Opinion: Weekly remarks: Jon Kyl warns new taxes stall jobs; Obama warns time short for deficit deal

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Weekly remarks by Sen. Jon Kyl, as provided by Republican Party leadership
Good morning. I am Senate Republican Whip Jon Kyl of Arizona.

By now, most Americans know that lawmakers in Washington are engaged in a difficult debate about the nation’s ‘debt ceiling,’ the legal limit to the amount of money the federal government can borrow.

The debt ceiling is currently set at a little more than 14 trillion dollars, and if Congress and the president don’t reach an agreement to raise it by this coming Tuesday, the Treasury secretary tells us America will no longer be able to pay all its bills.

The consequences of missing this deadline could be severe, precisely because Washington....

...borrows so much money -- more than 40 cents out of every dollar it spends. So, spending would have to shrink by 40% very quickly.

What’s more, markets would likely respond, dropping in value and hurting the retirement savings of millions of Americans.

Republicans have tried to work with Democrats to avoid this result and put our country on a better path, but we need them to work with us.

We start from the understanding that the reason the debt ceiling is a problem is because of runaway Washington spending. So, Republicans have been united in the belief that raising the debt ceiling without making significant spending reductions would be irresponsible.

With debt crises rolling across Europe, we know it is only a matter of time before people start to question whether America can sustain its huge and growing debt.

If we don’t do something about our spending problem now, the scenes we’ve seen playing out all across Europe could happen in America.

If we don’t change the way Washington operates, we will not get control of our government, or our future.

In short, we hoped that the need to increase the debt ceiling could be an opportunity to make some very hard decisions to reduce government spending.

Unfortunately, after weeks of negotiations, it became clear that Democrats in Washington did not view this crisis as an opportunity to rein in spending. Instead, they saw it as an opportunity to impose huge tax increases on American families and small businesses.

President Obama is simply too committed to the European-style of big government that his policies have set in motion. To Democrats in Washington, the answer isn’t to cut spending, but to raise taxes and keep on spending.

Democrats claim they would only target the privileged few. But behind the scenes they argue for much broader tax increases.

The simple fact is, in order to afford the kind of government this president wants, taxes would have to be increased dramatically -- and for middle-income Americans, not just on the wealthy.

Job-killing tax increases are the wrong medicine for our struggling economy. Back in 2009, President Obama admitted that you don’t raise taxes in the middle of a recession. This advice is just as true today.

At the moment, more than 14 million Americans are looking for work and can’t find it. According to economists, a healthy economy is one in which unemployment is around 5%. The unemployment rate today is 9.2%.

And we got more bad news yesterday: Our economy grew at an annual rate of just 1.3% in the second quarter and the first-quarter growth was downgraded to just four tenths of one percent. Raising taxes will only make this worse. And prolonging the debt crisis will only add to the ongoing economic uncertainty.

Republicans believe we must solve our debt crisis -- and we believe we can solve it if Democrats will work with us. No one will get everything they want, and we can’t solve all of our problems at once, but surely we can reach an agreement that will increase the debt ceiling, impose accountability, and begin reducing the size of our federal government.

That may not be what some in Washington really want. But it’s what Americans, and the American economy, really need. ####

President Obama’s weekly remarks, as provided by the White House
Today, I’d like to speak with you about the ongoing and urgent efforts to avoid a first-ever default and get our fiscal house in order.

Republicans in the House of Representatives just spent precious days trying to pass a plan that a majority of Republicans and Democrats in the Senate had already said they wouldn’t vote for. It’s a plan that wouldn’t solve our fiscal problems, but would force us to relive this crisis in just a few short months. It would hold our economy captive to Washington politics once again. If anything, the past few weeks have demonstrated that’s unacceptable.

Any solution to avoid default must be bipartisan. It must have the support of both parties that were sent here to represent the American people -- not just one faction of one party. There are multiple ways to resolve this problem. Congress must find common ground on a plan that can get support from both parties in the House. And it’s got to be a plan that I can sign by Tuesday.

Look, the parties are not that far apart here. We’re in rough agreement on how much spending we need to cut to reduce our deficit. We agree on a process to tackle tax reform and entitlement reform. There are plenty of ways out of this mess. But there is very little time.

We need to reach a compromise by Tuesday so that our country will have the ability to pay its bills on time -- bills like Social Security checks, veterans benefits and contracts we’ve signed with thousands of American businesses. If we don’t, for the first time ever, we could lose our country’s Triple A credit rating. Not because we didn’t have the capacity to pay our bills -- we do –- but because we didn’t have a Triple A political system to match it. And make no mistake -- for those who reflexively oppose tax increases on anyone, a lower credit rating would be a tax increase on everyone -- we’d pay higher interest rates on mortgages, car loans and credit cards.

That would be inexcusable, and entirely self-inflicted by Washington. The power to solve this is in our hands. All that’s needed is a simple vote that Democrats and Republicans have taken for decades, including all of the leaders in Congress today. It was done 18 times under President Reagan. Seven times under George W. Bush. And it must be done again now. It’s not a vote that allows Congress to spend more money. Raising the debt ceiling simply gives our country the ability to pay the bills Congress has already racked up. It gives the United States of America the ability to keep its word. And it will let businesses and our economy breathe a sigh of relief.

On Monday night, I asked you to make your voice heard in this debate. And the response was overwhelming. One of the emails we received was from a woman named Kelly Smith, who wanted to send this message to Washington:

“I keep my home clean, work hard at a full-time job, give my parents any monies I can so they can afford their medications, I pay my bills and by all appearances I am a responsible person. All I’m asking is that you be responsible. I have my house in order and all I’m asking is that you get yours the same way.”

Here in Washington, we need to get our house in order. And I have to say, Democrats in Congress and some Senate Republicans have been listening and have shown themselves willing to make compromises to solve this crisis. Now all of us -- including Republicans in the House of Representatives -- need to demonstrate the same kind of responsibility that the American people show every day. The time for putting party first is over. The time for compromise on behalf of the American people is now. Thank you. ####

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