Daily Tax Update - July 11, 2011: Obama: Time To "Do Something Meaningful" On Deficit

OBAMA:  TIME TO "DO SOMETHING MEANINGFUL" ON DEFICIT:  Today, President Obama held a news conference and urged lawmakers to "do something meaningful" about the nation’s deficit.  The President said, "Now is the time to deal with these issues.  If not now, when?"  The President continued, "I’m willing to move in their [Republicans'] direction in order to get something done.  I'm prepared to take on significant heat from my own party to get something done."  The President added, "There's going to be resistance.  There is, frankly, resistance on my side to do anything on entitlements.  There is strong resistance on the Republican side to do anything on revenues.  But if each side takes a maximalist position, if each side wants 100 percent of what its, you know, ideological predispositions are, then we can't get anything done."  The President continued, "And let me just . . . comment on this whole issue of tax increases, because there's been a lot of information floating around there. I want to be crystal clear -- nobody has talked about increasing taxes now. Nobody has talked about increases --increasing taxes next year. What we have talked about is that starting in 2013, that we have gotten rid of some of these egregious loopholes that are benefiting corporate jet owners or oil companies at a time where they're making billions of dollars of profits. What we have said is as part of a broader package we should have revenues, and the best place to get those revenues are from folks like me who have been extraordinarily fortunate, and that millionaires and billionaires can afford to pay a little bit more -- going back to the Bush tax rates. And what I've also said to Republicans is, if you don't like that formulation, then I'm happy to work with you on tax reform that could potentially lower everybody's rates and broaden the base, as long as that package was sufficiently progressive so that we weren’t balancing the budget on the backs of middle-class families and working-class families, and we weren’t letting hedge fund managers or authors of best-selling books off the hook."

  • Obama reiterated that he would reject a stop-gap solution that would force Congress to raise the debt ceiling again before the 2012 elections saying:  "I will not sign a 30 day or a 60 day or a 90 day extension."  The President added that a deal would have to include "revenue components" that "would target folks who can most afford it."
  • After the President’s press conference today, House Majority Leader Eric Cantor said, "The commitment for us, again, in our pledge is we’re not raising taxes, so it’s got to be net revenue-neutral."  Cantor added, "We don’t believe that we ought to be raising taxes right now on people in this recession and in this economy, and they do.  That is just an irreconcilable difference, and if the president wants the debt ceiling, we’re not going to go along with that if they want to raise taxes, and it just is what it is."
  • Treasury Secretary Timothy Geithner said yesterday that a failure to raise the debt ceiling by August 2 would be "catastrophic" to the economy.  Geithner said, "If that happens, you're going to see catastrophic damage across the American economy and across the global economy."  He added, "There is no credible way to give Congress more time.  They have to act by the 2nd."  Geithner expressed optimism that an agreement would be reached, "The United States is not going to default.  We're going to meet our obligations."
  • The President’s remarks can be accessed here.

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