President Barack Obama said the U.S. can cut the deficit and spur economic growth at the same time, and that short-term deficits aren’t the nation’s primary fiscal concern.
The president pointed to the shrinking federal budget deficit while arguing for continued spending on programs that he said will foster growth, such as investments in infrastructure, research and education.
“We are not lavishly spending on a whole bunch of social programs out there,” Obama said today at the Wall Street Journal’s CEO Council in Washington.
Spending cuts and higher tax revenue as the economy improves helped trim the federal budget deficit to $680 billion for the year ended Sept. 30. That’s the lowest in five years and about half the record deficit of $1.4 trillion in 2009, the year Obama first took office.
The tension between spending and shrinking the deficit is one of the main issues between Democratic and Republican lawmakers as they seek a deal on a government budget.
Negotiators in a House-Senate conference committee have failed so far to hammer out a budget outline for fiscal 2014, which began Oct. 1. The government is now operating on a stopgap spending resolution which expires on Jan. 15. The impasse creates the potential for a repeat of the 16-day partial government shutdown at the start of October.
A top priority of the Obama administration and most Democratic lawmakers is to replace about $20 billion in automatic spending cuts, known as sequestration, for 2014.
House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, said additional deficit reductions were “point number one” for him as part of a budget deal.
If Democrats don’t agree to cuts in entitlement programs such as Social Security or other reductions in any deal, Ryan said he and fellow Republicans would support continuing the sequestration cuts.
“We’ll take the spending cuts we’ve got, and we’ll take the fiscal discipline that we have,” Ryan said at the forum after Obama spoke.
Ryan said he and his counterpart in the Senate, Democrat Patty Murray of Washington, have made progress in their deliberations. He didn’t offer any details.
Earlier at the Journal event, former Obama adviser and Treasury Secretary Lawrence Summers said policy makers should put more focus on steps to boost growth to avoid a prolonged period of economic weakness.
Greater growth would solve the country’s long-term fiscal problems, he said.
Obama and lawmakers also will confront raising the government’s borrowing limit, which expires on Feb. 7. The president said he doesn’t expect Republicans will again try to use the debt ceiling as leverage to advance policy goals. The standoff over raising the limit that was part of the dispute leading to the shutdown earlier this year was a “dangerous precedent,” he said.
Obama said one of the main drivers of the nation’s long-term debt continues to be the cost of health care. He said his goal is to make health care “cheaper overall” and direct some of the savings to infrastructure and research.
He said that even with its troubled rollout, the health-care law enacted in 2010 is designed to address the growth of health spending.
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