At a White House news conference Monday, President Obama discussed how he sees Medicare, Medicaid and other health care spending factoring into the looming conflict over raising the federal debt ceiling.
An edited transcript follows.
PRESIDENT OBAMA: We are moving towards our ultimate goal of getting to a $4 trillion reduction. And there will be more deficit reduction when Congress decides what to do about the $1.2 trillion in automatic spending cuts that have been pushed off until next month.
The fact is, though, we can’t finish the job of deficit reduction through spending cuts alone. The cuts we’ve already made to priorities other than Medicare, Medicaid, Social Security and defense mean that we spend, on everything from education to public safety, less, as a share of our economy than has been true for a generation, and that’s not a recipe for growth. So we’ve got to do more both to stabilize our finances over the medium and long term, but also spur more growth in the short term.
Now, I’ve said I’m open to making modest adjustments to programs like Medicare to protect them for future generations.
I’ve also said that we need more revenue, through tax reform, by closing loopholes in our tax code for the wealthiest Americans. If we combine a balanced package of savings from spending on health care and revenues from closing loopholes, we can solve the deficit issue without sacrificing our investments in things like education that are going to help us grow.
Turns out the American people agree with me. They listened to an entire year’s debate over this issue, and they made a clear decision about the approach they prefer. They don’t think it’s fair, for example, to ask a senior to pay more for his or her health care or a scientist to shut down lifesaving research so that a multimillionaire investor can pay less in tax rates than a secretary. They don’t think it’s smart to protect endless corporate loopholes and tax breaks for the wealthiest Americans rather than rebuild our roads and our schools, invest in our workers’ skills or help manufacturers bring jobs back to America.
I keep in mind that, you know, what we’ve heard from some Republicans in both the House and the Senate is that they will only increase the debt ceiling by the amount of spending cuts that they’re able to push through. And in order to replace the automatic spending cut, the sequester, that’s $1.2 trillion. Say it takes another trillion (dollars) or trillion two to get us through one more year. They’d have to identify $2.5 trillion in cuts just to get the debt ceiling extended to next year — 2.5 trillion.
Congress has not been able to identify $1.2 trillion in cuts that they’re happy with, because these same Republicans say they don’t want to cut defense. They claim that they don’t want to gut Medicare or harm the vulnerable, but the truth of the matter is that you can’t meet their own criteria without drastically cutting Medicare or having an impact on Medicaid or affecting our defense spending. So the math just doesn’t add up.
Now, what — here’s what would work. What would work would be for us to say, we’ve already done close to $2 trillion in deficit reduction, and if you add the interest that we won’t be paying because of less spending and increased revenue, it adds up to about $2.5 trillion.
The consensus is we need about $4 trillion to stabilize our debt and our deficit, which means we need about $1.5 trillion more. The package that I offered to Speaker Boehner before the new year would achieve that. We were actually fairly close in terms of arriving at that number.
So if the goal is to make sure that we are being responsible about our debt and our deficit, if that’s the conversation we’re having, I’m happy to have that conversation. And by closing some additional loopholes through tax reform, which Speaker Boehner has acknowledged can raise money in a sensible way, and by doing some additional cuts, including making sure that we are reducing our health care spending, which is the main driver of our deficits, we can arrive at a package to get this thing done. I’m happy to have that conversation.
What I will not do is to have that negotiation with a gun at the head of the American people: the threat that unless we get our way, unless you gut Medicare or Medicaid or, you know, otherwise slash things that the American people don’t believe should be slashed, that we’re going to threaten to wreck the entire economy. That is not how historically this has been done. That’s not how we’re going to do it this time.
But the larger issue here has to do with what is it that we’re trying to accomplish. Are we trying to reduce the deficit? Because if we’re trying to reduce the deficit, then we can shape a bipartisan plan to reduce the deficit. I mean, is that really our objective? Our concern is that we’re spending more than we take in, and if that’s the case, then there’s a way of balancing that out so that we take in more money, increasing revenue, and we reduce spending. And there’s a recipe for getting that done.
And in the conversation that I had with Speaker Boehner before the end of the year, we came pretty close. I mean, a few hundred billion dollars separating us, when stretched out over a 10-year period, that’s not a lot.
But it seems as if what’s motivating and propelling at this point some of the House Republicans is more than simply deficit reduction. They have a particular vision about what government should and should not do. So they are suspicious about government’s commitments, for example, to make sure that seniors have decent health care as they get older. They have suspicions about Social Security. They have suspicions about whether government should make sure that kids in poverty are getting enough to eat or whether we should be spending money on medical research. So they’ve got a particular view of what government should do and should be.
And that view was rejected by the American people when it was debated during the presidential campaign. I think every poll that’s out there indicates that the American people actually think our commitment to Medicare or to education is really important, and that’s something that we should look at as a last resort in terms of reducing the deficit, and it makes a lot more sense for us to close, for example, corporate loopholes before we go to putting a bigger burden on students or seniors.