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The
White House
Office of the Press Secretary...
Remarks by the
President on Economic Growth and Deficit Reduction
Rose Garden
September 19, 10:56 a.m.
THE PRESIDENT: Good morning, everybody. Please have a seat.
A week ago today, I sent Congress the American Jobs Act. It’s a
plan that will lead to new jobs for teachers, for construction workers,
for veterans, and for the unemployed. It will cut taxes for every
small business owner and virtually every working man and woman in
America. And the proposals in this jobs bill are the kinds that
have been supported by Democrats and Republicans in the past. So
there shouldn’t be any reason for Congress to drag its feet. They
should pass it right away. I’m ready to sign a bill. I’ve
got the pens all ready.
Now, as I said before, Congress should pass this bill knowing that
every proposal is fully paid for. The American Jobs Act will not
add to our nation’s debt. And today, I’m releasing a plan that
details how to pay for the jobs bill while also paying down our debt
over time.
And this is important, because the health of our economy depends in
part on what we do right now to create the conditions where businesses
can hire and middle-class families can feel a basic measure of economic
security. But in the long run, our prosperity also depends on our
ability to pay down the massive debt we’ve accumulated over the past
decade in a way that allows us to meet our responsibilities to each
other and to the future.
During this past decade, profligate spending in Washington, tax cuts
for multi-millionaires and billionaires, the cost of two wars, and the
recession turned a record surplus into a yawning deficit, and that left
us with a big pile of IOUs. If we don’t act, that burden will
ultimately fall on our children’s shoulders. If we don’t act, the
growing debt will eventually crowd out everything else, preventing us
from investing in things like education, or sustaining programs like
Medicare.
So Washington has to live within its means. The government has to
do what families across this country have been doing for years.
We have to cut what we can’t afford to pay for what really
matters. We need to invest in what will promote hiring and
economic growth now while still providing the confidence that will come
with a plan that reduces our deficits over the long-term.
These principles were at the heart of the deficit framework that I put
forward in April. It was an approach to shrink the deficit as a
share of the economy, but not to do so so abruptly with spending cuts
that would hamper growth or prevent us from helping small businesses
and middle-class families get back on their feet.
It was an approach that said we need to go through the budget
line-by-line looking for waste, without shortchanging education and
basic scientific research and road construction, because those things
are essential to our future. And it was an approach that said we
shouldn’t balance the budget on the backs of the poor and the middle
class; that for us to solve this problem, everybody, including the
wealthiest Americans and biggest corporations, have to pay their fair
share.
Now, during the debt ceiling debate, I had hoped to negotiate a
compromise with the Speaker of the House that fulfilled these
principles and achieved the $4 trillion in deficit reduction that
leaders in both parties have agreed we need -- a grand bargain that
would have strengthened our economy, instead of weakened it.
Unfortunately, the Speaker walked away from a balanced package.
What we agreed to instead wasn’t all that grand. But it was a
start -- roughly $1 trillion in cuts to domestic spending and defense
spending.
Everyone knows we have to do more, and a special joint committee of
Congress is assigned to find more deficit reduction. So, today, I’m
laying out a set of specific proposals to finish what we started this
summer -- proposals that live up to the principles I’ve talked about
from the beginning. It’s a plan that reduces our debt by more
than $4 trillion, and achieves these savings in a way that is fair --
by asking everybody to do their part so that no one has to bear too
much of the burden on their own.
All told, this plan cuts $2 in spending for every dollar in new
revenues. In addition to the $1 trillion in spending that we’ve
already cut from the budget, our plan makes additional spending cuts
that need to happen if we’re to solve this problem. We reform
agricultural subsidies -- subsidies that a lot of times pay large farms
for crops that they don’t grow. We make modest adjustments to
federal retirement programs. We reduce by tens of billions of
dollars the tax money that goes to Fannie Mae and Freddie Mac. We
also ask the largest financial firms -- companies saved by tax dollars
during the financial crisis -- to repay the American people for every
dime that we spent. And we save an additional $1 trillion as we
end the wars in Iraq and Afghanistan.
These savings are not only counted as part of our plan, but as part of
the budget plan that nearly every Republican on the House voted for.
Finally, this plan includes structural reforms to reduce the cost of
health care in programs like Medicare and Medicaid. Keep in mind
we’ve already included a number of reforms in the health care law,
which will go a long way towards controlling these costs. But
we’re going to have to do a little more. This plan reduces
wasteful subsidies and erroneous payments while changing some
incentives that often lead to excessive health care costs. It
makes prescriptions more affordable through faster approval of generic
drugs. We’ll work with governors to make Medicaid more efficient
and more accountable. And we’ll change the way we pay for health
care. Instead of just paying for procedures, providers will be
paid more when they improve results -- and such steps will save money
and improve care.
These changes are phased in slowly to strengthen Medicare and Medicaid
over time. Because while we do need to reduce health care costs,
I’m not going to allow that to be an excuse for turning Medicare into a
voucher program that leaves seniors at the mercy of the insurance
industry. And I’m not going to stand for balancing the budget by
denying or reducing health care for poor children or those with
disabilities. So we will reform Medicare and Medicaid, but we
will not abandon the fundamental commitment that this country has kept
for generations.
And by the way, that includes our commitment to Social Security.
I’ve said before, Social Security is not the primary cause of our
deficits, but it does face long-term challenges as our country grows
older. And both parties are going to need to work together on a
separate track to strengthen Social Security for our children and our
grandchildren.
So this is how we can reduce spending: by scouring the budget for
every dime of waste and inefficiency, by reforming government spending,
and by making modest adjustments to Medicare and Medicaid. But
all these reductions in spending, by themselves, will not solve our
fiscal problems. We can’t just cut our way out of this
hole. It’s going to take a balanced approach. If we’re
going to make spending cuts -- many of which we wouldn’t make if we
weren’t facing such large budget deficits -- then it’s only right that
we ask everyone to pay their fair share.
You know, last week, Speaker of the House John Boehner gave a speech
about the economy. And to his credit, he made the point that we
can’t afford the kind of politics that says it’s “my way or the
highway.” I was encouraged by that. Here’s the problem: In
that same speech, he also came out against any plan to cut the deficit
that includes any additional revenues whatsoever. He said -- I’m
quoting him -- there is “only one option.” And that option and
only option relies entirely on cuts. That means slashing
education, surrendering the research necessary to keep America’s
technological edge in the 21st century, and allowing our critical
public assets like highways and bridges and airports to get
worse. It would cripple our competiveness and our ability to win
the jobs of the future. And it would also mean asking sacrifice
of seniors and the middle class and the poor, while asking nothing of
the wealthiest Americans and biggest corporations.
So the Speaker says we can’t have it “my way or the highway,” and then
basically says, my way -- or the highway. (Laughter.)
That’s not smart. It’s not right. If we’re going to meet
our responsibilities, we have to do it together.
Now, I’m proposing real, serious cuts in spending. When you
include the $1 trillion in cuts I’ve already signed into law, these
would be among the biggest cuts in spending in our history. But they’ve
got to be part of a larger plan that’s balanced –- a plan that asks the
most fortunate among us to pay their fair share, just like everybody
else.
And that’s why this plan eliminates tax loopholes that primarily go to
the wealthiest taxpayers and biggest corporations –- tax breaks that
small businesses and middle-class families don’t get. And if tax
reform doesn’t get done, this plan asks the wealthiest Americans to go
back to paying the same rates that they paid during the 1990s, before
the Bush tax cuts.
I promise it’s not because anybody looks forward to the prospects of
raising taxes or paying more taxes. I don’t. In fact, I’ve
cut taxes for the middle class and for small businesses, and through
the American Jobs Act, we’d cut taxes again to promote hiring and put
more money into the pockets of people. But we can’t afford these
special lower rates for the wealthy -– rates, by the way, that were
meant to be temporary. Back when these first -- these tax cuts,
back in 2001, 2003, were being talked about, they were talked about
temporary measures. We can’t afford them when we’re running these
big deficits.
Now, I am also ready to work with Democrats and Republicans to reform
our entire tax code, to get rid of the decades of accumulated
loopholes, special interest carve-outs, and other tax expenditures that
stack the deck against small business owners and ordinary families who
can’t afford Washington lobbyists or fancy accountants. Our tax
code is more than 10,000 pages long. If you stack up all the volumes,
they’re almost five feet tall. That means that how much you pay
often depends less on what you make and more on how well you can game
the system, and that’s especially true of the corporate tax code.
We’ve got one of the highest corporate tax rates in the world, but it’s
riddled with exceptions and special interest loopholes. So some
companies get out paying a lot of taxes, while the rest of them end up
having to foot the bill. And this makes our entire economy less
competitive and our country a less desirable place to do business.
That has to change. Our tax code shouldn’t give an advantage to
companies with the best-connected lobbyists. It should give an
advantage to companies that invest in the United States of America and
create jobs in the United States of America. And we can lower the
corporate rate if we get rid of all these special deals.
So I am ready, I am eager, to work with Democrats and Republicans to
reform the tax code to make it simpler, make it fairer, and make
America more competitive. But any reform plan will have to raise
revenue to help close our deficit. That has to be part of the
formula. And any reform should follow another simple
principle: Middle-class families shouldn’t pay higher taxes than
millionaires and billionaires. That’s pretty
straightforward. It’s hard to argue against that. Warren
Buffett’s secretary shouldn’t pay a higher tax rate than Warren
Buffett. There is no justification for it.
It is wrong that in the United States of America, a teacher or a nurse
or a construction worker who earns $50,000 should pay higher tax rates
than somebody pulling in $50 million. Anybody who says we can’t
change the tax code to correct that, anyone who has signed some pledge
to protect every single tax loophole so long as they live, they should
be called out. They should have to defend that unfairness --
explain why somebody who’s making $50 million a year in the
financial markets should be paying 15 percent on their taxes, when a
teacher making $50,000 a year is paying more than that -- paying a
higher rate. They ought to have to answer for it. And if
they’re pledged to keep that kind of unfairness in place, they should
remember, the last time I checked the only pledge that really matters
is the pledge we take to uphold the Constitution.
Now, we’re already hearing the usual defenders of these kinds of
loopholes saying this is just “class warfare.” I reject the idea
that asking a hedge fund manager to pay the same tax rate as a plumber
or a teacher is class warfare. I think it’s just the right the
thing to do. I believe the American middle class, who’ve been
pressured relentlessly for decades, believe it’s time that they were
fought for as hard as the lobbyists and some lawmakers have fought to
protect special treatment for billionaires and big corporations.
Nobody wants to punish success in America. What’s great about
this country is our belief that anyone can make it and everybody should
be able to try -– the idea that any one of us can open a business or
have an idea and make us millionaires or billionaires. This is
the land of opportunity. That’s great. All I’m saying is
that those who have done well, including me, should pay our fair share
in taxes to contribute to the nation that made our success
possible. We shouldn’t get a better deal than ordinary families
get. And I think most wealthy Americans would agree if they knew
this would help us grow the economy and deal with the debt that
threatens our future.
It comes down to this: We have to prioritize. Both parties
agree that we need to reduce the deficit by the same amount -- by $4
trillion. So what choices are we going to make to reach that
goal? Either we ask the wealthiest Americans to pay their fair
share in taxes, or we’re going to have to ask seniors to pay more for
Medicare. We can’t afford to do both.
Either we gut education and medical research, or we’ve got to reform
the tax code so that the most profitable corporations have to give up
tax loopholes that other companies don’t get. We can’t afford to
do both.
This is not class warfare. It’s math. (Laughter.) The
money is going to have to come from someplace. And if we’re not
willing to ask those who’ve done extraordinarily well to help America
close the deficit and we are trying to reach that same target of $4
trillion, then the logic, the math says everybody else has to do a
whole lot more: We’ve got to put the entire burden on the middle
class and the poor. We’ve got to scale back on the investments
that have always helped our economy grow. We’ve got to settle for
second-rate roads and second-rate bridges and second-rate airports, and
schools that are crumbling.
That’s unacceptable to me. That’s unacceptable to the American
people. And it will not happen on my watch. I will not
support -- I will not support -- any plan that puts all the burden for
closing our deficit on ordinary Americans. And I will veto any
bill that changes benefits for those who rely on Medicare but does not
raise serious revenues by asking the wealthiest Americans or biggest
corporations to pay their fair share. We are not going to have a
one-sided deal that hurts the folks who are most vulnerable.
None of the changes I’m proposing are easy or politically
convenient. It’s always more popular to promise the moon and
leave the bill for after the next election or the election after
that. That’s been true since our founding. George
Washington grappled with this problem. He said, “Towards the
payment of debts, there must be revenue; that to have revenue there
must be taxes; [and] no taxes can be devised which are not more or less
inconvenient and unpleasant.” He understood that dealing with the
debt is -- these are his words -- “always a choice of
difficulties.” But he also knew that public servants weren’t
elected to do what was easy; they weren’t elected to do what was
politically advantageous. It’s our responsibility to put country
before party. It’s our responsibility to do what’s right for the
future.
And that’s what this debate is about. It’s not about numbers on a
ledger; it’s not about figures on a spreadsheet. It’s about the
economic future of this country, and it’s about whether we will do what
it takes to create jobs and growth and opportunity while facing up to
the legacy of debt that threatens everything we’ve built over
generations.
And it’s also about fairness. It’s about whether we are, in fact,
in this together, and we’re looking out for one another. We know
what’s right. It’s time to do what’s right.
Thank you very much. (Applause.)
See the video here
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