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."
Would thing that the fastest way to get out of debt is to stop spending money like it was free. That's the biggest issue for me.
I find it ironic that only after losing 2 states to the GOP that he's just "now" finding his voice over listening to "The Voice of the American People" when we've been screaming at him from the tops of our lungs for the last year.
Find that hard to stomach.
Another cnn drama as usual
this is why our county is going down the drain...every day Obama has a different story. Why can't america get it? He's an inexperienced excuse of a president!!
Way to go Supreme Court and ReThuglicans! We're on our way to becoming a fascist country. Actually not. Thank God we have an intelligent leader like Obama. Keep up with the extreme moves like that. You insure his reelection (and more liberal judges on the bench!) :)
Looks like B.O. is doing the same thing Bill Clinton did when the
Repubs clobbered him in the 94 mid term elections.
Maybe now Bipartisanship will occur.
wait a second, do you mean that the Dems recklessly spending money this past year following our previous nitwit president's spending spree is going to lead to more taxes? SHOCKING! But, wait, dont we need to spend more money on "health care reform" to save more money?!
Let's see Obama quadrupled the debt, passed a so called shovel ready stimulus plan that he said was needed to keep unemployment down, that it would not go above 8%, then he's trying to take over the healthcare industry, and pass cap and tax. He is now taking on a PHONY populist attitude and is attacking banks, lobbyists and big business. Now the COMMUNITY ORGANIZER IN CHIEF wants another commission to get a handle on the SOARING DEBT. He is clueless or is destroying this economy on purpose. Either way it is detrimental to America.
Conrad is a lackey! This President has no leadership experience. He is merely listening to people who actually have a clue card...FINALLY!
Another commission to shield nationally elected officials. Didn't they all takes oaths upon entering office to preserve, protect and defend the Constitution? Just more smoke and mirrors to avoid the public outrage and the miserable jobs they've all done and to deflect criticism during the up coming elections. We know what it will take to get the country back on track, but they don't have the gonads to make the hard decisions.
This man – Obama – has spent RECKLESSLY while VACATIONING and playing photo man and entertaining while WE are paying for his GIVE-A-WAYS. Let's charge HIM for the waste he has created.
Bi-Partisan – CRAP – he is going to now Pay the Piper for his egonmaniacal persona.
Great, after letting Lieberman and Nelson hijack and kill the health care bill (at the behest of the insurance lobby), you're going to gut Social Security to suck up to the remaining Blue Dogs. We did not elect you to be a Republican. We already have those. It's time to remind these people who elected them. It wasn't Glenn Beck.
He's grasping. His misguided remarks last week resulted in 6% sell off in the markets. Just shut your pie hole Obama. You are harming the economy every time you open your mouth.
If they can somehow use this commission to do good for the country, slash government spending, and put together a real plan which pays down the debt (until its gone), with a plan to reduce taxes as the debt is paid down, it would be fantastic. if, if, if.....
He's still whining like the extreme left liberal he his.
Econ 101...uncertainty is bad for business and the markets. Just stfu and go back to Chicago.
Well I'm just glad to see that he's getting back on track. Most importantly though, we need JOBS.
How about a Constitutional Amendment to require a balanced budget? Nah, a commission will make it look like they are considering being fiscally sound while they still keep handing our money out to banks, deadbeats, special interests and unions.
Another concession, another sign of weakness. A smart man with good ideas, but with little experience and backbone to see it through. Obama, you cannot govern by consensus. LBJ got the Civil Rights Act and the Voting Rights Act passed into law by screaming, cussing, threatening and blackmailing in 1964! Take notes.
George W. Bush got tax cuts for the rich, funding for two wars and TARP money for Wall Street with the help of Democrats, but Obama cannot get healthcare reform passed with a super majority of Democrats and no help from the Republicans.
And Bernarke needs to go. He has always been a flake.
This is just a back door way to cut Soc. Sec. and Medicare so that both parties share the blame & the average Joe gets screwed again. The Republicans have long wanted to destroy Soc. Sec. and Medicare and now they will get help doing it by the Democrats.
Crooks one and all.
This is NUTS! Obama wants to raise taxes on Americans who already have a hard time putting food on the table. Enough! Let the American people keep at least party of their pay checks.
The President is still trying to dig us out of the Bush Administration mess, which will unfortunately probably occupy much of his time and energy for some time. We can only hope that eventually, he will be able to accomplish something positive and constructive for the country, such as health insurance reform and creation of jobs.
It is sad that it took such public outrage and several deafening political defeats for him to finally think "gee, maybe I should consider trying to decrease the debt and deficit that I have racked up in a matter of less than a year"....
Of course, he just couldn't manage to discuss it (like every other thing) without uttering some form of "we inherited" or "past 8 years".
Another campaign promise about to be broken! Watch out America! Obozo is going to drastically going to raise our taxes! No big surprise folks. You had to know it was coming!
Oh, Obama. I guess it is beginning to dawn on you that it is a very difficult job to be president of the United States of America. No matter what you do, someone is going to be upset with you. It goes with the job. So buck up and be a man. Stop just saying pretty words that you think we all want to hear and be a leader. I hope that you are beginning to realize that you owe George W. Bush a really big apology.
If President Obama is trying to create a fiscal commission, then what is job of our CONGRESS??? I think they are trying to create a new branch of the government that mimics socialist reform. I fear that if this commission is created, they will have unlimited power to tell the other agencies what they can and cannot spend their budgets on. So what do you do with that? Every government agency will be answering to this commission and not to congress. As a voter we will loose our control of the government operates.
Be aware that the democrats want to radically change the face of government to get their agenda through. If they can create a commission with this type of control then they will have a hand in every part of government regardless of who is voted into congress over the next several years.
Also note that President Obama is trying to do this with an executive order and not with a vote of congress. What kind of power does he think he has? He has told us that the economy is bad, so we get a little relief over the past months and things start moving up, including the stock market, and he makes a speech that kills 200+ points off the stock market – all in one day!!!
If our President keeps this up he will politically hang himself and his party!!
Great. Cuts in services to the poor and elderly along with dramatic tax increases. I can hardly wait. Change you can believe in and go to the poor house with.