Negotiations
on Debt Ceiling Break Down
TEXT OF LETTER from Speaker John Boehner
July 22, 2011
Dear Colleague,
Our economy is not creating enough jobs,
and the policies coming out
of Washington are a big reason why. Because of Washington, we
have a
tax code that is stifling job creation. Because of Washington, we
have
a debt crisis that is sowing uncertainty and sapping the confidence of
small businesses. Because of Washington, our children are
financing a
government spending binge that is jeopardizing their future.
Since the moment I became Speaker, I’ve
urged President Obama to
lock arms with me and seize this moment to do something significant to
address these challenges. I’ve urged him to partner with
congressional
Republicans to do something dramatic to change the fiscal trajectory of
our country . . . something that will boost confidence in our economy,
renew a measure of faith in our institutions of government, and help
small businesses get back to creating jobs.
The House this week passed such a plan . .
. the Cut, Cap & Balance Act, which passed the House with
bipartisan support.
Along with Majority Leader Cantor, I have
also engaged the president
in a dialogue in recent days. The purpose of this dialogue was to
see
if we could identify a path forward that would implement the principles
of Cut, Cap, & Balance in a manner that could secure bipartisan
support and be signed into law.
During these discussions -- as in my
earlier discussions -- it became
evident that the White House is simply not serious about ending the
spending binge that is destroying jobs and endangering our children’s
future.
A deal was never reached, and was never
really close.
In the end, we couldn’t connect. Not
because of different personalities, but because of different visions
for our country.
The president is emphatic that taxes have
to be raised. As a former small businessman, I know tax increases
destroy jobs.
The president is adamant that we cannot
make fundamental changes to
our entitlement programs. As the father of two daughters, I know
these
programs won’t be there for their generation unless significant action
is taken now.
For these reasons, I have decided to end
discussions with the White
House and begin conversations with the leaders of the Senate in an
effort to find a path forward.
The Democratic leaders of the House and
Senate have not been
participants in the conversations I and Leader Cantor have had with the
White House; nor have the Republican leaders of the Senate. But I
believe there is a shared commitment on both sides of the aisle to
producing legislation that will serve the best interests of our country
in the days ahead -- legislation that reflects the will of the American
people, consistent with the principles of the Cut, Cap, & Balance
Act that passed the House with bipartisan support this week.
I wanted to alert you to these
developments as soon as possible.
Further information will be coming as soon as it is available. It
is an
honor to serve with you. Together, we will do everything in our
power
to end the spending binge in Washington and help our economy get back
to creating jobs.
Sincerely
John Boehner
President
Barack Obama
Press
Conference
James
S. Brady Press Briefing Room
The
White House
July 22, 2011
[WHITE HOUSE TRANSCRIPT]
6:06 P.M. EDT
THE PRESIDENT: Good evening, everybody. I wanted to give
you an
update on the current situation around the debt ceiling. I just
got a
call about a half hour ago from Speaker Boehner who indicated that he
was going to be walking away from the negotiations that we’ve been
engaged in here at the White House for a big deficit reduction and debt
reduction package. And I thought it would be useful for me to
just
give you some insight into where we were and why I think that we should
have moved forward with a big deal.
Essentially
what we had offered Speaker Boehner was over a trillion dollars in cuts
to discretionary spending, both domestic and defense. We then
offered
an additional $650 billion in cuts to entitlement programs -- Medicare,
Medicaid, Social Security. We believed that it was possible to
shape
those in a way that preserved the integrity of the system, made them
available for the next generation, and did not affect current
beneficiaries in an adverse way.
In addition, what we sought was revenues that were actually less than
what the Gang of Six signed off on. So you had a bipartisan group
of
senators, including Republicans who are in leadership in the Senate,
calling for what effectively was about $2 trillion above the Republican
baseline that they’ve been working off of. What we said was give
us
$1.2 trillion in additional revenues, which could be accomplished
without hiking taxes -- tax rates, but could simply be accomplished by
eliminating loopholes, eliminating some deductions and engaging in a
tax reform process that could have lowered rates generally while
broadening the base.
So let me reiterate what we were offering. We were offering a
deal
that called for as much discretionary savings as the Gang of Six.
We
were calling for taxes that were less than what the Gang of Six had
proposed. And we were calling for modifications to entitlement
programs, would have saved just as much over the 10-year window.
In
other words, this was an extraordinarily fair deal. If it was
unbalanced, it was unbalanced in the direction of not enough revenue.
But in the interest of being serious about deficit reduction, I was
willing to take a lot of heat from my party -- and I spoke to
Democratic leaders yesterday, and although they didn’t sign off on a
plan, they were willing to engage in serious negotiations, despite a
lot of heat from a lot of interest groups around the country, in order
to make sure that we actually dealt with this problem.
It is hard to understand why Speaker Boehner would walk away from this
kind of deal. And, frankly, if you look at commentary out there,
there
are a lot of Republicans that are puzzled as to why it couldn’t get
done. In fact, there are a lot of Republican voters out there who
are
puzzled as to why it couldn’t get done. Because the fact of the matter
is the vast majority of the American people believe we should have a
balanced approach.
Now, if you do not have any revenues, as the most recent Republican
plan that’s been put forward both in the House and the Senate proposed,
if you have no revenues at all, what that means is more of a burden on
seniors, more drastic cuts to education, more drastic cuts to research,
a bigger burden on services that are going to middle-class families all
across the country. And it essentially asks nothing of corporate
jet
owners, it asks nothing of oil and gas companies, it asks nothing from
folks like me who’ve done extremely well and can afford to do a little
bit more.
In other words, if you don’t have revenues, the entire thing ends up
being tilted on the backs of the poor and middle-class families.
And
the majority of Americans don’t agree on that approach.
So here’s what we’re going to do. We have now run out of
time. I told
Speaker Boehner, I’ve told Democratic Leader Nancy Pelosi, I’ve told
Harry Reid, and I’ve told Mitch McConnell I want them here at 11:00
a.m. tomorrow. We have run out of time. And they are going to
have to
explain to me how it is that we are going to avoid default. And
they
can come up with any plans that they want and bring them up here and we
will work on them. The only bottom line that I have is that we
have to
extend this debt ceiling through the next election, into 2013.
And the reason for it is we’ve now seen how difficult it is to get any
kind of deal done. The economy is already weakened. And the
notion
that five or six or eight months from now we’ll be in a better position
to try to solve this problem makes no sense.
In addition, if we can’t come up with a serious plan for actual deficit
and debt reduction, and all we’re doing is extending the debt ceiling
for another six, seven, eight months, then the probabilities of
downgrading U.S. credit are increased, and that will be an additional
cloud over the economy and make it more difficult for us and more
difficult for businesses to create jobs that the American people so
desperately need.
So they will come down here at 11:00 a.m. tomorrow. I expect them
to
have an answer in terms of how they intend to get this thing done over
the course of the next week. The American people expect
action. I
continue to believe that a package that is balanced and actually has
serious debt and deficit reduction is the right way to go. And
the
American people I think are fed up with political posturing and an
inability for politicians to take responsible action as opposed to
dodge their responsibilities.
With that, I’m going to take some
questions.
Ben.
Q Thank you, Mr. President. You said you want
the leaders back here
at 11:00 a.m. to give you an answer about the path forward. What
is
your answer about the path forward? What path do you prefer,
given
what’s just happened? And also, sir, quickly, what does this say
about
your relationship with Speaker Boehner?
THE PRESIDENT: Well, with respect to my relationship with Speaker
Boehner, we’ve always had a cordial relationship. We had very
intense
negotiations -- I’m going to have my team brief you exactly on how
these negotiations proceeded. Up until sometime early today when
I
couldn’t get a phone call returned, my expectation was that Speaker
Boehner was going to be willing to go to his caucus and ask them to do
the tough thing but the right thing. I think it has proven
difficult
for Speaker Boehner to do that. I’ve been left at the altar now a
couple of times.
And
I think that one of the questions that the Republican Party is going to
have to ask itself is can they say yes to anything? Can they say
yes
to anything? I mean, keep in mind it’s the Republican Party that
has
said that the single most important thing facing our country is
deficits and debts. We’ve now put forward a package that would
significantly cut deficits and debt. It would be the biggest debt
reduction package that we’ve seen in a very long time.
And
it’s accomplished without raising individual tax rates. It’s
accomplished in a way that’s compatible with the “no tax” pledge that a
whole bunch of these folks signed on to -- because we were mindful that
they had boxed themselves in and we tried to find a way for them to
generate revenues in a way that did not put them in a bad spot.
And
so the question is, what can you say yes to? Now, if their only
answer
is what they’ve presented, which is a package that would effectively
require massive cuts to Social Security, to Medicare, to domestic
spending, with no revenues whatsoever, not asking anything from the
wealthiest in this country or corporations that have been making record
profits -- if that’s their only answer, then it’s going to be pretty
difficult for us to figure out where to go. Because the fact of
the
matter is that’s what the American people are looking for, is some
compromise, some willingness to put partisanship aside, some
willingness to ignore talk radio or ignore activists in our respective
bases, and do the right thing.
And
to their credit, Nancy Pelosi, Harry Reid, the Democratic leadership,
they sure did not like the plan that we are proposing to Boehner, but
they were at least willing to engage in a conversation because they
understood how important it is for us to actually solve this
problem.
And so far I have not seen the capacity of the House Republicans in
particular to make those tough decisions.
And
so then the question becomes, where’s the leadership? Or,
alternatively, how serious are you actually about debt and deficit
reduction? Or do you simply want it as a campaign ploy going into
the
next election?
Now,
in terms of where we go next, here’s the one thing that we’ve got to
do. At minimum, we’ve got to increase the debt ceiling. At
minimum.
I think we need to do more than that. But as I’ve said before,
Republican Leader McConnell in the Senate put forward a plan that said
he’s going to go ahead and give me the responsibility to raise the debt
ceiling. That way folks in Congress can vote against it, but at
least
it gets done. I’m willing to take the responsibility.
That’s my job.
So if they want to give me the responsibility to do it, I’m happy to do
it.
But
what we’re not going to do is to continue to play games and string this
along for another eight, nine months, and then have to go through this
whole exercise all over again. That we’re not going to do.
Jessica Yellin.
Q
Standing here tonight, Mr. President, can you assure the American
people that they will get their Social Security checks on August
3rd?
And if not, who’s to blame?
THE
PRESIDENT: Well, when it comes to all the checks, not just Social
Security -- veterans, people with disabilities -- about 70 million
checks are sent out each month -- if we default then we’re going to
have to make adjustments. And I’m already consulting with
Secretary
Geithner in terms of what the consequences would be.
We
should not even be in that kind of scenario. And if Congress --
and in
particular, the House Republicans -- are not willing to make sure that
we avoid default, then I think it’s fair to say that they would have to
take responsibility for whatever problems arise in those
payments.
Because, let me repeat, I’m not interested in finger-pointing and I’m
not interested in blame, but I just want the facts to speak for
themselves.
We
have put forward a plan that is more generous to Republican concerns
than a bipartisan plan that was supported by a number of Republican
senators, including at least one that is in Republican leadership in
the Senate. Now, I’ll leave it up to the American people to make
a
determination as to how fair that is. And if the leadership
cannot
come to an agreement in terms of how we move forward, then I think they
will hold all of us accountable.
But
that shouldn’t even be an option. That should not be an
option. I’m
getting letters from people who write me and say, at the end of every
month I have to skip meals. Senior citizens on Social Security
who are
just hanging on by a thread. Folks who have severe disabilities
who
are desperate every single month to try to figure out how they’re going
to make ends meet. But it’s not just those folks. You’ve
got business
contractors who are providing services to the federal government, who
have to wonder are they going to be able to get paid and what does that
do in terms of their payrolls.
You’ve
got just a huge number of people who, in one way or another, interact
with the federal government. And even if you don’t, even if
you’re not
a recipient of Social Security, even if you don’t get veterans’
benefits or disabilities, imagine what that does to the economy when
suddenly 70 million checks are put at risk. I mean, if you’re a
business out there, that is not going to be good for economic
growth.
And that’s the number one concern of the American people.
So we’ve got to get it done. It is not an option not to do it.
Q And your degree of confidence?
THE
PRESIDENT: I am confident simply because I cannot believe that
Congress would end up being that irresponsible that they would not send
a package that avoids a self-inflicted wound to the economy at a time
when things are so difficult.
Scott Horsley.
Q
Mr. President, can you explain why you were offering a deal that was
more generous than the Gang of Six, which you seemed to be embracing on
Tuesday when you were here?
THE
PRESIDENT: Because what had become apparent was that Speaker
Boehner
had some difficulty in his caucus. There are a group of his
caucus
that actually think default would be okay and have said that they would
not vote for increasing the debt ceiling under any circumstances.
And
so I understand how they get themselves stirred up and the sharp
ideological lines that they’ve drawn. And ultimately, my
responsibility is to make sure that we avoid extraordinary difficulties
to American people and American businesses.
And
so, unfortunately, when you’re in these negotiations you don’t get 100
percent of what you want. You may not even get 60 or 70 percent
of
what you want. But I was willing to try to persuade Democratic
leadership as well as Democratic members of Congress that even a deal
that is not as balanced as I think it should be is better than no deal
at all. And I was willing to persuade Democrats that getting a
handle
on debt and deficit reduction is important to Democrats just as much as
it’s important to Republicans -- and, frankly, a lot of Democrats are
persuaded by that.
As
I said in the last press conference, if you’re a progressive you should
want to get our fiscal house in order, because once we do, it allows us
to then have a serious conversation about the investments that we need
to make -- like infrastructure, like rebuilding our roads and our
bridges and airports, like investing more in college education, like
making sure that we’re focused on the kinds of research and technology
that’s going to help us win the future. It’s a lot easier to do
that
when we’ve got our fiscal house in order. And that was an
argument
that I was willing to go out and make to a lot of skeptical Democrats,
as you saw yesterday.
But
ultimately, that’s what we should expect from our leaders. If
this was
easy it would have already been done. And I think what a lot of
the
American people are so disappointed by is this sense that all the talk
about responsibility, all the talk about the next generation, all the
talk about making sacrifices, that when it comes to actually doing
something difficult folks walk away.
Last
point I’ll make here. I mean, I’ve gone out of my way to say that
both
parties have to make compromises. I think this whole episode has
indicated the degree to which at least a Democratic President has been
willing to make some tough compromises. So when you guys go out
there
and write your stories, this is not a situation where somehow this was
the usual food fight between Democrats and Republicans. A lot of
Democrats stepped up in ways that were not advantageous
politically.
So we’ve shown ourselves willing to do the tough stuff on an issue that
Republicans ran on.
Norah.
Q
Mr. President, there seems to be an extraordinary breakdown of trust
involved here. And I wonder if you could address what we’re
hearing
from Republicans, which is that there was a framework and a deal that
was agreed with your chief of staff, with the Treasury Secretary, about
a certain number of revenues, that the Republicans had agreed to
that.
And then after you brought that to your party and the discussion of
that, the goal line was moved. Is this an example of where the
goal
line has moved and that that’s what has led to this breakdown in trust?
THE
PRESIDENT: Norah, what I’ll do is we’ll do a tick-tock, we’ll go
through all the paper. We’ll walk you through this process.
What this
came down to was that there doesn’t seem to be a capacity for them to
say yes.
Now,
what is absolutely true is we wanted more revenue than they had
initially offered. But as you’ll see, the spending cuts that we
were
prepared to engage in were at least as significant as the spending cuts
that you’ve seen in a whole range of bipartisan proposals, and we had
basically agreed within $10 billion, $20 billion -- we were within that
range.
So
that wasn’t the reason this thing broke down. We were consistent
in
saying that it was going to be important for us to have at least enough
revenue that we could protect current beneficiaries of Social Security,
for example, or current beneficiaries of Medicare; that we weren’t
slashing Medicaid so sharply that states suddenly were going to have to
throw people off the health care rolls. And we were consistent in
that.
So
I want to be clear. I’m not suggesting that we had an agreement
that
was signed, sealed and delivered. The parties were still apart as
recently as yesterday. But when you look at the overall package,
there’s no changing of the goalposts here. There has been a
consistency on our part in saying we’re willing to make the tough cuts
and we’re willing to take on the heat for those difficult cuts, but
that there’s got to be some balance in the process. What I’ve
said
publicly is the same thing that I’ve said privately. And I’ve
done
that consistently throughout this process.
Now,
with respect to this breakdown in trust, I think that we have operated
aboveboard consistently. There haven’t been any surprises.
I think
the challenge really has to do with the seeming inability, particularly
in the House of Representatives, to arrive at any kind of position that
compromises any of their ideological preferences. None.
And
you’ve heard it. I mean, I’m not making this up. I think a
number of
members of that caucus have been very clear about that.
Q But they were willing to move on some revenues,
apparently.
THE
PRESIDENT: Absolutely. But what you saw -- and, again,
you’ll see
this from the description of the deal -- essentially what they had
agreed to give on is to get back to a baseline -- this starts getting
technical, but there were about $800 billion in revenue that were going
to be available. And what we said was when you’ve got a ratio of
$4 in
cuts for every $1 of revenue, that’s pretty hard to stomach. And
we
think it’s important to make sure that whatever additional revenue is
in there covers the amount of money that’s being taken out of
entitlement programs. That’s only fair.
If
I’m saying to future recipients of Social Security or Medicare that
you’re going to have to make some adjustments, it’s important that
we’re also willing to make some adjustments when it comes to corporate
jet owners, or oil and gas producers, or people who are making millions
or billions of dollars.
Wendell. Where’s Wendell? Wendell is not here.
Lesley. Is Lesley here?
Q Yes, Mr. President.
THE PRESIDENT: There you are.
Q
Thank you. You’ve said that your bottom line has been the big
deal;
that’s not going to happen. Are you going to be willing to go
back to
just raising the debt ceiling still?
THE
PRESIDENT: Well, I think I’ve been consistently saying here in
this
press room and everywhere that it is very important for us to raise the
debt ceiling. We don’t have an option on that. So if that’s
the best
that Congress can do, then I will sign a extension of the debt ceiling
that takes us through 2013.
I
don’t think that’s enough. I think we should do more.
That’s the bare
minimum; that’s the floor of what the American people expect us to
do.
So I’d like to see us do more. And when I meet with the
leadership
tomorrow I’m going to say let’s do more. But if they tell me
that’s
the best they can do, then I will sign an extension that goes to 2013,
and I will make the case to the American people that we’ve got to
continue going out there and solving this problem. It’s the right
thing to do, and it’s time to do it. We can’t keep on putting it
off.
Q You suggested that Speaker Boehner didn’t return
phone calls this
afternoon. Could you elaborate a little bit on that?
THE PRESIDENT: You know, I’m less concerned about me having to
wait
for my phone call returned than I am the message that I received when I
actually got the phone call.
I’m going to make this the last
question. Go ahead.
Q Yes, the markets are closed right now,
obviously. What assurances
can you give people on Wall Street? Are you going to be reaching
out
to some people on Wall Street so that when Monday comes we don’t see a
reaction to the news that’s developing right now?
THE PRESIDENT: I think it’s very important that the leadership
understands that Wall Street will be opening on Monday, and we better
have some answers during the course of the next several days.
Q What can you say to people
who are watching who work on Wall Street who might find this news a bit
alarming, perhaps?
THE PRESIDENT: Well, I think what you should say -- well, here’s
what
I’d say: I remain confident that we will get an extension of the
debt
limit and we will not default. I am confident of that.
I am less confident at this point that people are willing to step up to
the plate and actually deal with the underlying problem of debt and
deficits. That requires tough choices. That’s what we were
sent here
to do.
I mean, the debt ceiling, that’s a formality. Historically, this
has
not even been an issue. It’s an unpleasant vote but it’s been a
routine vote that Congress does periodically. It was raised 18
times
when Ronald Reagan was President. Ronald Reagan said default is
not an
option, that it would be hugely damaging to the prestige of the United
States and we shouldn’t even consider it. So that’s the easy
part. We
should have done that six months ago.
The hard part is actually dealing with the underlying debt and
deficits, and doing it in a way that’s fair. That’s all the
American
people are looking for -- some fairness. I can’t tell you how
many
letters and emails I get, including from Republican voters, who say,
look, we know that neither party is blameless when it comes to how this
deft and deficit developed -- there’s been a lot of blame to spread
around -- but we sure hope you don’t just balance the budget on the
backs of seniors. We sure hope that we’re not slashing our
commitment
to make sure kids can go to college. We sure hope that we’re not
suddenly throwing a bunch of poor kids off the Medicaid rolls so they
can’t get basic preventative services that keep them out of the
emergency room. That’s all they’re looking for, is some
fairness.
Now,
what you’re going to hear, I suspect, is, well, if you -- if the Senate
is prepared to pass the cap, cut and balance bill, the Republican plan,
then somehow we can solve this problem -- that’s serious debt
reduction. It turns out, actually, that the plan that Speaker
Boehner
and I were talking about was comparable in terms of deficit
reduction.
The difference was that we didn’t put all the burden on the people who
are least able to protect themselves, who don’t have lobbyists in this
town, who don’t have lawyers working on the tax code for them --
working stiffs out there, ordinary folks who are struggling every
day.
And they know they’re getting a raw deal, and they’re mad at everybody
about it. They’re mad at Democrats and they’re mad at
Republicans,
because they know somehow, no matter how hard they work, they don’t
seem to be able to keep up. And what they’re looking for is
somebody
who’s willing to look out for them. That’s all they’re looking
for.
And for us not to be keeping those folks in mind every single day when
we’re up here, for us to be more worried about what some funder says,
or some talk radio show host says, or what some columnist says, or what
pledge we signed back when we were trying to run, or worrying about
having a primary fight -- for us to be thinking in those terms instead
of thinking about those folks is inexcusable.
I mean, the American people are just desperate for folks who are
willing to put aside politics just for a minute and try to get some
stuff done.
So when Norah asked or somebody else asked why was I willing to go
along with a deal that wasn’t optimal from my perspective, it was
because even if I didn’t think the deal was perfect, at least it would
show that this place is serious, that we’re willing to take on our
responsibilities even when it’s tough, that we’re willing to step up
even when the folks who helped get us elected may disagree.
And at some point, I think if you want to be a
leader, then you got to lead.
Thank you very much.
END
6:36
P.M. EDT
rec'd 8:50 p.m.
Gov. Jon Huntsman Statement on
President
Obama's Debt Ceiling Press Conference
Orlando, FL - Gov. Jon Huntsman released the following
statement today regarding President Obama's debt ceiling press
conference:
"Tonight President Obama signaled that a trillion dollar tax increase
is non-negotiable if we are to increase the debt limit; this position
is as reckless as it is misguided. In order to get a deal done, the
President must come to the table with a plan that will cut spending
commensurate to any increase in the debt ceiling. As Speaker John
Boehner has rightly said, now is the time to focus on jobs and economic
growth, while making real strides towards solvency and a balanced
budget, not rigid adherence to anti-growth tax hikes. Once we have met
our obligations, we should turn immediately to pro-growth, revenue
neutral tax reform."
rec'd
8:50 p.m.
Santorum Responds to Obama Debt Limit Press
Conference
Verona,
PA - Former Senator Rick Santorum (R-PA) made the following statement
in reaction to President Obama's press conference this evening
regarding the status of the debt limit negotiations:
"Tonight's display
by President Obama was a lot of things, but leadership it was
not.
From the rhetoric used to his obsession with raising taxes on small
business owners, President Obama has shown he cannot distinguish
between campaigning and governing. While the language President
Obama
used tonight may work well at a campaign rally, it did nothing to
advance real policy solutions to the debt crisis facing our
nation. It
is long overdue that our nation address the debt issues facing our
government, and it is time we pass a Balanced Budget Amendment to
ensure future administrations make the tough decisions the current one
is seemingly unable to make."