Debt Ceiling Deal Emerges From Obama Press Conference

obama, cnbc, june 2011

There’s what he says and what he signals.  What President Obama signaled in his press conference this morning is that there is now a rough outline for a deal on deficit reduction and raising the debt ceiling.

The facts are these:

  1. The Biden Group of negotiators has identified roughly $1.2 trillion in budget cuts that all parties to the negotiations have agreed to.  Details of those cuts have not been made available but everyone from Rep. Eric Cantor to Vice President Biden himself has said that they are a done deal.
  2. That leaves a roughly $1 trillion hole.
  3. Senators Tom Coburn (R-OK) and Joe Lieberman (I-CT) yesterday proposed fairly straightforward Medicare reforms that, they say, would lead to $600 billion in savings.
  4. President Obama said nothing about Coburn/Lieberman in his press conference.  Instead, he said: “I’ve been willing to say we need to see where we can reduce the cost of healthcare spending and medicare and medicaid, not by shifting the cost to the elderly.” That does not rule out Coburn/Lieberman.
  5. The President was adamant that certain “tax expenditures” be eliminated, thus generating revenue.

So, the deal appears to be a swap. President Obama will go forward with the Coburn/Lieberman Medicare reform if and only if the Republicans agree to his proposals on “tax expenditures.”

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