Carney: Don't hold debt ceiling hostage

April 11, 2011 at 5:58 PM
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WASHINGTON, April 11 (UPI) -- White House spokesman Jay Carney Monday urged Congress to raise the U.S. debt ceiling without any conditions and then start discussions on debt reduction.

At the daily press briefing, Carney told reporters not to raise the debt ceiling would be a mistake.

"We believe that we should move quickly to raise the debt limit and we support a clean piece of legislation to do that," Carney said.

"Concurrently -- not linked, but concurrently -- the president is going to demonstrate on Wednesday his commitment again to deficit reduction. We believe that having -- that he has established that and he will again."

President Barack Obama plans to present his deficit-cutting plan Wednesday in a major policy speech.

Carney said the president now thinks he made a mistake in 2006 when as a member of the U.S. Senate he voted against raising the debt ceiling.

"The consequences … of not -- of failing to raise the debt ceiling would be Armageddon-like in terms of the economy on the impact on interest rates, on job creation, on growth would be devastating," Carney said.

He also noted House Speaker John Boehner's statement that there's "not a chance" the debt ceiling will be raised without significant spending cuts attached are at odds with earlier statements. Carney quoted the Ohio Republican as saying earlier failure to raise the debt limit "would send our economy into a tailspin" and that it would be "financial disaster" for the world economy as well.

"We could not have said it better," Carney said. "That is a vivid description of why this is such an important vote and why you cannot hold it hostage to something else."

Obama adviser David Plouffe said on several Sunday talk shows the Democratic president's plan includes ending tax breaks for Americans earning more than $250,000 a year also will propose cuts to entitlement programs, including Medicare for senior citizens and Medicaid for people who are poor or disabled, and changes to Social Security, Plouffe said.

"Every corner of the federal government has to be looked at here," including defense spending, but they will be approached with "a scalpel, not a machete," Plouffe said on CNN's "State of the Union."

But it will seek to preserve funding for education and other areas Obama sees as crucial to the country's long-term economic success, Plouffe said.

"The president clearly believes that we can still grow economically with smart deficit reduction," he said. "But it's got to be smart. If we're just going to cut student loans, cut Head Start, cut medical research, we're not going to be the country in terms of the economy that we need to be."

Head Start is a government program that helps poor children improve their learning skillings by providing education, health, nutrition and other services.

As for ending the tax breaks for the wealthy, "I think the president's goal -- and he's been clear about this -- is to protect the middle class as we move forward here," Plouffe said on NBC's "Meet the Press." "So [wealthy] people like [Obama] ... who've been very fortunate in life, have the ability to pay a little bit more."

The GOP plan, which House Budget Chairman Paul Ryan, R-Wis., introduced last week, would close tax loopholes besides maintaining the Bush-era tax breaks. It also envisions repealing the administration's healthcare reform law that Congress passed last year, privatizing Medicare for senior citizens and reducing Medicaid spending for people who are poor or disabled.

The GOP plan would cut $6.2 trillion over 10 years. Obama's budget forecasts a $1 trillion cut over the same period.

House Majority Leader Eric Cantor, R-Va., the No. 2 House Republican, told "Fox News Sunday," "You know, I sit here and I listen to David Plouffe talk about, you know, their commitment to cut spending and knowing full well that for the last two months, we've had to bring this president kicking and screaming to the table to cut spending."

"And, by the way, they're insisting that we have to look at raising taxes again," an issue Cantor said was "settled" by November's elections and December's tax deal that extended the breaks for two years.

"In my opinion, it's really hard to believe what this White House and the president is saying," Cantor said.

"If you go down the tax-increase path you're sacrificing the economy -- and especially when the fact that the problem we have is spending, not taxes," Ryan added on "Meet the Press." "Spending's the root cause of our deficit and debts."

Obama will name deficit-reduction dollar amounts in his Wednesday speech, Plouffe said. Neither he nor the White House would provide figures Sunday.

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