President Barack Obama on Friday urged the Senate to find a bipartisan solution to the debt limit crisis, with House Republicans still working on a bill he said has no chance of becoming law.
Obama said he was confident a deal could be reached, perhaps by combining portions of Senate Majority Leader Harry Reid’s (D-Nev.) debt limit legislation and an earlier fallback proposal from Senate Minority Leader Mitch McConnell (R-Ky.) that would take the threat of default off the table.
Obama noted that there is broad agreement that lawmakers should make an early down payment on deficit reduction and on a bipartisan committee that would devise changes to entitlements and the tax code in the coming months.
“This is not a situation where the two parties are miles apart,” Obama said.
The president said there are many options that he could support, including adding an enforcement mechanism to make sure that the bipartisan committee produces a result.
“I’ll support that, too, if it’s done in a smart and balanced way,” Obama said.
In the past, “balanced” has been Democratic code for requiring tax increases as part of any trigger. That proposal, so far, has been rejected by the GOP.
The president again warned that the administration would not have enough money to pay all of its bills, naming Social Security benefits, veterans benefits and payments to businesses that have contracts with the government. He warned of a downgrade to the country’s AAA bond rating — not because the country doesn’t have the ability to borrow the money, but because we don’t have a “AAA political system to match our AAA credit rating.”
He said a downgrade in the credit rating would be the equivalent of a tax increase on everyone in the form of higher interest rates.
“That’s inexcusable,” he said. “The power to solve this is in our hands ... this is one burden we can lift ourselves.”
Obama also repeated his call to the American people to contact their lawmakers to keep up the pressure for a balanced solution.
“Please, to all the American people, keep it up,” he said.