Transcript: Obama's remarks on debt fight

President Barack Obama discusses the debt ceiling fight in an address from the White House July 25, 2011.

/ CBS

President Barack Obama's remarks -- as prepared for delivery -- on the debt ceiling fight, July 25, 2011:

Good evening. Tonight, I want to talk about the debate we've been having in Washington over the national debt - a debate that directly affects the lives of all Americans.

For the last decade, we have spent more money than we take in. In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation's credit card.

As a result, the deficit was on track to top $1 trillion the year I took office. To make matters worse, the recession meant that there was less money coming in, and it required us to spend even more - on tax cuts for middle-class families; on unemployment insurance; on aid to states so we could prevent more teachers and firefighters and police officers from being laid off. These emergency steps also added to the deficit.

Now, every family knows that a little credit card debt is manageable. But if we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy. More of our tax dollars will go toward paying off the interest on our loans. Businesses will be less likely to open up shop and hire workers in a country that can't balance its books. Interest rates could climb for everyone who borrows money - the homeowner with a mortgage, the student with a college loan, the corner store that wants to expand. And we won't have enough money to make job-creating investments in things like education and infrastructure, or pay for vital programs like Medicare and Medicaid.

Because neither party is blameless for the decisions that led to this problem, both parties have a responsibility to solve it. And over the last several months, that's what we've been trying to do. I won't bore you with the details of every plan or proposal, but basically, the debate has centered around two different approaches.

The first approach says, let's live within our means by making serious, historic cuts in government spending. Let's cut domestic spending to the lowest level it's been since Dwight Eisenhower was President. Let's cut defense spending at the Pentagon by hundreds of billions of dollars. Let's cut out the waste and fraud in health care programs like Medicare - and at the same time, let's make modest adjustments so that Medicare is still there for future generations. Finally, let's ask the wealthiest Americans and biggest corporations to give up some of their tax breaks and special deductions.

This balanced approach asks everyone to give a little without requiring anyone to sacrifice too much. It would reduce the deficit by around $4 trillion and put us on a path to pay down our debt. And the cuts wouldn't happen so abruptly that they'd be a drag on our economy, or prevent us from helping small business and middle-class families get back on their feet right now.

This approach is also bipartisan. While many in my own party aren't happy with the painful cuts it makes, enough will be willing to accept them if the burden is fairly shared. While Republicans might like to see deeper cuts and no revenue at all, there are many in the Senate who have said "Yes, I'm willing to put politics aside and consider this approach because I care about solving the problem." And to his credit, this is the kind of approach the Republican Speaker of the House, John Boehner, was working on with me over the last several weeks.

The only reason this balanced approach isn't on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a cuts-only approach - an approach that doesn't ask the wealthiest Americans or biggest corporations to contribute anything at all. And because nothing is asked of those at the top of the income scales, such an approach would close the deficit only with more severe cuts to programs we all care about - cuts that place a greater burden on working families.

So the debate right now isn't about whether we need to make tough choices. Democrats and Republicans agree on the amount of deficit reduction we need. The debate is about how it should be done. Most Americans, regardless of political party, don't understand how we can ask a senior citizen to pay more for her Medicare before we ask corporate jet owners and oil companies to give up tax breaks that other companies don't get. How can we ask a student to pay more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries? How can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don't need and didn't ask for?

That's not right. It's not fair. We all want a government that lives within its means, but there are still things we need to pay for as a country - things like new roads and bridges; weather satellites and food inspection; services to veterans and medical research.

Keep in mind that under a balanced approach, the 98% of Americans who make under $250,000 would see no tax increases at all. None. In fact, I want to extend the payroll tax cut for working families. What we're talking about under a balanced approach is asking Americans whose incomes have gone up the most over the last decade - millionaires and billionaires - to share in the sacrifice everyone else has to make. And I think these patriotic Americans are willing to pitch in. In fact, over the last few decades, they've pitched in every time we passed a bipartisan deal to reduce the deficit. The first time a deal passed, a predecessor of mine made the case for a balanced approach by saying this:

"Would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates, and higher unemployment? And I think I know your answer."

Those words were spoken by Ronald Reagan. But today, many Republicans in the House refuse to consider this kind of balanced approach - an approach that was pursued not only by President Reagan, but by the first President Bush, President Clinton, myself, and many Democrats and Republicans in the United States Senate. So we are left with a stalemate.

Now, what makes today's stalemate so dangerous is that it has been tied to something known as the debt ceiling - a term that most people outside of Washington have probably never heard of before.

Understand - raising the debt ceiling does not allow Congress to spend more money. It simply gives our country the ability to pay the bills that Congress has already racked up. In the past, raising the debt ceiling was routine. Since the 1950s, Congress has always passed it, and every President has signed it. President Reagan did it 18 times. George W. Bush did it 7 times. And we have to do it by next Tuesday, August 2nd, or else we won't be able to pay all of our bills.

Unfortunately, for the past several weeks, Republican House members have essentially said that the only way they'll vote to prevent America's first-ever default is if the rest of us agree to their deep, spending cuts-only approach.

If that happens, and we default, we would not have enough money to pay all of our bills - bills that include monthly Social Security checks, veterans' benefits, and the government contracts we've signed with thousands of businesses.

For the first time in history, our country's Triple A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet. Interest rates would skyrocket on credit cards, mortgages, and car loans, which amounts to a huge tax hike on the American people. We would risk sparking a deep economic crisis - one caused almost entirely by Washington.

Defaulting on our obligations is a reckless and irresponsible outcome to this debate. And Republican leaders say that they agree we must avoid default. But the new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. In other words, it doesn't solve the problem.

First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result. We know what we have to do to reduce our deficits; there's no point in putting the economy at risk by kicking the can further down the road.

But there's an even greater danger to this approach. Based on what we've seen these past few weeks, we know what to expect six months from now. The House will once again refuse to prevent default unless the rest of us accept their cuts-only approach. Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions. Again, they will demand harsh cuts to programs like Medicare. And once again, the economy will be held captive unless they get their way.

That is no way to run the greatest country on Earth. It is a dangerous game we've never played before, and we can't afford to play it now. Not when the jobs and livelihoods of so many families are at stake. We can't allow the American people to become collateral damage to Washington's political warfare.

Congress now has one week left to act, and there are still paths forward. The Senate has introduced a plan to avoid default, which makes a down payment on deficit reduction and ensures that we don't have to go through this again in six months.

I think that's a much better path, although serious deficit reduction would still require us to tackle the tough challenges of entitlement and tax reform. Either way, I have told leaders of both parties that they must come up with a fair compromise in the next few days that can pass both houses of Congress - a compromise I can sign. And I am confident we can reach this compromise. Despite our disagreements, Republican leaders and I have found common ground before. And I believe that enough members of both parties will ultimately put politics aside and help us make progress.

I realize that a lot of the new members of Congress and I don't see eye-to-eye on many issues. But we were each elected by some of the same Americans for some of the same reasons. Yes, many want government to start living within its means. And many are fed up with a system in which the deck seems stacked against middle-class Americans in favor of the wealthiest few. But do you know what people are fed up with most of all?

They're fed up with a town where compromise has become a dirty word. They work all day long, many of them scraping by, just to put food on the table. And when these Americans come home at night, bone-tired, and turn on the news, all they see is the same partisan three-ring circus here in Washington. They see leaders who can't seem to come together and do what it takes to make life just a little bit better for ordinary Americans. They are offended by that. And they should be.

The American people may have voted for divided government, but they didn't vote for a dysfunctional government. So I'm asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your Member of Congress know. If you believe we can solve this problem through compromise, send that message.

America, after all, has always been a grand experiment in compromise. As a democracy made up of every race and religion, where every belief and point of view is welcomed, we have put to the test time and again the proposition at the heart of our founding: that out of many, we are one. We have engaged in fierce and passionate debates about the issues of the day, but from slavery to war, from civil liberties to questions of economic justice, we have tried to live by the words that Jefferson once wrote: "Every man cannot have his way in all things...Without this mutual disposition, we are disjointed individuals, but not a society."

History is scattered with the stories of those who held fast to rigid ideologies and refused to listen to those who disagreed. But those are not the Americans we remember. We remember the Americans who put country above self, and set personal grievances aside for the greater good. We remember the Americans who held this country together during its most difficult hours; who put aside pride and party to form a more perfect union.

That's who we remember. That's who we need to be right now. The entire world is watching. So let's seize this moment to show why the United States of America is still the greatest nation on Earth - not just because we can still keep our word and meet our obligations, but because we can still come together as one nation. Thank you, God bless you, and may God bless the United States of America.

[whosaid1]

" partisan three-ring circus" This incompetent..."wannabe" suggests that it is "others" who are engaging in a "three-ring circus" !!! Hell, he really see's himself as the "ring-master". He reminds me of a 1950's wrestler (Gorgeous George) who would commit a foul behind the referees back...then when confronted by the referee, he would shake his head violently and say "not me...not me"!! What a joke "our President" is.....

[Jesusismysavior777]

This reminds me of a bible verse I know: 2 Samuel 12.

[slappy_mcjohnson]

by Nnmrnq

companies are profit driven. If conditions are profit friendly they will invest in expansion and they will hire.

===========

1) Just because a company has money doesn't mean they are hiring. They have to actually have a NEED for more workers. It doesn't help that we've pretty much given up manufacturing, as there are a lot of blue collar types hurting very badly right now.

2) And if one company doesn't want the profit, another one will take its place. We call that "capitalism".

.

[imnotimportant]

The Republican are going to talk themselves right out of their majority. The American people are sick of their lies.

The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that only 9% of the nation's voters Strongly Approve of the way that republicans are performing their role in governing. Seventy-Five percent (75%) Strongly Disapprove.

[imnotimportant]

yes I think there is a big difference between 44 and 76

[raflin1]

Hey "floppypez dispenser" read this:

"Would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates, and higher unemployment? And I think I know your answer."


Those words were spoken by Ronald Reagan.

[JRC_903]

I heard both speeches. I can not say I enjoyed the second one. In a way I feel sorry for Boenher. I know he is basically a good man. I am sure he feels he is a man of his word. However---- having given his word to a very vocal minority of people who could not care LESS about the future of this country was not smart -but NOW even as he knows they are wrong he is TRAPPED by his own words. At any rate, I doubt if this is what they call PROFILES IN COURAGE. The republicans want major budget cuts--they propose 1 Trillion in cuts. The president wants major reductions in the deficit-he proposes about 1.5 trillion in cuts--- and 1.5 trillion in increased revenues. And so that is the rub--- one wants to reduce the deficit--the other wants to reduce only the budget. The president wants everyone to share in the sacrifice--the Republicans only want the middle class to suffer. The Republicans want to kick the can down the road----only to revisit this issue in 6 months. They do want to hold the middle class hostage. We owe this all to the nasty little people who seem to want to bring down the country simply because they CAN. I have already tried to reach my congressman--his website is overloaded---good for him already. The senate website also seems slow.. So--folks if there was ever a time to talk to your reps and senators--NOW IS IT.

[retm-w]

Nnmrnq

As was boehners.

[mach1ponie]

Business is good, record profits, lowest taxes in years. If the rich wanted to hire people they would have by now. They simply found out that they don't have to. This helps the bottom line. A single CEO bonusus could hire how many people for how many years?

On the flip side, why should only the poor and middle class sacrifice and not the rich? Reason given are that the rich are the job creators. Well, let's see the jobs.

[retm-w]

Companies will never hire or invest in the U.S. the republicans don't want them to, since we have a democrat president.

[slappy_mcjohnson]

flopez - those are the same things which make huge corporations pay nothing. Stop ALL of the breaks.

Also, get rid of personal income tax, and make it a consumption tax. It works in TN, and 8 other states.

[ThePongster]

President Obama stated, "If that happens, and we default, we would not have enough money to pay all of our bills - bills that include monthly Social Security checks, veterans' benefits, and the government contracts we've signed with thousands of businesses."

This is absolutely not true according to Stephen Goss, Chief Actuary for Social Security. During a July 13, 2011 Budget Committee hearing Congressman Huelskamp asked Mr. Goss for additional information about President Obama's statement that he cannot guarantee that Social Security checks would be mailed August 3. Mr. Goss indicated that the Social Security Administration anticipates issuing checks, but that it will be a decision of the Obama administration as to whether or not the checks are mailed.

[retm-w]

The people who send the checks would be laid off, no money to pay them.

[jpowel1]

TO the united states congress both senators and house of representatives members. Stop playing a politacl form of chicken and get busy on formulating a compromise. I am sick and tired of you people screwing around with our future for the sake of rhetoric. IF the goverment had acted years ago when the housing collapse started we would not be in this mess now. SO its time to put aside differences, roll up the sleeves, put on a pot of coffee and hash it out until an agreement between all the parties involved (Replicians, Democrats,and the President) can handle.

If we do not get our social security check I will personally blame all of you when they forclose on our home because I cannot meet the house payment without my husbands social security check

[RealiteBites]

I really feel 'conned' by Barack and the way he held himself up to be a wonk during the campaign, as if his problem-solving skills were what was going to propel the Global economy out of the gutter that the Repuglies drove it into.

But he's not that at all - he's sure smart enough to be, which is why it was so easy to believe he was a wonk. But maybe he just doesn't really care to actually try and solve problems in a way that makes progress, he just wants to advance and maintain his political career.

Because everybody knows compromise is inferior to big picture analysis and problem-solving. All compromise takes is slicing and dicing - problem-solving requires listening skills as well as ingenuity. Most leaders use problem-solving (ie 'vision') ... and people then follow; Compromise can sometimes be like herding cats.

If Barack had big-picture problem-solving vision, he wouldn't see this as a case of philosophical difference - he'd know that BOTH Democratic ideas (for stimulus) and Republican ideas (for tax cuts) had FAILED. So therefore the solution lies in something other than some hybrid solution of the two previous failures.

What a Con-man. That being said, the Republicans are a GAZILLION times worse!!!!!!!!

[timthepatriot]

Glad the President finally decided to "go live" and try to get the people behind his agenda. Hope he hasnt acted too late to rally enough of the country to action in this case.

I voted for President Obama in 2008 and I may vote for him again, but it would be really nice to see him addressing the people more frequently so that the opposition isn't always given the floor to skew his initentions before the ever fully take shape.

It would be even nicer to hear him call for TERM LIMITS for members of Congress...

[retm-w]

Nmmrnq

You voted for bush twice didn't you.

[slappy_mcjohnson]

nmmrng - that explains a LOT.