Obama set to make ‘tough decisions’ to get debt deal done

REUTERS/Larry Downing

U.S. President Barack Obama holds a news conference in the Brady Press Briefing Room at the White House in Washington July 15, 2011.

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Postmedia News Jul 15, 2011 – 11:50 AM ET

By Sheldon Alberts
Postmedia News Washington Correspondent

WASHINGTON — U.S. President Barack Obama on Friday said he has given Republican leaders in Congress another 24 to 36 hours to present him a plan to reduce the U.S. deficit, in the hopes of staving off a calamitous default on America’s debt early next month.

“If they show me a serious plan, I am ready to move, even if it requires some tough decisions on my part,” Obama said at a White House news conference.

“We have a unique opportunity to do something big. We have a chance to stabilize America’s finances for a decade, for 15 years, for 20 years.”

The U.S. is facing an Aug. 2 deadline to pass legislation to raise its statutory debt ceiling, currently set at $14.3-trillion, or be unable to borrow more money to pay its bills. At the same time, Obama and congressional leaders are trying to strike a long-term deal to reduce the country’s debt and deficit.

Obama said there must be “shared sacrifice” from Republicans and Democrats, saying he is prepared to negotiate changes to costly entitlement programs but that tax increases for wealthy Americans must be on the table.

“Millionaires and billionaires can afford to do a little bit more,” Obama said.

As part of a deal, Obama said he has offered to lower U.S. government spending to the lowest percentage of the American economy since the era of president Dwight Eisenhower.

Obama said it is in America’s best interest to pass a comprehensive debt-reduction plan in tandem with an agreement to raise the U.S. debt ceiling. His least favourite option in negotiations is a deal to only increase the U.S. borrowing limit. Without an accompanying plan for the U.S. to live within its means, “This issue is going to continue to plague us for months and years to come,” he said.

“I am still pushing for us to achieve a big deal … but if we can’t do the biggest deal possible then let’s still be ambitious, let’s still try to get a down payment on deficit reduction.”

Obama had met with Republican and Democrat leaders in Congress for five consecutive days before Friday, without major progress toward an agreement. No meetings were planned for Friday, but Obama said he remained hopeful “we can get this logjam broken” over the weekend.

He downplayed reports of personal tension between him and senior Republican leaders, particularly House Majority leader Eric Cantor, who said the U.S. president stormed out of a meeting earlier this week.

“This notion that things got ugly is just not true,” Obama said.

“The American people are not interested in the reality TV aspects of who said what, and did somebody’s feelings get hurt. … It’s not something folks out in the country are obsessing about.”

Two major credit rating agencies — Moody’s and Standard & Poor’s — have U.S. on review for a possible downgrade of its debt amid concerns a deal won’t get done in time for the government to make interest payments in early August.

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