Watch CBSN Live

Obama: GOP position on debt limit not "sustainable"

President Barack Obama makes an opening statement during a news conference in the East Room of the White House in Washington, Wednesday, June 29, 2011. AP Photo/Carolyn Kaster

Updated 3:20 p.m. Eastern Time

President Obama said Wednesday that the Republican position that they will not accept any tax increases as part of a deal to increase the debt limit is not "sustainable," adding, "everybody else has been willing to move off their maximalist position; they need to do the same."

Mr. Obama said Democrats have already taken on their "sacred cows" in the negotiations, including accepting spending cuts that hurt their constituencies and an openness to "look at" entitlement programs. Yet Republicans, he said, have refused to break from their opposition to tax increases for "corporate jet owners" and oil companies.

"If everybody else is willing to take on their sacred cows and do tough things in order to achieve the goal of real deficit reduction, then I think it would be hard for the Republicans to stand there and say that, 'The tax break for corporate jets is sufficiently important that we're not willing to come to the table and get a deal done,' or, 'We're so concerned about protecting oil and gas subsidies for oil companies that are making money hand over fist, that's the reason we're not going to come to a deal,'" he said. "I don't think that's a sustainable position."

Mr. Obama predicted "we will reach a deal" to raise the debt limit, adding that his "expectation is that they'll do the responsible thing."

Added the president: "Look, I think that what we've seen in negotiations here in Washington is a lot of people say a lot of things to satisfy their base or to get on cable news, but that, hopefully, leaders at a certain point rise to the occasion and they do the right thing for the American people."

"And that's what I expect to happen this time," he continued. "Call me naive, but my expectation is that leaders are going to lead."

The president said every observer who isn't a politician has said the necessary savings cannot come without including an increase in revenue. 

"And the revenue we're talking about isn't coming out of the pockets of middle-class families that are struggling, it's coming out of folks who are doing extraordinarily well and who are enjoying the lowest tax rates since before I was born," he said.

"If you're a -- if you are a wealthy CEO or a health -- hedge fund manager in America right now, your taxes are lower than they have ever been. They're lower than they've been since the 1950s," continued the president. "And you can afford it. You'll still be able to ride on your corporate jet; you're just going to pay a little more."


"Nobody wants to put the creditworthiness of the United States in jeopardy," he added. "Nobody wants to see the United States default. So we've got to seize this moment, and we have to seize it soon."

(At left, Mr. Obama's opening statement at the press conference, which focused on the economy.)

The Obama administration has warned of economic catastrophe if the United States does not raise its $14.3 trillion debt limit - which could mean default to creditors, the shutdown of much of the government and the stoppage of Social Security and other payments. Even if lawmakers come close to the deadline for raising the ceiling, they say, it could spook investors and have a significant, negative impact on markets.

On Wednesday, the International Monetary Fund warned that lack of action could mean a "severe shock" to global markets and the slow-moving economic recovery.

The U.S. actually hit the debt limit on May 16, according to the Treasury Department, but Treasury undertook a host of accounting maneuvers to buy time. Treasury Secretary Timothy Geithner has repeatedly warned that those measures will only get the country to a hard deadline of August 2nd, however - just over one month from today.

On Tuesday, House Speaker John Boehner called the August 2 deadline an "artificial date created by the Treasury secretary." Senate Minority Whip Jon Kyl said he expects the deadline to be moved back to later in the month.

In a statement after the press conference, Boehner said, "The President is sorely mistaken if he believes a bill to raise the debt ceiling and raise taxes would pass the House."

"The votes simply aren't there - and they aren't going to be there, because the American people know tax hikes destroy jobs," he added. "They also know Washington has been on a spending binge for many years, and they will only tolerate a debt limit increase if we stop it."

Boehner added: "[Obama's] administration has been burying our kids and grandkids in new debt and offered no plan to rein in spending. Republicans have been leading and offering solutions to put the brakes on this spending binge. The President has been AWOL from that debate."

At his news conference, Mr. Obama said "By August 2nd, we run out of tools to make sure that all our bills are paid, so that is a hard deadline." He called the consequences to not acting "significant and unpredictable," adding that if capital markets pull money out of the economy, it could mean an increase in interest rates and, with them, lost jobs.

He compared members of Congress to his daughters, Malia and Sasha, who he said get their homework done a day early, saying Congress can do the same thing.

"If you know you've got to do something, just do it," he said, going on to reference the fact that members are often on leave instead of working in Washington.

"You need to be here," he said. "I've been here."

Obama hammers Congress: Do your job

Republicans say any deal to raise the debt limit must also include an agreement on spending cuts that exceed the debt limit increase. The White House and congressional Democrats say they are open to a deal, but that it must include tax increases or the elimination of tax breaks and loopholes for major corporations and high-earning Americans. Republicans, led by Boehner, say such "job-killing tax hikes" are off the table.

House Speaker John Boehner talks to the press following a political strategy session on Capitol Hill in Washington, June 14, 2011.
House Speaker John Boehner. AP Photo/J. Scott Applewhite

Negotiators have been aiming to increase the limit by over $2 trillion with the same amount in deficit reduction, though there has been talk of a smaller increase. The $2 trillion figure would be expected to cover the country's borrowing needs until after the 2012 elections.

Last week, Republicans walked out of bipartisan negotiationson a deal led by Vice President Joe Biden, citing Democrats' demand for "tax increases." Democrats, meanwhile, suggested Republicans are "playing with fire" by holding up a vote on a debt limit increase.

The president said Wednesday that a "conceptual framework" for a deal is in place as a result of those negotiations, and that more than $1 trillion in cuts had been agreed on.

Mr. Obama met separately Monday with Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., in an effort to break the impasse. He has said he wants a deal by the beginning of July to give congressional leaders time to sell the package to members.

A recent CBS News poll found that 63 percent of Americans think raising the debt limit is a bad idea.

Wednesday's press conference marks Mr. Obama's 14th formal, solo White House news conference, reports CBS News White House Correspondent Mark Knoller. It's been nearly four months since his last press conference, on March 11th. At same point in his presidency, President George W. Bush had held eight news conferences.

If you include joint news conferences with foreign leaders at home and abroad - at which as few as one question per side is taken - Mr. Obama's news conference count today hits 82.

Obama: "Fuss" over Libya action is just "politics"

View CBS News In