Obama: Value-added tax a 'novel' idea for the U.S.

A value-added tax (VAT) is a "novel" idea for the U.S., President Barack Obama said Wednesday.

The president neither ruled in nor ruled out implementing a VAT on goods and services, saying that he is waiting to see what recommendations the committee he's set up on deficit reduction will generate.

"You know, I know that there's been a lot of talk around town lately about the value-added tax -- that is something that has worked for some countries," Obama said in an interview with CNBC. "It's something that would be novel -- for the United States."

The executive director of the White House panel on deficit reduction, Bruce Reed, has told Fox News that the VAT is in the mix of options for the commission, while House Speaker Nancy Pelosi (D-Calif.) said last fall that the VAT is among a number of revenue-generating options that are "on the table."

The VAT is a tax on manufacturers at each stage of production on the amount of value an additional producer adds to a product.

The president said that before he says the idea makes sense or not, he "want[s] to get a better picture of what our options are."

"And my first priority is to figure out how can we reduce wasteful spending so that we have a baseline of the core services that we need and the government should provide," Obama explained. "And then we decide how do we pay for that.  As opposed to figuring out how much money can we raise and then -- not have to make some tough choices on the spending side."