WASHINGTON (Reuters) - President Barack Obama on Tuesday spelled out that his upcoming budget will seek a “responsible” path to reducing U.S. debts over time, while lawmakers pushed for a summit to tackle the problem.
Obama discussed “tough choices” with his cabinet to be laid out in the administration’s budget proposal for 2012, alongside investment he wants to spur hiring and growth.
“Beyond simply reducing government spending, the president emphasized the need to reform and reorganize the government so it operates smarter and more efficiently,” the White House said in a readout of the cabinet meeting.
On Capitol Hill, Senate Budget Committee Chairman Kent Conrad repeated his call for a White House-Congress summit on long-term deficit reduction. He cautioned that his committee might have to craft one on its own if this option was ignored.
Obama is anxious that any steps to confront the country’s fiscal challenges do not undermine a fragile U.S. economic recovery amid unemployment stuck above 9 percent.
The budget will be released on February 14 and “will provide a responsible 10-year path for reining in the deficit,” Obama told his cabinet. The budget covers a period of 10 years.
Action is needed to tackle a budget deficit estimated at $1.48 trillion in fiscal 2011 — or 9.8 percent of the U.S. economy — which is adding to the towering national debt.
Republicans, who won control of the House of Representatives in November elections after campaigning for sterner steps to control spending, warned that the White House may not go far enough.
The federal debt is expected to hit a $14.3 trillion ceiling imposed by Congress by the end of March.
Republicans are expected to seek concessions from Obama’s Democrats in return for voting to raise the borrowing limit, which is necessary to avoid a damaging default by the U.S. government.
A summit, Conrad said, should get under way before Congress debates a debt limit increase “because it’s risky to use the debt limit as leverage because of our standing in global financial markets.”
Conrad has said he would not support a long-term increase in U.S. borrowing authority if there was no progress toward reducing long-term budget deficits. That would leave open the possibility of Congress considering one or more short-term, stop-gap debt ceiling increases.
Senator Jeff Sessions, the senior Republican on the Senate Budget Committee, told Reuters that “you absolutely could do that” and that he would support such a short-term hike “as long as there are serious discussions” on long-term spending cuts.
Additional reporting by Rachelle Younglai; Editing by Sandra Maler and Christopher Wilson