue-raising measures like closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners. This makes the work of the joint committee all the more important, and shows why leaders should appoint members who will approach the committee’s work with an open mind — instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S&P are demanding.” — Senate Majority Leader Harry Reid.

“This is a wake-up call for Washington to get serious about fixing our debt problem. Many of us have long argued that Congress must make the hard choices to address this issue immediately, and I can only hope this helps others in Washington and around the country understand our urgency. Substantial, meaningful reform that results in a pro-growth tax system, entitlement reforms and spending reductions must be implemented as soon as possible.” — Republican Sen. Chris Chambliss of Georgia.

“The deal Congress just passed over conservative objections has already had its obvious effect, the loss of America’s credibility around the world. The deal was not a serious attempt to solve our spending and debt problem, it was a political solution meant to kick the can down the road. The only real solution to our spending and debt crisis was Cut, Cap & Balance that the president rejected out of hand.” — Republican Sen. Jim DeMint of South Carolina.

“As S&P stated, ‘The transparency and accountability of institutions bear directly on sovereign creditworthiness because they reinforce the stability and predictability both of political institutions and the political framework.’ The American people are watching to see if the bipartisan Joint Committee will develop a plan to responsibly reduce the deficit in a balanced way while promoting economic growth and creating jobs.” — House Democratic leader Nancy Pelosi.

“Tonight’s decision by S&P to downgrade our credit rating to AA+ is a historically significant and serious event for the United States. The United States has had a AAA credit rating since 1917. That rating has endured the great depression, World War II, Korea, Vietnam and the terrorist attacks on 9/11. This president has destroyed the credit rating of the United States through his failed economic policies and his inability to control government spending by raising the debt ceiling.” — GOP presidential candidate Michelle Bachmann, a Minnesota congresswoman.

“America’s creditworthiness just became the latest casualty in President Obama’s failed record of leadership on the economy. Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama. His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating.” — GOP presidential candidate Mitt Romney, former Massachusetts governor.

    • GOP candidates react to credit rating downgrade: Standard & Poor’s, a major investment consulting agency, downgraded the United States from its top status on Friday night, saying that the dependability of US policy making had reached a significant low. … – USA Today, 7-29-11

AAA to AA+: Here come the battery jokes! — CNN Money, 8-6-11

“They’ve changed the US from AAA to AA. All this time and they didn’t realise they were using the wrong batteries.”…
“Until today I didn’t even know America ran on batteries, never mind what size.”…
“Until today I didn’t even know America ran on batteries, never mind what size.”…
“Caught a just downgraded AA+ 11-inch Maine bass. Gotta cross to Canada across lake for AAA fish!” — Economist Nouriel Roubini

    • Ouch! U.S. booted from Triple-A debt club CNN Money, 8-6-11
    • Barack Obama under fire as blame game follows US credit downgrade: Left and right turn on president, raising questions over his chances of winning the White House again… – Guardian, UK, 8-6-11
    • S&P downgrades US credit rating from AAA: The United States has lost its coveted top AAA credit rating. Credit rating agency Standard & Poor’s on Friday downgraded the nation’s rating for the first time since the U.S. won the top ranking in 1917. The move came after Congress haggled over budget cuts and the nation’s borrowing limit — and failed to cut enough government spending to satisfy S&P. The issue has contributed to convulsions in financial markets.
      The drop in the rating by one notch to AA-plus was expected. The three main credit agencies, which also include Moody’s Investor Service and Fitch, had warned during the budget fight that if Congress did not cut spending far enough, the country faced a downgrade. S&P said that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country’s debt situation. Moody’s said Friday it was keeping its AAA rating on the nation’s debt, but that it might still lower it…. – AP, 8-5-11
    • U.S. sources: S&P focused too much on debt-limit politics: Standard & Poor’s focused too much on the messy political process leading to a debt-limit hike and made a $2-trillion error in its calculations about U.S. finances, sources familiar with the discussions claimed on Friday night.
      The error was centered in the ratings agency’s estimates of discretionary spending and was pointed out by Treasury and it raised questions about S&P’s credibility, the sources said…. – Reuters, 8-5-11
    • S& P’s Analysis Was Flawed by $2 Trillion Error, Treasury Says: The Standard & Poor’s decision to downgrade the U.S. credit rating was flawed by a $2 trillion error, according to a Treasury Department spokesman.
      S& P lowered the nation’s AAA credit rating one level to AA+ yesterday, after warning on July 14 that it would reduce the ranking in the absence of a “credible” plan to lower deficits even if the nation’s $14.3 trillion debt limit were lifted. The outlook was kept as “negative.”
      The ratings company said that the deficit-cutting plan signed by President Barack Obama this week after months of wrangling with Congress falls short of what “would be necessary to stabilize the government’s medium-term debt dynamics.”
      The Treasury disagreed with S& P’s assessment and judged the analysis was carried out hastily, said a person familiar with the matter who declined to be identified because the discussions were private.
      The ratings firm erred in estimating discretionary spending levels at $2 trillion higher than what the Congressional Budget Office estimates, the person said…. – Bloomberg, 8-5-11
    • Obama briefed on S&P downgrade before leaving White House: President Barack Obama was briefed in advance on Friday on Standard & Poor’s intention to downgrade the United States’ top-notch AAA credit rating and has continued receiving updates from top aides, an administration official said.
      Obama left the White House for the Camp David presidential retreat outside Washington in late afternoon just hours before S&P’s announcement. “He was briefed before he left for Camp David and has been receiving updates through the night,” the official said…. – Reuters, 8-6-11
    • US loses AAA rating for first time: Standard & Poor’s has cut the US credit rating for the first time in history, saying the country’s politicians are increasingly unable to come to grips with its massive fiscal deficit and debt load.
      S&P cut the US rating from its top-flight triple-A one notch to AA+, and added a negative outlook to it, saying there was a chance it could be downgraded again within two years if progress is not made cutting the huge government budget gap. amp; It was the first time the US was downgraded since it received an AAA rating from Moody’s in 1917; it has held the S&P rating since 1941…. – AFP, 8-5-11
    • S&P Strips U.S. of Top Credit Rating: Unprecedented Downgrade Comes After Last-Minute Standoff; Treasury Says Decision Is ‘Flawed by a $2 Trillion Error’
      A cornerstone of the global financial system was shaken Friday when officials at ratings firm Standard & Poor’s said U.S. Treasury debt no longer deserved to be considered among the safest investments in the world.
      S&P removed for the first time the triple-A rating the U.S. has held for 70 years, saying the budget deal recently brokered in Washington didn’t do enough to address the gloomy long-term picture for America’s finances. It downgraded U.S. debt to AA+, a score that ranks below Liechtenstein and more than a dozen other countries, and on par with Belgium and New Zealand.
      The unprecedented move came after several hours of high-stakes drama. It began in the morning, when word leaked that a downgrade was imminent and stocks tumbled. Around 1:30 p.m., S&P officials notified the Treasury Department that they planned to downgrade U.S. debt and presented the government with their findings. Treasury officials noticed a $2 trillion error in S&P’s math that delayed an announcement for several hours. S&P officials decided to move ahead anyway, and after 8 p.m. they made their downgrade official…. – WSJ, 8-5-11
    • S& P downgrades U.S. credit rating for first time: Standard & Poor’s announced Friday night that it has downgraded the United States credit rating for the first time, dealing a huge symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.
      Lowering the nation’s rating one-notch below AAA, the credit rating company said “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” It said the bi-partisan agreement reached this week to find $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would have no luck achieving more savings later on.
      The decision came after a day of furious back-and-forth between the Obama administration and S&P. Government officials fought back hard, arguing that S&P made a flawed analysis of the potential for political agreement and had mathematical errors in its initial analysis, which was submitted to the Treasury earlier in the day. The analysis overstated the U.S. deficit over 10 years by $2 trillion. “A judgment flawed by a $2 trillion error speaks for itself,” a Treasury spokesperson said Friday…. – WaPo, 8-5-11
    • S&P Cuts US Credit Rating For First Time In Modern History: Standard & Poor’s took the unprecedented step of downgrading the U.S. government’s “AAA” sovereign credit rating Friday in a move that could send shock waves through global financial markets and potentially undermine world economic growth.
      In a press release, S&P, cut its top-notch long-term credit rating for the U.S. Treasury’s debt to AA+ with a negative outlook. It is the first time in modern history that one of the three main ratings firms has stripped the U.S. of its coveted AAA rating.
      S&P warned last month that if the U.S. government didn’t approve a credible medium-term plan to shrink its fiscal shortfall, it would downgrade the rating even if Congress approved a debt deal that raised the Treasury’s borrowing limit. On Tuesday, just in time for a deadline to avoid default, U.S. lawmakers passed a bill increasing the U.S. debt ceiling by $2.1 trillion. However, the amount of planned quid- pro-quo deficit cuts ran to $2.4 trillion, well short of the $4 trillion that S&P had suggested was needed to put the nation’s fiscal house in order.
      Some market participants have warned that the tepid pace of economic recovery means that even deeper fiscal cuts may be needed to reduce the share of public debt to U.S. gross domestic product, a closely watched gauge of a nation’s fiscal health…. – WSJ, 8-5-11
    • S&P downgrades U.S. credit rating: The agency says the level of cuts in the debt ceiling compromise ‘falls short’ and that intense partisanship in Washington hurts prospects for a solution.
      Standard & Poor’s downgraded the U.S. government’s credit rating Friday for the first time in history, saying the recent plan worked out to raise the federal debt ceiling “falls short” of what’s needed to stabilize the nation’s longer-term finances.
      The credit rating agency also said the partisan stalemate that put the U.S. on the brink of default this week did not bode well for efforts to reduce the nation’s soaring debt…. – LAT, 8-6-11

“On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency,” he said, referring to protracted negotiations on the US debt ceiling in which conservative Republicans insisted on deep budget cuts.
“it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?” — Liberal economist Paul Krugman, a Nobel Prize winner, in the New York Times

    • US media concerned over rating downgrade: US commentators have expressed concern on Standard & Poor’s decision to cut the US credit rating, with some blaming the setback on conservative Republicans…. – AP, 8-6-11

“No risk,” Timothy Geithner told Fox Business at the time. When asked whether S&P was wrong and that the U.S. would keep its top credit rating, Geithner said, “Absolutely”

    • Republicans Want Geithner to Walk The Plank After Credit Downgrade: With the U.S. losing its Triple-A credit rating for the first time ever, Republican lawmakers and presidential contenders are calling on President Obama to fire Treasury Secretary Timothy Geithner. Fox News, 8-6-11
    • After Downgrade, Debt Panel May Be Congress’s First Test: Friday’s downgrade of U.S. government debt raises pressure on a special “super committee” that lawmakers formed this week to try—once again—to reach a far-reaching budget deal. How Washington’s political culture responds to that charge could be one of the more important repercussions of the downgrade, outside the reactions of financial markets. And the special debt committee stands as the capital’s first test: Will lawmakers and the administration redouble their efforts to reach a broad budget-cutting deal or again descend into squabbles?… – WSJ, 8-6-11
    • S&P downgrade of US credit rating sends clear message to Congress: shape up: S&P, one of the three major credit-rating firms, downgraded its rating for US debt Friday night – a move that has the potential to further sppok global markets and drive up borrowing costs in the US. The reason for the downgrade, S&P said, was congressional dysfunction…. – CS Monitor, 8-6-11

“Americans expect to be No. 1 at everything… a great insult and humiliating to the country…. If this brings rising interest rates on credit cards and mortgages, it is going to send a political shockwave throughout the system, and there will definitely be a ‘throw-the-bums-out’ mentality.” — Republican strategist Ron Bonjean.

“Most people understand the inability to satisfy the bond-ratings agencies was not Obama’s alone… Congress gets much more than half of the blame for this. Blame generally falls on the president when something like this happens.” — Ross Baker, a political scientist at Rutgers University in New Brunswick, New Jersey

  • S&P Downgrade May Cloud Obama Re-Election Bid Even as It Damages Congress: The downgrade of the U.S.’s AAA credit rating by Standard &’ Poor’s darkens President Barack Obama’s re-election chances while also damaging members of Congress from both parties as they prepare for the 2012 campaign, political analysts said.
    With Obama’s job-approval rating at 48 percent and an all- time high of 82 percent of Americans giving Congress negative marks in a New York Times/CBS News Poll taken this week, the downgrade will hurt the president and lawmakers by fueling economic uncertainty, possibly raising interest rates and wounding national pride, analysts said.
    S&P’s move deals a blow to Obama’s political standing by giving Republican presidential candidates the chance to attack him for being the first U.S. president to preside over a downgrade, said Ross Baker, a political scientist at Rutgers University in New Brunswick, New Jersey…. Bloomberg, 8-6-11

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

POLITICAL SPEECHES & DOCUMENTS

THE HEADLINES: DEBT CEILING SHOWDOWN:

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

By PAUL RYAN

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.

ryan
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

Full Text Debt Ceiling Showdown, July 23, 2011: President Obama Discusses Coming to a Bipartisan Solution in his Weekly Address

POLITICAL SPEECHES & DOCUMENTS

DEBT CEILING SHOWDOWN: OBAMA VS CONGRESSIONAL LEADERS

President Barack Obama tapes his Weekly Address
White House Photo, Chuck Kennedy, 7/22/11

Weekly Address: A Bipartisan Approach to Strengthening the Economy

President Obama discusses the urgency of Democrats and Republicans coming together to take a balanced approach to cutting the deficit to strengthen our economy and secure our future.

Remarks of President Barack Obama Weekly Address Saturday, July 23, 2011 Washington, DC

For years, the government has spent more money than it takes in.  The result is a lot of debt on our nation’s credit card – debt that unless we act will weaken our economy, cause higher interest rates for families, and force us to scale back things like education and Medicare.

Now, folks in Washington like to blame one another for this problem.  But the truth is, neither party is blameless.  And both parties have a responsibility to do something about it.  Every day, families are figuring out how stretch their paychecks – struggling to cut what they can’t afford so they can pay for what’s really important.  It’s time for Washington to do the same thing.  But for that to happen, it means that Democrats and Republicans have to work together.  It means we need to put aside our differences to do what’s right for the country.  Everyone is going to have to be willing to compromise.  Otherwise, we’ll never get anything done.

That’s why we need a balanced approach to cutting the deficit.  We need an approach that goes after waste in the budget and gets rid of pet projects that cost billions of dollars.  We need an approach that makes some serious cuts to worthy programs – cuts I wouldn’t make under normal circumstances.  And we need an approach that asks everybody to do their part.

So that means, yes, we have to make serious budget cuts; but that it’s not right to ask middle class families to pay more for college before we ask the biggest corporations to pay their fair share of taxes.  It means that before we stop funding clean energy, we should ask oil companies and corporate jet owners to give up the tax breaks that other companies don’t get.  Before we cut medical research, we should ask hedge fund managers to stop paying taxes at a lower rate than their secretaries.  Before we ask seniors to pay more for Medicare, we should ask the wealthiest taxpayers to give up tax breaks we simply cannot afford under these circumstances.

That’s the heart of this approach: serious cuts, balanced by some new revenues.  And it’s been the position of every Democratic and Republican leader who has worked to reduce the deficit, from Bill Clinton to Ronald Reagan.  In fact, earlier this week, one of the most conservative members of the Senate, Tom Coburn, announced his support for a balanced, bipartisan plan that shows promise.  And then a funny thing happened.  He received a round of applause – from a group of Republican and Democratic senators.  That’s a rare event in Washington.

So there will be plenty of haggling over the details in the days ahead.  But this debate boils down to a simple choice.  We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future.  Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners, and achieve nothing.  Well, we know the right thing to do.  And we know what the American people expect us to do.

History Q&A: How Have Presidents Dealt with the Nation’s Debt & Deficit in the Past?

HISTORY Q & A

https://historymusings.files.wordpress.com/2011/07/hist_q-a.jpg

History Q&A: How Have Presidents Dealt with the Nation’s Debt & Deficit in the Past?

Room for Debate: Presidents and Their Debts, F.D.R. to Bush

Source: NYT, 7-21-11

Introduction

Reagan, Nixon, Johnson and F.D.R.Associated Press Clockwise from top left: Ronald Reagan and James Baker in 1988; Richard Nixon, who would later call himself a Keynesian, with Milton Friedman in 1968; Lyndon Johnson, signing Medicare into law in 1965, with Harry Truman by his side; and Franklin Roosevelt signing Social Security into law in 1935.

Polls show that most Americans are disgusted at the standoff in Washington over the nation’s debt. Aren’t they used to this by now? After all, battles over federal borrowing and spending go back to George Washington. Yet each era’s debates and decisions change the stage for the challenges to come.

We asked some prominent historians for their perspective on the background to the current drama, as the clock ticks down on negotiations to keep the nation from falling into default. What evolution in the role of the two parties do we see? How have deficits affected a president’s ideology, and vice versa? What are the important historical markers?

 Read the Discussion »

Debaters

Larry Schweikart: Founders & Debt — Would Want ‘Our Fiscal House in Order’

HISTORY BUZZ: HISTORY NEWS RECAP

History Buzz

If America’s Founding Fathers were clear on anything, it was that deficits could not be tolerated, says best-selling author and political historian Larry Schweikart. So what would the founders say about the current economy and crushing U.S. debt?

“The founders were very clear on issues of debt,” Schweikart says, “so certainly they would want to see our fiscal house in order.”  The debt crisis is only one symptom of a nation that is more divided now than “at the time of the Civil War,” Schweikart says. “It is very deeply divided. And it’s more divided than, I think, at the time of the Civil War, though less likely to involve violence because it’s not sectional in nature. But the divisions involve a large segment of people who became heavily dependent on the government, especially the federal government, for their daily existence,” he points out….READ MORE

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