LANSDOWNE, Va. -- President Barack Obama reaffirmed on Thursday that he will not accept a deficit reduction package if it doesn't include tax revenues, and invited Republicans to a debate over spending cuts in the "court of public opinion."
Speaking before House Democrats at their annual issues conference, Obama said he remains committed to a long-term deficit reduction plan and called for an end to the crisis-to-crisis governance that has become a staple of fiscal policy over the last few years. But with looming sequestration-related cuts set to kick in, the president also set the stage for another fight with Republicans over how to reduce the deficit and debt without harming popular government programs.
"I'm prepared, eager and anxious to do a big deal, a big package, that ends this governance by crisis, where every two weeks, or two months, or every six months we are threatening a recovery where housing is finally picking up [and] unemployment is still too high," Obama said. "But we're seeing job growth, manufacturing is doing well, and we continue to have these self-inflicted crises here in Washington that are making everybody hit the brakes."
The president noted that Congress has already made significant cuts but only generated "some revenue," and reiterated the need for lawmakers to pass a balanced budget that includes a combination of spending cuts and revenue that would be gained by closing tax loopholes and deductions. It's an approach Republican leadership in both the House and the Senate has refused to entertain, contending that they gave Obama his tax increases in the year-end fiscal cliff deal and that now it's up to the president and Democrats to cave on spending cuts to entitlement programs, such as Medicare, Medicaid and Social Security.
Michael Steel, a spokesman to House Speaker John Boehner (R-Ohio), reiterated the GOP's opposition to new tax hikes in an email to The Huffington Post.
"We can't keep chasing ever-higher Washington spending with ever-higher taxes, because it costs jobs now and diminishes our children and grandchildren's future," Steel wrote. "There is a better way. Sensible spending cuts and reforms now will help our economy grow and the American people prosper."
Republicans have offered to replace the defense cuts contained in the sequester with reductions in social programs. Senate Democrats are reportedly working on a proposal that would avert the sequester by following the president's prescriptions, eliminating tax breaks to oil and gas companies and closing tax loopholes for the wealthy and corporations.
With sequestration just over three weeks away and Washington engaged in yet another round of political gridlock, the growing consensus appears to be that sequestration will take effect on March 1. The implications are severe.
Based on the fiscal cliff deal reached last month, the modified sequestration will cut discretionary defense spending by 7.3 percent and discretionary non-defense spending by 5.1 percent this year, along with a 2 percent cut to Medicare. The non-defense cuts will land on housing assistance and community development programs, education grants to states and many federal agencies, while leaving some initiatives exempt, such as Social Security, Medicaid, food stamps and children's health insurance.
Obama told House Democrats the American people are on their side.
"If that's an argument [Republicans] want to have before the court of public opinion, that is an argument I'm more than willing to engage in," he said. "Because I believe the American people understand that yes, we need to reduce the deficit, but it should not just be on the backs of seniors, not just young people trying to get an education, [and] not on the backs of parents trying to give their kids a better start in life ... I promise you we can win that debate, because we're on the right side of this argument."
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