TOPICS > Politics

Obama Steers Second Term Agenda Towards Government Debt, Gun Violence

January 14, 2013 at 12:00 AM EDT
President Obama called on Republicans to "act responsibly" and raise the nation's debt ceiling before March when the U.S. is expected to breech its borrowing limit and possibly default on its debt. Judy Woodruff talks to the Wall Street Journal's Carol Lee and Politico's Jake Sherman about Obama's plans for the federal deficit.

JEFFREY BROWN: Battle lines were drawn at either end of Pennsylvania Avenue today over the national debt and government spending. The opening shots came from President Obama at his White House news conference.

PRESIDENT OBAMA: I thought it might make sense to take some questions this week, as my first term comes to an end.

JEFFREY BROWN: The questions were dominated by the looming debt ceiling fight. And the president sternly warned Republicans not to balk at raising the nation’s borrowing limit.

PRESIDENT OBAMA: They will not collect a ransom in exchange for not crashing the American economy. The financial wellbeing of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip. And they better choose quickly, because time is running short.

JEFFREY BROWN: Congress has until March to raise the debt ceiling and prevent a government default. Most Republicans have insisted that, with the government facing another trillion-dollar deficit this year, any increase in borrowing authority must be tied to cuts in spending. The president flatly disagreed.

PRESIDENT OBAMA: So I want to be clear about this: The debt ceiling is not a question of authorizing more spending.

So, while I’m willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up.

JEFFREY BROWN: The 2011 standoff between the president and Republicans over the debt ceiling led the nation to the brink of national default. Standard & Poor’s even lowered its rating on U.S. government bonds. Today, President Obama said any repeat performance would be — quote — “irresponsible.”

PRESIDENT OBAMA: If the goal is to make sure that we are being responsible about our debt and our deficit — if that’s the conversation we’re having, I’m happy to have that conversation. What I will not do is to have that negotiation with a gun at the head of the American people.

JEFFREY BROWN: At the same time, the president rejected urgings by some Democrats that he raised the debt ceiling on his own authority.

Republicans were quick to answer the chief executive’s criticism. Senate Minority Leader Mitch McConnell said in a statement, “The president and his allies need to get serious about spending and the debt limit debate is the perfect time for it.”

And Speaker of the House John Boehner said, “The consequences of failing to increase the debt ceiling are real, but so too are the consequences of allowing our spending problem to go unresolved.”

The spending and debt issues took most of the president’s attention today, but he also turned to the issue of gun violence. After the shootings at an elementary school in Newtown, Conn., he appointed Vice President Biden to come up with recommendations for action. The vice president met with lawmakers today and with groups on both sides of the issue last week. He plans to submit proposals by tomorrow.

President Obama wouldn’t discuss specifics today. Instead, he said this:

PRESIDENT OBAMA: I’m confident that there are some steps that we can take that don’t require legislation and that are within my authority as president. And where you get a step that has the opportunity to reduce the possibility of gun violence, then I want to go ahead and take it.

JEFFREY BROWN: He conceded that a fight in Congress is likely, but he voiced hope that some compromise is possible.

PRESIDENT OBAMA: The issue here is not whether or not we believe in the Second Amendment. The issue is, are there some sensible steps that we can take to make sure that somebody like the individual in Newtown can’t walk into a school and gun down a bunch of children in a — in a shockingly rapid fashion? And, surely, we can do something about that.

JEFFREY BROWN: Also today, the president took the opportunity to defend his efforts to work with Congress on a host of issues, saying, in essence, it’s a two-way street.

PRESIDENT OBAMA: Most people who know me know I — I’m a pretty friendly guy.

And I like a good party.

When I’m over here at the Congressional picnic, and folks are coming up and taking pictures with their family, I promise you, Michelle and I are very nice to them, and we have a wonderful time. But it doesn’t prevent them from going onto the floor of the House and, you know, blasting me for being a big-spending socialist.

JEFFREY BROWN: The president said he will look for more common ground with the new Congress, which is getting down to work this week.

JUDY WOODRUFF: This afternoon, Treasury Secretary Tim Geithner sent a letter to Speaker Boehner warning the U.S. will breach the debt ceiling and run out of its borrowing authority some time between mid-February and early March.

More now on what’s behind this brewing battle and the latest threats from both sides.

Carol Lee covers the White House for The Wall Street Journal. And Jake Sherman reports about Congress for Politico.

Welcome to you both.

Carol Lee, to you first. The president basically was repeating today what we have heard him say many times before, that he is not going to negotiate on this debt ceiling, that he’s prepared to talk about spending, but if he does, it’s not going to be around this. So why have the news conference?

CAROL LEE, The Wall Street Journal: Well, what happened was in recent days the discussion around the debt limit had really intensified basically on two fronts.

You had — what really concerned the White House was that the Republicans were increasingly beating on this drum that they were going to use the debt limit fight to extract spending cuts. They were going to use it as leverage in some of these upcoming budget debates.

And then, on the flip side of that, there were some Republicans who were just talking in a way that was very casual about what would happen if the U.S. decided not to raise the debt limit and defaulted on some of its obligations.

And that raised alarm here at the White House. And then on the other side, you had Democrats who were pressuring the president to find a way to unilaterally raise the debt ceiling through executive power.

And what the president sought to do today was to try to basically squash all of that and say there’s only one solution to this. I will not negotiate over the debt ceiling and Congress has to do its job.

JUDY WOODRUFF: Well, when it comes to the Republicans, Jake Sherman, you have been talking to some of the folks on the Hill. They were digging in their heels just as much as the president was. What was their reaction?

JAKE SHERMAN, Politico: I think they have — they see this situation as three big issues: the government funding issue — that runs dry at the end of March — the debt ceiling, and these automatic spending cuts that take hold at the beginning of March.

And they want to use these opportunities. They don’t think it’s so bad to shut down the government or to default on the debt. And they are even skeptical of the administration’s estimates of when that will happen. So they see themselves really having very little leverage, besides doing something which a lot of Americans would consider extreme, which is defaulting on the debt or shutting down the government.

Now, I think it’s virtually impossible that Speaker John Boehner will raise the debt ceiling without commensurate spending cuts. He’s way too far out on a limb on that prospect.

So it’s going to be one of these huge battles. And it’s going to be something where one side has to blink first or the issues have to kind of meld together in a way that Speaker Boehner or President Obama has a fig leaf in order to get this done.

JUDY WOODRUFF: But, Jake, what about the president’s argument today? Now, he said this several times. He said this is not about we’re doing the debt ceiling in order to authorize more spending. He said it is about Congress paying off the bills that it’s already incurred.

JAKE SHERMAN: That argument is the same one that White House used in 2011. And it didn’t sit well with House Republicans then.

They have been saying for years — whatever the reality is at the White House and whatever the president tries to say, they have been saying for years that the nation has a spending problem, not a taxation problem. And it’s very difficult for them to reverse that.

So, they see this as the popular option. One of their internal polls showed that 74 percent of Americans believe in Speaker Boehner’s approach and not the president’s.

So they’re really not moving out of their corner. And they’re as far out as they could be on this.

JUDY WOODRUFF: Carol Lee, what is the White House preparing to do if Republicans do what Jake says they’re going to do, which is just say no?

CAROL LEE: Well, right now, they’re saying that there isn’t a plan-B on those terms. The Treasury has created a plan that basically could do certain things.

If Congress didn’t raise the debt ceiling, it would prioritize some of its payments or sell off some U.S. assets or things.

But the White House never signed off on that. And frankly it wouldn’t be in the president’s interests to come up with a plan-B right now because that would just weaken his hand in these discussions.

And Jake is right when he says that we’re going to see a battle over the debt limit whether the White House wants this fight or not. And it’s likely to be a little bit uglier than what we saw in 2011, just because the Republicans are coming off a bruising election.

They’re coming off of a fiscal debate at the end of the year where they feel like they didn’t get anything out of it because they didn’t get the spending cuts that they want. They have these two things coming up in terms of the budget negotiations. And you have these automatic spending cuts that are set to go into effect at the end of February and feel like the debt ceiling is going to be — is their leverage.

And they managed to use it effectively in 2011, although, if you’re an economist, you would say that it wasn’t effective and it wound up hurting the economy.

But, politically, they felt a little like that they had gained some of the things that they want, even though, ultimately, it did have a negative effect on the party. So, this whole battle is just going — is going to really heat up in the next few weeks.

JUDY WOODRUFF: Well, speaking of the politics of this, Jake, the president did say today if this happens he thinks both parties would be blamed.

But in fact in the polls are showing that it appears most people would blame Republicans if this happened. Is that — how much is that even a factor among — in the thinking of Republicans?

JAKE SHERMAN: In the wake of this press conference today, I spoke to some senior Republican aides who made a simple point. They haven’t defaulted. They haven’t shut down the government. They haven’t done all these hugely cataclysmic things, and their numbers are still in toilet. They’re still — Congress is at a 9 percent approval rating.

So, their point, some of these folks who want to default and want to do something dramatic, their point is, listen, we have tried the other options and our numbers are bad. Maybe this is the way to turn things around. So, that’s the way they see it.

But you’re right. If President Obama or the Treasury Department decides that they can’t send out Social Security checks, they can’t pay the troops, things like that, that is a huge loser for Congress, because Congress is always — seems in these debates to get the blame when it battles President Obama.

JUDY WOODRUFF: And just quickly, Jake, the point the president made, that he’s prepared to negotiate around other spending, whether it’s the so-called sequester, this automatic spending cuts that are due about the same time that the debt ceiling comes up, or about the budget overall, that’s not picking up any response from the Republicans?


I mean, I don’t think Republicans have settled on a legislative strategy yet, which is part of their problem at this point. They haven’t settled how they will deal with these issues either in one pot, which would seemingly make it easier for President Obama to negotiate, or whether they will separate them out and deal with them individually over the next couple months.

They’re heading to a retreat in Williamsburg, Virginia, this week, where they will kind of take the pulse of their membership and figure that out.

JUDY WOODRUFF: And just very quickly, Carol, at the end we know that the president commented today on his governing style, the fact that he doesn’t do a lot of schmoozing or reaching out to Republicans. The White House doesn’t have a sense that this is a liability in any way?

CAROL LEE: Clearly not.

Like he said, that he’s a nice guy. He hangs out with these members of Congress when he can. And it’s just not his style. And frankly in his view, he said he played golf with John Boehner in 2011, and it didn’t get him anywhere anyway. So, he’s sort of like, why bother?


JUDY WOODRUFF: OK. We did hear the president address that today.

Carol Lee, we thank you, joining us from the White House. Brad (sic) Sherman, we thank you.


CAROL LEE: Thank you.

JEFFREY BROWN: You can watch the president’s press conference in full online. That’s on our website.