Republicans: Obama State of the Union dims hopes for deficit-reduction deal

Republican lawmakers say a deal to reduce the deficit and replace $85 billion in automatic spending cuts set to take effect on March 1 is even less likely after President Obama's State of the Union address. 

While Obama tackled the deficit head-on in his speech, mentioning the word "deficit" 10 times at the top of his address, Republicans accused him of paying lip service to the debt in a speech that called for a higher minimum wage and new spending on programs Obama said were designed to lift people out of poverty. 

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Republicans say the president hasn't met his own goals for reducing the deficit, noting Obama’s pledge four years ago to cut the deficit in half by the end of his first term — a pledge that has gone unfulfilled.

"The president said we do not need a bigger government, but a smarter government, and I agree. But actions speak louder than words,” said House Majority Leader Eric Cantor (R-Va.).


"For four years, we have seen record deficits and mountains of debt heaped on our children and grandchildren. And for four years we have seen little to no action from President Obama or his Democratic colleagues in the Senate to take our spending problem seriously,” Cantor added.

Senate Republicans sounded just as skeptical.

“He has said that over and over and over,” said Sen. Dan Coats (R-Ind.), a co-sponsor of the only comprehensive bipartisan tax-reform plan in the Senate.

“What really counts is not what is said in the State of the Union or an inauguration address or a press conference in the White House. What really counts is the actual action that is taken and the president’s engagement in making that happen,” he said.

Republicans flatly rejected Obama's demand that they replace the $85 billion in spending cuts with a package comprised equally of spending cuts and tax revenues, a call reiterated by Obama on Tuesday. The impasse leaves the sequester more likely than ever to go into effect on March 1.

Obama has in the past taken credit for putting forward a $4 trillion plan to reduce the deficit. Republicans have challenged that claim, as well. (In October, PolitiFact.com found that Obama’s statement about having put forward a detailed $4 trillion plan was “half true.”)

They also see signs that despite his words on Tuesday night, cutting the deficit is hardly a priority for the president. 

In recent weeks, GOP lawmakers note, Obama has signaled the deficit problem is basically solved, given short-term projections showing a falling deficit. 

“This view defies reality,” Cantor said.

A CBO report issued last week found this year's deficit would fall below $1 billion and that the nation's deficit would drop to $430 billion by 2015. But the CBO report also found deficits would rise due to higher healthcare costs, and would near $1 trillion again by 2023. 

To the GOP, that points toward the need to enact reforms to curb the cost of Medicare.

Early in his first term, Obama called Medicare and Medicaid the biggest drivers of the federal deficit, sowing hopes among Republicans that he would later forge a deal to overhaul those programs.

The president offered reforms to cut hundreds of billions of dollars in Medicare and Medicaid spending during negotiations with Speaker John Boehner (R-Ohio) in 2011.

He frustrated GOP leaders after Election Day by backing away from his earlier offer to raise the Medicare eligibility age and showing little willingness to negotiate in earnest over major entitlement reforms.

His State of the Union address added to their sense of disappointment.

“I hoped that he would lay out his plan to save Medicare and deal with the out-of-control entitlement spending,” said Sen. Lamar Alexander (R-Tenn.). “It just is not a high priority for the president and it makes it very difficult to get done.”

Lawmakers generally agree they need to further reduce the deficit by $2 trillion over the next decade to bring the nation’s debt-to-GDP ratio under control. Actions taken in the previous Congress achieved about $2 trillion in deficit reduction.

“I was listening very carefully but there was no plan to do what needs to be done,” said Alexander. “He’s the president of the United States, he should lay out a plan.”

Alexander said there were about 30 to 40 senators on both sides of the aisle who are ready to work on a comprehensive deficit-reduction deal once Obama becomes more engaged.

Obama called for “modest reforms” to Medicare so that senior citizens and working families are not disproportionately burdened by deficit reduction. But Republicans say structural reforms must be made to the program.

The president also called for a “balanced approach to deficit reduction, with spending cuts and revenue”.

Republicans have balked at this, claiming it is an excuse to raise taxes and limit cuts to government programs.

Some Republicans are open to a compromise that would raise revenues through tax reform, but they say it must be matched with meaningful entitlement reform.

“I’ll be willing to close loopholes and generate new revenue if we do entitlement reform,” said Sen. Lindsey Graham (R-S.C.). “Revenue for entitlement reform makes sense to me. Revenue to fix sequestration is just a cop-out.”

Some Democratic lawmakers argue Congress did more than enough to cut spending over the last two years. The Budget Control Act included $917 billion in spending cuts and set up an automatic spending sequester of $1.2 trillion over the next decade that Obama and lawmakers in both parties are now trying to turn off.

House Democratic leader Nancy Pelosi (D-Calif.) said in a recent television interview, “it is almost a false argument to say we have a spending problem.”

Other Democrats agree. Sen. Barbara Boxer (D-Calif.) said the spending sequester for 2013 should be eliminated and its budget impact offset by closing a variety of “tax loopholes.”

“We’ve already had huge spending cuts. Huge,” she said.

The White House has pushed back against Pelosi’s claim.

White House press secretary Jay Carney said Monday, “the president believes we have a spending problem.”

But Republicans are skeptical whether Obama really believes that.

“Clearly, the president has never been very serious about deficit reduction,” said Sen. Pat Toomey (R-Pa.), who offered in 2011 a comprehensive plan that raised revenues through tax reform. At the time, he was a member of the deficit-reduction supercommittee.

“The fact is this year, assuming the sequestration goes into effect exactly as current law contemplates, spending will increase yet again, as it does each and every year without fail in this town,” he said. “We’re done with revenue, it’s time to get serious about spending.”