Top Obama aide: White House open to "balanced" debt deal

WASHINGTON Wed Jun 6, 2012 4:55pm EDT

White House senior economic adviser Gene Sperling speaks at the 2011 Fiscal Summit on Solutions for America's future in Washington May 25, 2011. The Obama administration wants revenue growth to help cut the $1.4 trillion U.S. deficit not as a means of ''class warfare'' but to ensure shared sacrifice, White House senior economic adviser Gene Sperling said on Wednesday. REUTERS/Jason Reed

White House senior economic adviser Gene Sperling speaks at the 2011 Fiscal Summit on Solutions for America's future in Washington May 25, 2011. The Obama administration wants revenue growth to help cut the $1.4 trillion U.S. deficit not as a means of ''class warfare'' but to ensure shared sacrifice, White House senior economic adviser Gene Sperling said on Wednesday.

Credit: Reuters/Jason Reed

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WASHINGTON (Reuters) - A top economic aide to President Barack Obama on Wednesday reiterated the administration was open to a sweeping deal to slow the rise in U.S. debt, provided that it was "balanced" and included tax revenues as well as spending cuts.

Wading into the debate over the country's looming 'fiscal cliff' amid calls for Obama to extend Bush-era tax cuts for wealthier Americans, White House National Economic Council Director Gene Sperling said the sacrifice must be broad-based.

"There is no reason that we as a country should not be able to come together on a balanced grand compromise," he said in prepared remarks to the Economic Club of New York.

But, he said that any deal must include "smart long-term entitlement savings, revenues from those who are most able to contribute, immediate support for jobs and the recovery, combined with a serious plan to bring down and stabilize our debt as a percentage of GDP (gross domestic product)."

Concerns about the durability of the U.S. economic recovery have boosted calls for Obama to extend Bush-era tax cuts for households making more than $250,000 a year.

Without action, they will expire at midnight on December 31. The White House says Obama continues to oppose extending those tax breaks, but does want to make existing tax cuts permanent for less affluent families.

However, the expiration of the tax breaks coincides with automatic spending cuts agreed by Republicans and Obama's Democrats under a pact to lift the nation's borrowing limit. That amounts to a 'fiscal cliff' that economists say will stunt U.S. growth unless Congress cuts some sort of deal on the debt.

Some analysts also expect that the debt limit could be reached before the end of the year, setting up another fight. Sperling said that the threat of forcing the country into a devastating default should never be brandished again.

"Few things could be as harmful to America's financial standing than an annual spectacle or annual countdown clock to whether or not America will be at risk of default," he said. "The era of threatening default by anyone of any party for any reason must be over."

(Reporting By Alister Bull; Editing by Eric Walsh)

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Comments (2)
USAPragmatist wrote:
To me it is obvious Obama has been trying to get a balanced deal, unfortunately he has to compromise with people who have repeatedly said that compromise is a dirty word. But thankfully Obama seems to be smart enough to not let these tactics work and not give them everything they want, Spending cuts in everything but defense and no revenue increases. When in actuality the only way the ‘debt problem’ (not really a problem yet) can be solved is a 3 pronged attack on defense spending, tax code overhaul to bring in more revenue and not let the top earners get away with paying less and ‘entitlement’ (not really an entitlement since everyone pays into it) reform. Yet the current GOP will only talk about 1 of the 3.

Jun 06, 2012 5:22pm EDT  --  Report as abuse
Sensibility wrote:
A debt deal should be the easiest thing in the world. Republicans give defense cuts, Democrats make the Bush tax cuts permanent, and both sides agree to cut corporate welfare and tax loopholes, especially for corporations. Democrats can call these improvements “revenue gains” and Republicans can call them “tax cuts”, both sides can claim victory and the whole country would be better off. But, as usual, sanity is wishful thinking in Washington.

Obama is reading the tea leaves. He knows he has no achievements to run on in 2012, and his negative campaign is failing to gain traction. So there’s nothing left to do but try to appear to be a grown up and actually do the job he was elected to do in 2008. It’s very sad that compromise is a last resort for this President.

But nothing can spoil the day because Walker is the governor of Wisconsin. That’s a win for both Republicans and Democrats, and indeed the whole country. The Democrats just don’t realize it yet.

Jun 06, 2012 6:42pm EDT  --  Report as abuse
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