Obama: Chance for ‘something big’ to calm economy

WASHINGTON — President Barack Obama on Friday challenged Congress to compromise and “do something big” to reduce long-term deficits, insisting he was willing to make his own tough choices including trimming benefits for wealthy Medicare recipients. Facing a critical Aug. 2 deadline to raise the nation’s debt limit, Obama said the public was on his side but “we’re running out of time.” Obama urged Republican lawmakers to make tough calls, too. He attempted to turn their opposition to any tax increases back against them, warning that a government default caused by failure to raise the debt ceiling would increase interest rates, “effectively a tax increase for everybody.”

Speaking in his second news conference of the week, Obama tried to cast himself as the voice of reason in the debate, saying several times that polls show even Republican voters support his approach to deficit reduction through spending cuts and additional tax revenue. “This is not a matter of the American people knowing what the right thing to do is,” he said. “It’s a matter of Congress doing the right thing and reflecting the will of the American people.” The news conference came as the debate was shifting back to the halls of Congress after five days of private White House meetings failed to yield a an agreement on the debt ceiling and deficit reduction. House Republicans were preparing to vote on spending cuts next week, and in the Senate the Democratic and Republican leaders were working on a fallback plan in the event Aug. 2 came too close without any deal.

Obama conceded that “it’s hard to do a big package” in deadlocked Washington. He showed openness to a deal less ambitious than the “grand bargain” of $4 trillion in deficit reductions over 10 years that he had envisioned. He said of the Republicans: “If they show me a serious plan I’m ready to move.” Obama said he was willing to target cherished Democratic programs, such as Social Security and Medicare, declaring publicly for the first time that he was willing to consider an income threshold for Medicare beneficiaries. “I’ve said that means testing on Medicare, meaning people like myself, if — you know, I’m going to be turning 50 in a week, so I’m starting to think a little bit more about Medicare eligibility,” he said. “You can envision a situation where, for somebody in my position, me having to pay a little bit more on premiums or co-pays or things like that would be appropriate. And again, that could make a difference.”

Under current law, couples making over $170,000 or singles over $85,000 already pay somewhat higher Medicare premiums for doctors and for prescription drugs. An administration official, speaking on condition of anonymity to discuss the president’s thinking, said that as part of a substantial deficit-trimming deal, Obama is willing to make Medicare recipients above those income thresholds pay “modestly higher premiums.” The official did not elaborate. House Republicans are pushing for a balanced budget constitutional amendment and for a deficit reduction plan that would reduce spending by at least $2.4 trillion over 10 years. – Yahoonews