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Will Pres. Obama Have To Spend His Political Capital To Settle The Fiscal Cliff Debate? (VIDEO)

The fiscal cliff debate is the debt ceiling debate all over again, but this time President Barack Obama has the benefit of four years’ experience, a big election victory, and what he calls a “mandate to protect the middle class.”

So, how does President Obama use that political capital to settle this latest crisis? Gene Sperling, director of the National Economic Council and Assistant to the President on Economic Policy joined Roland Martin on Washington Watch from the North Lawn of the White House to discuss this and more.

MR. MARTIN: Welcome back.

Is this a case of déjà vu? Haven’t we been here before? I swear this is like the movie “Groundhog Day.” The fiscal cliff debate is the debt ceiling debate all over again, but this time the President has the benefit of four years’ experience, a big election victory, and what he calls a “mandate to protect the middle class.”

So, how does he use that political capital to settle this latest crisis? Joining us from the North Lawn of the White House is Gene Sperling, director of the National Economic Council and Assistant to the President on Economic Policy.

Gene, welcome back to “Washington Watch.”

MR. GENE SPERLING: Well, thank you, Roland. Thanks for having me.

MR. MARTIN: All right. So, fiscal cliff. I mean there’re people out there – and – and, trust me. I’ve gotten tweets and emails, and they’re saying, “What the heck really is this? I mean is this really this potential calamity that folks are describing, as somebo- — somehow, the economy can grind to a halt if no deal is cut over the next 30-plus days?”

MR. SPERLING: Well, I think there’s no question that, if – if a deal did not happen, it would be damaging to middle-class families and damaging to the economy, but the important thing is that there is no reason – no reason – that we should not have an overall budget agreement that is good for jobs, good for growth; gives confidence we’re bringing our long-term deficit down.

If you ask – if – if the American people, your viewers want to know what is the obstacle at this moment to making the type of progress we need to get an agreement, it is really only one thing. The Republican leadership at this point has still been resistant to the idea that rates have to go up on the most well-off Americans.

The President has a balanced package; it includes some tough spending cuts, but if we’re going to have a package that asks everybody to do their part, that’s good for growth, that doesn’t put the burden on the middle class and the poor, then you’ve got to ask those who are most well-off to do their part. And the interesting thing is that when the President talks to top business leaders, people around the country –

MR. MARTIN: Right?

MR. SPERLING: — they understand that, as part of a balanced plan, of course rates on the highest earners are going to go up. It’s –

MR. MARTIN: So –

MR. SPERLING: — really just, unfortunately, been this kind of absolutist, you know, view of – of the Republicans at this point –

MR. MARTIN: — so, Gene –

MR. SPERLING: — that is mak- — keeping us from making progress. And I hope that, as time goes by – and quickly – that – that we can start coming to the type of agreement the American pu- — people deserve.

MR. MARTIN: — Gene, let’s look at entitlements. You have Sen. Dick Durbin, who won’t even speak to the issue of dealing with the – the entitlements. Will that be on the table? And how much, potentially, are we talking about in cuts? Because Republicans are saying, “Look, we have to get spending under control as well.”

Of course, this week the President released a new proposal that includes $50 billion in new spending, plus $1.6 trillion in new taxes over the next ten years. And so how will you balance Republicans saying, “We want to see entitlement reform,” but the President saying, “We want to see tax reform,” in terms of the top 2 percent paying more?

MR. SPERLING: Well, what you need is you need a balanced economic agreement, and a balanced economic agreement does a couple of things. It means a balance between spending cuts and asking those who are most well-off to do their parts with higher tax rates. It also means making sure that your plan is going to be good for jobs and growth.

So, we’ve already – this president’s already cut a trillion dollars in spending cuts last year, so there’s no question about his record and toughness on being willing to make difficult spending cuts. But what we can do is now put together [an] agreement that, together with that initial 1 trillion, is worth over 4 trillion in deficit reduction. When you’re doing a big agreement like that, when it includes revenues from higher rates on high-income Americans, you can do all that and still afford to do a bit more to give this recovery more momentum by helping middle-class families, by helping create jobs – things like extending unemployment insurance, accelerating infrastructure investment at this critical time, helping American families – particularly those who are underwater – get refinancing. These are all things that you can easily afford as part of a large and balanced deficit reduction plan that still does more immediately to give more demand and more momentum to this recovery by helping jobs and working families.

MR. MARTIN: Well, Gene, you’d better get some rest, ’cause I don’t think you’re going to be sleeping much over the next 30 days.

MR. SPERLING: Thank you. Thanks –

MR. MARTIN: We appreciate –

MR. SPERLING: — for having us.

MR. MARTIN: — it, Gene. Thanks a bunch.

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