January 23rd, 2010
09:21 PM ET
13 years ago

Under pressure, Obama backs fiscal commission

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[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2010/images/01/23/art.obamafiscal.gi.jpg caption="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."]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."

Filed under: Congress • national debt • Popular Posts • President Obama
soundoff (123 Responses)
  1. Peter E

    A decade overdue!

    January 24, 2010 01:03 am at 1:03 am |
  2. phoenix86

    Nothing like a tax increase to prolong the Obama recession or turn it into the Obama depression.

    Why do we continue to elect economic illiterates to public office? Last week Obama single handedly wiped out billions of dollars in market value (check your 401(k) if you doubt). Now all he proposes is a continuation of democratic tax increases.

    Cut spending AND taxes.

    January 24, 2010 01:11 am at 1:11 am |
  3. Dan, TX

    Republicans and Democrats have already agreed that the republican party and the Bush Administration mismanaged the country and caused all the debt we are in by passing all these entitlements and waging two wars and charging it all to our children. This is a bipartisan consensus. Now it will take a bipartisan effort. Our generation (20-50 year olds) will have to suffer greatly with fewer benefits and higher tax burdens than our parents and grandparents who screwed us to take all the benefits for themselves and leaving us nothing.

    January 24, 2010 01:13 am at 1:13 am |
  4. FixItMan

    Fiscal restraint will mean spending habit changes that severely impact all programs and special interests. Will our representives be willing to support higher taxes on the middle class or take cuts in their own states, even if it means polical suicide? The answer needs to be yes of us to get spending under control and reduce out debt.

    January 24, 2010 01:16 am at 1:16 am |
  5. Sniffit


    is this guy serious?

    take back the 787 bilion for starters

    and we need bigger government to check how we spend money>

    obama doe snot get it

    he just does not get it

    January 24, 2010 01:16 am at 1:16 am |
  6. mario ca

    Do you miss something Ed, the president talk about it in Ohio, Cnn lost a lot of credibility, no wander why your rate are going down.

    January 24, 2010 01:18 am at 1:18 am |
  7. Willy Brown

    The real community organizer comes out of the closet at last.

    January 24, 2010 01:19 am at 1:19 am |
  8. Matt

    Are you kidding me? NOW he wants to work with Republicans? Of course he would like to share the blame with them for solving the problem and raising taxes, but he was willing to create the problem without them? I hope Republicans aren't stupid enough to fall for it...

    January 24, 2010 01:19 am at 1:19 am |
  9. Scott Alexander

    Yet more expected spinelessness from our President. First he backs off the public option and now he's going to tax the middle class and poor because he doesn't have what it takes to actually lead and do what he said he was going to do which is to fix this country.

    More of the same of what we had during the previous 8 years before Obama – not a shocker if you've been paying attention this last year.

    January 24, 2010 01:22 am at 1:22 am |
  10. Steve

    Isnt that supposed to be Congress' job? Well, maybe with enough commissions we can fire our congressmen as they wont have anything to do.

    January 24, 2010 01:24 am at 1:24 am |
  11. Mike

    It's great that the Congress and the President will finally be doing something about the deficit, using something like the Greenspan Commission. It's too bad that the Congress is basically admitting that they can't do their job and need political cover of a commission to hide behind.

    January 24, 2010 01:33 am at 1:33 am |
  12. e.c.coleman

    Incomprehensible Incompetency.........this is obama!

    obama is like a cat chasing his tail.
    he doesn't know what to do first, and is not qualified to make a decision about anything, especially our Government.

    presently, the world is seeing the destruction left if the wake of
    obama's mismanagement and lack of leadership.

    All of obama's misjudgments and bad decisions have come about BECAUSE obama was Unqualified and too Inexperienced. with no management skills or knowledge of Economics and Management.

    obama should resign before he is run out of office.
    this will happen, because obama is making all the wrong decisions for the citizens of America.

    January 24, 2010 01:33 am at 1:33 am |
  13. LiarInChief

    This is the man the LSM put in the WH.

    A two month senator that had no executive experience, never run anything like a commerical fishing operation, a small town, or a state. No clue on what kind of people he would need to surround himself with to move this country forward. You are as good as the people you surround yourself with.

    After one year in office and 22% unemployment and he decides its jobs. To busy buying car dealerships to pay off the union thug bosses. To busy with back room deals. Our government is corrupt and they don't even care if they throw it in our faces. We have never seen a congress and LIC like this.

    I watch this man and the LSM told us Sarah Palin was the stupid one. Mayor Sarah Palin that double and triple the size of her small town. How she passed ACES that created 12,500 jobs in the oil business in 2009. How she put 40 billion dollars in funds for a rainy day.

    I know SP was only the VP but how was the LSM able to get away with smearing and distorting this woman's executive experience. Obama had no executive experience and SP had probably 10 years of executive experience. Not only that she knew had to surround herself with the right people to provide her with the data needed for her to make the right decisions for her state.

    Can this CIC even make a decision let along the right decision?

    It doesn't matter if there are 5 million jobs created before 2010.

    We are going to throw everybody out in 2010.

    January 24, 2010 01:38 am at 1:38 am |
  14. Mike in MN

    It's clear from Obama's comments and his actions since he took office that he never was serious about uniting the nation and finding bipartisan solutions.
    Now he seems resigned to having no choice. I don't think he will cooperate. He is in reality a far left progressive liberal. Blue Dogs and Republicans can find common ground but there is very little to be found between liberals and Republicans. If Obama stays to the far left he is doomed. Only 20% of voters say they are liberal. Of the remaining 80%, 40% say they are moderats and 40% say they are conservative. There will never be a majority voter support for Obama's liberal progressive agenda. He campaigned and won as a centerist. His presidency will fail as a liberal progressive.
    All his comments after Brown's win in Mass say he still does not get it.

    January 24, 2010 01:39 am at 1:39 am |
  15. murli

    No tax increases. Only spending cuts.
    Abolish Dept of Education. Slash EPA's budget to 10% (cut 90%).
    Slash Dept of Energy budget to 10% (cut by 90%)
    All those 3 entities are useless.
    More cuts in other Departments.

    White House admin and czars budget should be cut by 30%

    January 24, 2010 01:43 am at 1:43 am |
  16. Mark D

    more taxes??? yes!!!

    January 24, 2010 01:48 am at 1:48 am |
  17. RNC = DNC = politics as usual

    Obama last year – we will steam roll over the opposition. I don't want to hear from anyone.

    Obama this year – um I think we could work with others. (becuase I have too).

    I guess he will (be forced) to keep his promise of bipartisanship.

    January 24, 2010 01:54 am at 1:54 am |
  18. R.W.

    Obama, shut up about the previous administration! You are failing at leading, and never take responsibility....what a child. By the way, the Congress has had a Democratic majority since 2006! Yes, since 2006 they could have reduced the debt or improve but didnt. And all the economic problems happened since then, but Obama likes to blame others so of course he doesnt divulge those details.

    January 24, 2010 01:56 am at 1:56 am |
  19. Rob

    Swell, new taxes pay back bailout money that I did not think should be spent in the first place. One of the reasons I did not vote for this guy to start with.

    January 24, 2010 02:11 am at 2:11 am |
  20. Spider

    Here it comes, folks.
    Hope and Change.
    Hope you can pay your taxes with the change in your pockets.

    This is exactly why Obama wanted so badly to push through his Health Reform before midterm elections. If he's got a few more people insured, before we cut Medicare, then the voter backlash might be less severe.

    And for those of you who so easily decry the seniors on their "socialist" medical coverage, keep one thing in mind. They worked their entire lives for this "benefit". The considered alternative, seems to be, cut their coverage and give it to people who pride themselves in never working a day in their lives.

    Does that really sound fair?

    January 24, 2010 02:22 am at 2:22 am |
  21. in AK

    that's all obama is about!! taxes!!! obama, one and done!

    January 24, 2010 02:23 am at 2:23 am |
  22. Wes

    The National Debt has the potential to undo our country, and it must be reduced. We have lived beyond our means, as a country, and we need to make significant changes to our national spending habits. This proposal is a step in the right direction, and is being taken because congress, as a whole, and other politicians have failed to take the necessary steps. Whether Democrat, Republican or Independent, all must realize that spending must be curtailed and revenue (taxes) must increase. These measures must apply to all. The interest on the National Debt was over 400 billion dollars last year. Thats money that can not be spent on other services, like education, defense, health, science, the environment and infrastructure, the list goes on.
    Every administration since 1969 has increased the size of the National Debt. Even the Clinton administration, which is often touted as running budget surpluses, added to the National Debt, more than 1.2 trillion dollars. The reality of the situation is somewhat difficult to accept, but we, not our children or grandchildren, must deal with the situation right now. Pushing it further down the road will lead to the Nation's demise as entitlement programs, spending practices and interest payments on the debt overwhelm our country's ability to care for itself.

    January 24, 2010 02:27 am at 2:27 am |
  23. SHERIC

    CNN,please tell the people the truth.This is our country.And we are in perilous times.When you repeatedly over look the glaring issues with this administration,you fail the American people.I am past being angry,now I am frightened.You know what is going on.Why do you spin and dodge?Many times you cover for President Obama,by ommiting any negative information.Wrong is still wrong,no matter what the political fall out may be.

    January 24, 2010 02:48 am at 2:48 am |
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