–Despite Differences, Debt Limit Increase to Pass

By Denny Gulino

WASHINGTON (MNI) – President Obama, getting more impassioned the
longer he spoke, Tuesday defended the tax-cut compromise with
Republicans as necessary to keep the unemployed “hostages” from being
harmed.

Obama, who took to the news conference podium as Democratic
opposition to his Monday-night deal with Republicans threatened to grow
rather than fade, used analogies to make his points, saying Social
Security and Medicare could have been viewed as betrayals of ideal
positions in their beginnings, but later they grew “to help a lot of
people.”

Under a no-compromise criteria of not bending on “some abstract
ideal,” Social Security and Medicare could have been considered
betrayals, forgetting, he said, “This country was founded on
compromise.”

Obama generally dismissed concerns that Republicans would balk at
raising the debt limit, a vote that will be necessary in the spring.
“Here is my expectation, and I’ll take (House Speaker elect) John
Boehner at his word,” Obama replied, “that nobody, Democrat or
Republican, is willing to see the full faith and credit of the United
States government collapse.”

On Republicans as hostage takers, “I’ve said before that I felt
that the middle-class tax cuts were being held hostage to the high-end
tax cuts,” he said. “I think it’s tempting not to negotiate with hostage
takers — unless the hostage gets harmed. Then people will question the
wisdom of that strategy.”

“In this case, the hostage was the American people and I was not
willing to see them get harmed,” he continued. “This is not an abstract
political fight.”

As to the fundamental question posed in different ways throughout
the news conference, of why he didn’t stand his ground, Obama found
several different ways to emphasize the importance of compromise when
necessary. “I couldn’t go through the front door at this country’s
founding,” he said. “If we were really thinking about ideal positions,
we wouldn’t have a union.”

His job, Obama said, “is to make sure that we have a north star out
there — what is helping the American people live out their lives, what
is giving them more opportunity, what is growing the economy, what is
making us more competitive.”

He said that “at any given juncture there are going to be times
when my preferred option, what I’m absolutely positive is right, I can’t
get done.” Referring to the lack of 60 votes in the Senate to deny
Republicans tax cuts for the rich by the Dec. 31 deadline, Obama said
Republicans on Capitol Hill would only be stronger in the New Year’s
Congress, so he decided not to fight the issue for the next several
months.

“So then my question is, does it make sense for me to tack a little
bit this way, or tack a little that way, because I’m keeping my eye on
the long term and the long fight, not my day-to-day news cycle,” he
said.

Obama said he kept his promises on health care and other
initiatives, “and if I haven’t gotten it done yet, I’m still trying to
do it.”

To Democrats, he said, “Let’s make sure we understand this is a
long game” and to Republicans, “I think this is a good agreement,
because I know they are swallowing some things that they don’t like as
well and I’m looking forward to seeing them on the field of competition
over the next two years.”

Perhaps most striking was the way he described Republicans as
“hostage takers,” saying tax cut extensions for the middle class and
unemployment benefit extensions for the unemployed were being held
hostage to permanent tax cuts for the rich by the GOP.

“The single most important jobs program we can put in place is a
growing economy,” he said he would tell his fellow Democrats. “For us to
have another three, four, five months of uncertainty, not only would
that have a direct impact on people who would see their paychecks get
smaller … but in terms of the macroeconomics, that would have been a
damaging thing.”

On jobs, he said his expectation is that the unemployment rate is
going to be going down because of a growing economy, but how fast, he
said he is not going to make a prediction, but “this package will help
strengthen the economy, of that I’m confident about.”

On deficits, Obama said that in the next two years of his term will
be a “big debate” on national priorities and how to pay for them that
will involve “painful cuts.”

** Market News International Washington Bureau: 202-371-2121 **

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