Bill Clinton: Economy Should Recover Before Deficit-Cutting Deal Takes Effect

Bill Clinton's Warning On The Debt Ceiling Debate

WASHINGTON -- Former President Bill Clinton said Wednesday that any deficit-cutting deal worked out between Democrats and Republicans shouldn't take effect immediately, but rather wait until after the economy has recovered. He warned that implementing the cuts too soon could imperil the fragile economic recovery and possibly send the country spiraling back into a recession.

"Almost nobody's talking about one of the central points that everyone who has analyzed this situation makes -- including the bipartisan Simpson-Bowles commission -- which [is] you shouldn't do any of this until the economy is clearly recovering," said Clinton in remarks at the annual Campus Progress National Conference in Washington, D.C.

"If you do things that dampen economic growth…there's a good chance that economic activity will go down so much that tax revenues will be reduced even more than spending is cut and the deficit will increase," he added.

Clinton was speaking before a crowd of more than 1,200 young people at the gathering sponsored by Campus Progress, which is part of the Center for American Progress.

He also took aim at Republicans for griping about the size of the national debt under a Democratic president and standing by as it ballooned under Republican presidents.

"The Republicans, who control the House and now have greater control of the Senate, have now decided -- having tripled the debt in the 12 years before I took office and doubled it since I left -- that it's all of a sudden the biggest problem in the world," he said.

As lawmakers get set to meet with the White House this week, the timing of the reductions are likely to be a major sticking point. Republicans have warned that the cuts already proposed by the White House rely heavily on budget gimmicks that would essentially mean no reductions in the interim but savings in the long-term.

Earlier this week, the former Democratic president advised President Obama "not to blink" on the budget debate with Republicans. Obama has now stepped into the discussions with Republican congressional leaders after Vice President Biden's debt ceiling talks broke down.

Republicans have continued to decry any attempt to include tax hikes, scaling back tax cuts or eliminating subsidies to large corporations.

Clinton said one of the things keeping America's economy from fully recovering are the declining payrolls at the state and local levels.

A recent report by the liberal Center on Budget and Policy Priorities reinforced Clinton's statement.

The CPBP report found some states have actually made their situations worse by enacting spending cuts and cutting corporate income and property taxes simultaneously. Many of those states were where Republicans took office in 2010 promising to make government less involved in peoples' lives -- an idea Clinton chastised.

"This idea that the government is the source of all America's problems would strike the Founding Fathers as passing strange," Clinton said, adding, "There is not a single example today of a really successful wealthy country that does not have both a vibrant economy and a strong effective government."

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