Obama: Americans back me on debt deal

Updated 1:02 p.m. Eastern Time

President Obama on Friday pointed to polls to argue that his proposal of a "balanced approach" on a debt deal - one that includes revenue increases as well as spending cuts - is what the American people want.

"My Republican friends have said that they're not willing to do revenues, and they have repeated that on several occasions," he told reporters at a news conference at the White House. "My hope, though, is that they're listening not just to lobbyists or special interests here in Washington, but they're also listening to the American people. Because it turns out, poll after poll, many done by your organizations, show that it's not just Democrats who think we need to take a balanced approach, it's Republicans as well."

A Gallup poll released Wednesday found that only 20 percent of Americans support a deal that only includes spending cuts, something Republicans have insisted on. Another 30 percent wanted a deal that was "mostly" spending cuts, and 32 percent wanted a deal split equally between spending cuts and tax increases. Eleven percent favored a deal that was mostly or all tax increases.

"The clear majority of Republican voters think that any deficit reduction package should have a balanced approach and should include some revenues," Mr. Obama said. "That's not just Democrats. That's the majority of Republicans." (That Gallup poll found that only one in four Republicans favor a deal that is only spending cuts.)

The president reiterated his desire to see lawmakers "do something big," saying, "We have a chance to stabilize America's finances for a decade, for 15 years or 20 years, if we're willing to seize the moment." An agreement to do so requires "shared sacrifice," he said, including cuts to defense spending, dealing with entitlement spending (including Medicare), and revenue increases.

He said he is still pushing for "a big deal" -- he has set $4 trillion as a benchmark in the past -- but also seemed to acknowledge that a smaller (if still "ambitious") deal of around $2 trillion is now more likely. He said he has told congressional leaders that "If we can't do the biggest deal possible, then let's still be ambitious, let's still try to at least get a downpayment on deficit reduction."

He said he indicated that that is something "we can actually accomplish without huge changes in revenue or significant changes in entitlements, but we could still send a signal that we are serious about this problem."

The president said he wants congressional lawmakers to come back to him within 24-36 hours with a plan, saying that "if they show me a serious plan, I'm ready to move, even it requires some tough decisions on my part."

A plan that includes spending cuts in excess of $2 trillion but is "not asking anything from the wealthiest among us or from closing corporate loopholes -- that doesn't seem like a serious plan to me," he added.

Mr. Obama's comments follow an appearance Friday morning by House Speaker John Boehner, who says Republicans are leading where the president is not. House Republicans plan a vote next week would raise the debt ceiling in conjunction with passage of a balanced budget amendment, despite the fact that such an amendment has virtually no chance of passage. (Mr. Obama said Friday that "we don't need" a balanced budget amendment.)

Obama: We don't need a balanced budget amendment

Boehner said in response to Mr. Obama's comments that "President Obama has been talking tough about cutting spending, but his deeds aren't matching his words."

"While Republicans have focused on the big problems we face, this White House has focused on protecting the status quo," he said. "The same holds true for entitlement spending, where the White House has been talking in terms of nickels and dimes at a time when trillions of dollars in serious reforms are needed to preserve the programs and put them on a sustainable path."

At a closed-door meeting Thursday, Mr. Obama told lawmakers "it's decision time" for a deal, a Democratic official familiar with the talks said. That meeting, which came after a contentious session Wednesday, was described as "very cordial" - though a breakthrough remained elusive.

Boehner: Obama has no debt plan. Republicans do
Obama presses on debt deal: "It's decision time"
Boehner says too many people trying to make deal

The Obama administration and many economists, including Federal Reserve Board Chairman Ben Bernanke, have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow -- now $14.3 trillion -- by August 2. Yet lawmakers remain far apart on a deal.

Republicans, who control the House of Representatives, have said they will only vote to increase the debt limit in exchange for a deficit-reduction package larger than the amount of the increase. Democrats are in favor of such a package, but there is a major point of contention between the parties: Republicans want the deal to include only spending cuts, while Democrats say it must also include revenue increases as well.

If the debt ceiling is not increased by August 2, the administration says, the United States will no longer to be able to pay its obligations, potentially resulting in default to creditors, the suspension of Social Security checks and other benefits, an increase in interest rates and a host of other extremely serious and negative economic consequences. Administration officials have suggested a deal must be in place by roughly July 22 in order to get a deal through Congress in time.

"This is not some abstract issue," Mr. Obama said Friday. "These are obligations that the United States has taken on in the past. The Congress has run up the credit card, and we now have an obligation to pay our bills. If we do not, it could have a whole set of adverse consequences. We could end up with a situation, for example, where interest rates rise for everybody all throughout the country -- effectively, a tax increase on everybody -- because suddenly, whether you're using your credit card, you're trying to get a loan for a car or a student loan, businesses that are trying to make payroll, all of them could end up being impacted as a consequence of a default."

On Wednesday, ratings agency Moody's put the United States' Aaa bond rating under review for possible downgrade as the deadline approaches, and Standard and Poor's quickly followed suit with its own warning of a possible downgrade; on Thursday, Geithner said bluntly, "we're running out of time."

There has been growing momentum around Senate Minority Leader Mitch McConnell's "back-up plan"to effectively hand responsibility for raising the debt ceiling over to Mr. Obama. That would allow Republicans not to have to vote to raise the debt ceiling, but it could also mean no spending cuts in conjunction with the debt ceiling increase. That prospect angers fiscal conservatives.

"This proposal is a dereliction of duty by Senator McConnell and everything that's wrong with Washington," Club for Growth President Chris Chocola said Friday of the plan. "It's nothing more than a legislative maneuver by so-called Republicans to avoid responsibility for America's spending problem."

Mr. Obama described the McConnell plan as "the least attractive option" Friday, saying that "if we take that approach, this issue is going to continue to plague us for months and years to come."

Asked for specifics about what he was considering as part of a debt deal, Mr. Obama said "we've said that we are willing to look at" raising the retirement age and means testing Social Security of Medicare. He said that while he sees those two programs "as the most important social safety nets that we have," by "making some modest modifications in those entitlements can save you trillions of dollars."

More coverage of the debt limit from CBS MoneyWatch.com:

Jobs: The elephant being ignored in deficit talks?
Did Republicans just force the Fed into QE3?