Washington (CNN) - In a dramatic concession to senior Democratic and Republican lawmakers, President Obama abruptly shifted his position Saturday and declared his public support for creating a fiscal commission that could propose sweeping tax increases and spending cuts to try to slash the soaring federal debt.
The White House released an unexpected written statement from Obama saying he now backs putting together a powerful commission created through a federal statute, a reversal from earlier this week when Vice President Joe Biden signaled in a private meeting with Sen. Kent Conrad, D-N.Dakota, and other key lawmakers that the administration would only support a weaker version of the commission by forming it through an executive order.
"The only way to solve our long-term fiscal challenges is to solve it together – Democrats and Republicans," Obama said in the written statement. "That's why I strongly support legislation currently under consideration to create a bipartisan, fiscal commission to come up with a set of solutions to tackle our nation's fiscal challenges – and call on Senators from both parties to vote for the creation of a statutory, bipartisan fiscal commission."
Conrad applauded Obama's decision in a written statement.
"The president is demonstrating exactly the kind of leadership we need to tackle our nation's long-term fiscal challenges," Conrad said. "His support shows that he is determined to do what is necessary to put us back on a sound long-term course."
A senior Senate source familiar with Biden's meeting last week with Conrad and other key senators suggested the administration's reversal came because lawmakers were adamant that they would not support an increase in the debt ceiling unless the administration supported the full-scale statutory fiscal commission as called for in the Conrad-Gregg proposal.
An increase in the nation's debt ceiling is coming up for a vote in the Senate on Tuesday, and there has been fear that failing to lift the amount of money the U.S. can borrow might further rattle the financial markets.
Conrad and the other Senators insisted to Biden that Obama had to support enactment of the statutory commission if he wanted to pass the debt ceiling increase, according to the senior Senate source familiar with the discussions, and that creating the commission through an executive order was not credible. A second Senate aide added that the upcoming debt ceiling vote, coupled with pressure from Tuesday's special election in Massachusetts, helped tip the administration.
It's still unclear whether the legislation sponsored by Conrad and Sen. Judd Gregg, R-New Hampshire, will pass on Tuesday. The senior Democratic aide said Obama's support will help bring along Democrats, but it's uncertain whether the bill will get the 60 votes needed to overcome a possible filibuster.
The Conrad-Gregg legislation would create a commission with 10 Democrats (eight members of Congress and two Obama officials) and eight Republicans (all from the House and Senate). It would have several months in 2010 to study the problem and then vote after the midterm elections on a reform package that could include dramatic tax hikes and spending cuts. If 14 of the 18 members approve the package, giving it a bipartisan nod, it would force an automatic up-or-down vote in the House and Senate on whether to implement the recommendations.
Such recommendations could include cuts to popular programs like Social Security and Medicare, which is why some liberals are opposed to formation of the commission; or proposals to drastically raise taxes to make up for budget shortfalls, which is why some conservatives have blasted the idea.
CNN first reported in December that Obama was privately giving serious thought to setting up such a commission, and that there was division within the administration about whether to give the panel real teeth by creating it with a federal statute or give it less power by forming it through an executive order that would not require up-or-down votes in Congress on the potentially explosive recommendations.
While some critics charge a commission would be a cop-out because it would punt Congressional decisions to an outside panel, the Senators pushing the plan believe the current system is broken and it will take a new mechanism to enact the wrenching changes that will be needed to get the budget back into balance.
"Our statutory task force proposal provides the best chance for developing a truly bipartisan solution to this problem," Conrad said in his statement. "No one political party can solve this on its own. We need both sides of the aisle committed to working together to confront the threat of runaway debt."
But Obama hinted at the partisan divide such a commission would face in his statement, which began by blaming the current situation squarely on the Bush administration.
"The serious fiscal situation that our country faces reflects not only the severe economic downturn we inherited, but also years of failing to pay for new policies – including a new entitlement program and large tax cuts that mostly benefited the well-off and well-connected," Obama said. "The result was that the surpluses projected at the beginning of the last administration were transformed into trillions of dollars in deficits that threaten future job creation and economic growth."
Now after a full year of fiscal IRRESPONSIBILITY, now he cares about being responsible....Riiiiiighhht! The only reason he cares is that because he got is butt handed to him in Virginia, New Jersey, and MASSACHUSETTS (of all places)....
He is a PROVEN complete and absolute fake and he is faking once again!
"...a fiscal commission that could propose sweeping tax increases and spending cuts to try to slash the soaring federal debt."
"Sweeping tax increases?"
Just try it, Dems...
Remember, November is coming...
Uh-oh. Obama doesn't have a super majority and he has to actually work with those on the other side of the aisle. I think it is hilarious that the Dems had a super majority and still couldn't must much more than an ill-advised stimulus package. What a pathetic party. Repubs, that doesn't mean that you are any better. It's about time that the independents in this country start kicking all of these bums out. Long live the republic.
If this is all Bush's fault then things are worse than i thought. Obama has been doing nothing for a year. Oh that my boss would let me blame, for the next year, the previous person who had my job.
Bi-Partisan – HA why would that work now when it didn't work for Health Reform – didn't they all sit down – this Senate Bi-Partisan committee to agree on a Health Reform Bill and the GOP said no to anything that would have been seen as a help to the people. HA I say again. Let's see how this will work since the GOP are against tax increases – ROFLMAO NADA NOTHING will be done.
What nonsense! Conrad??/ A leader? And any Pub who is fooled by this 'reluctant dragon' dragged into 'raising taxes and sweeping spending look-ats' is so dumb they too should be defeated by the voters. Obama got us into this economic mess and his policies are making it worse for profit, innovation, new energy resources using our old huge domestic energy resources, plus his Pokulas, his bribes to Senators with my money, your money. Enough of this socialist. . No spending will create private sector jobs. We do not need any more public govt, federal jobs which end up being SEIU-ACORN ones or illegal ready to vote Dem just in time for Nov. No more blaming Bush Alinsky. You are wearing the shoes so stop shoveling you know what to obscure the real problem. You and your socialist pacifist minions in Congress. No Commission will solve this problem of no jobs. Oh wait, Tax Cuts like JFK, Reagan and W did. Yeah that'll work, Even for an inept dunce like you Mr. Messiah.
Conrd stated: "The president is demonstrating exactly the kind of leadership we need to tackle our nation's long-term fiscal challenges," Conrad said.
Huh? Then why are there talks of a 2nd "stimulous? You cant fix this by ridiculous spending!
Conrad stated: "No one political party can solve this on its own. We need both sides of the aisle committed to working together to confront the threat of runaway debt".
Then cut out the closed door, single party meetings! You also need both parties to work REAL heathcare reform. What you guys have been pushing on us ain't it!
and is therefore useless....Obama cannot implement his socialist agenda unless he can tax and spend......so this will turn out to be just another smoke screen.....
When are our legislators going to wake up and realize the only way to lower the debt is to STOP SPENDING OUR MONEY!!!! And I don't have a clue how Obama can even begin to blame this on Bush, seeing how much he's already spent just in his first year. I don't need to pay a commission millions of dollars to figure it out, but it seems our government isn't smart enough yet. Probably never will be. When you're over-budget, you don't keep spending and look for a new job you hope will pay you more, you CUT YOUR SPENDING. How many brains does it take to figure that out? Apparently more than are currently in Washington.
A little humble pie has finally forced you to work with the Repubs! I hope everyone sees that your previous bipartisan work meant, you must agree 100% with me Repubs or screw you!!
We are already taxed to death. More taxes would kill the anaemic recovery we are experiencing. What the government needs to do is drastically cut spending. Cut welfare, cut medicaid, cut food stamps. If people don't pay taxes, they should get government benefits. it's time for some tough love.
Listening to Obama blast Bush for the deficit while BO continues to spend insane amounts of money is sickening. Other Presidents have "inherited" (that word again!) problems from previous administrations, but Barry is the King Whiner of them all. He never opens his mouth without trying to dodge responsibility for the current situation...what kind of "leader" is this?
He can't be out of office too soon.
How much will my taxes go up to finance how many more government programs I don't use?
How much longer can we continue to feed off of each other without producing any marketable commodity? Or sustain an essentially valueless currency?
Is this what it looks like from the inside, the death throes of a falling empire?
Once again the "whiner-in-chief" can't make a decision without blaming it on the previous Administration first. I hope he continues to fail, just like the Democrats hoped and prayed for Bush to fail. So far so good.
He's half right. There is no need to increase taxes, which would be a drop in the bucket income-wise, but further cripple the recovery of jobs and commerce. However, there need to be SERIOUS cuts in the runaway spending.
Congress needs to learn to do what the rest of us have learned to do: stop spending money we don't have.
and if Scott Brown hadn't won, what would Obama and the Dems be doing???
President Obama needs to worry first about the unemployed here in this country. He approved the extension on benefits on Nov. 4th, 2009, and as of today, not one penny has come through. Many of us have to live with others, or on the street, while his wife begs for money for Haiti.. Charity begans at home, we have people who have been on the street for years, and yet he worries more about this country's debt and Haiti. sorry, that dog won't hunt! Not that I expect him or anyone else in gov. care about his. But, ELECTIONS will come again, won't they?
So working together on the spending is important, but working together on healthcare isn't important? How does this guy reconcile this stuff?
CNN you have ran me away from your web page, I can no longer read the garbage you write to promote your company, I am moving on to MSNBC so long and good luck, I just want to hear the truth and nothing but the truth.
If obamaspender hadn't tried to bankrupt the country, we wouldn't need a commission.
As much as we Americans hate to here the phrases cuts and tax increases it is what has to be done. Obama I think is finally realizing how ugrent the national debt issue is becoming. We cannot stay on the same track, We must take drastic measures otherwise our debt will continue to sky rocket and our economy will not recover
Now that they've put his feet to the fire, I guess he'll consider taking some action. It's about time.
Maybe Mr. Obama did feel that earthquake that hit DC?
A commission to tell him and congress that they are spending to much money, what a great idea.
How about congress and the President focus on spending less money, paying down the national debt and creating jobs, now that would be a platform for a candidate to run on.
"Read my lips: no new taxes.” George H.W. Bush, 1988.
“Middle class families will see their taxes cut—and no family making less than $250,000 will see their taxes increase.” Barrack Obama, 2008.
So far, so good.
Obama and all polititions need to respect taxpayer money. Instead of creating pet projects, they need to trim back and act a little more like a private company.
Government waste hurts Americans.