President Barack Obama marked the end of the “long and contentious” debt-limit debate Tuesday afternoon, lamenting that the “manufactured crisis” has stunted the economic recovery and promising a return to a jobs-focused agenda.
The president spoke from the Rose Garden moments after the Senate gave final approval to the deal by a vote of 74-26. The House had voted for it by a surprisingly comfortable 269-161 margin on Monday.
Obama signed the measure more than an hour after the Senate vote, ensuring that the nation is able to continue borrowing money to pay its bills.
The president called the deficit-reduction measures paired with the debt-limit increase an “important first step to ensuring that as a nation we continue living within our means.” But he also said he would continue to fight for a “balanced” approach when Congress continues the debate this fall.
“I’ve said it before, I will say it again: We can’t balance the budget on the backs of the very people who have born the biggest brunt of this recession,” he said.
He also said the lengthy debate over raising the debt ceiling —something that has been done on many previous occasions — could have been avoided altogether if partisan politics were put aside.
“Voters may have chosen divided government but they sure didn’t vote for dysfunctional government,” Obama said.
The months-long debate has sapped all parties in Washington of popular support, including Obama. Last week, his approval rating sank to an all-time low in the Gallup daily tracking poll, at 40 percent.
At the same time, any sense of an economy in recovery mode seems to have gone out the window because of the uncertainty sparked by the debt-limit debate.
“While Washington has been absorbed in this debate about deficits, people across the country are asking what can we do to help the father looking for work,” Obama said. “That’s part of the reason that people are so frustrated with what’s been going on in this town. ... Our economy didn’t need Washington to come along with a manufactured crisis to make things worse.”
Democrats, many unhappy with the terms of the final accord, are eager to move on from the debate and focus on jobs after they return from the August recess. Obama signaled that in his remarks, calling for consideration of various measures, including an extension of middle-class tax cuts, the adoption of trade deals and a new infrastructure bank.
“Both parties share power in Washington. And both parties need to take responsibility for improving this economy,” he said.
A fresh indicator of the nation’s economic health is to come Friday with the release of new monthly jobs data.
Sen. Harry Reid, the Democratic Majority Leader, said Tuesday after the vote that the bill was created through deep compromise and “no one got what they wanted. Everyone had to give something up.”
However, he echoed Obama’s point that the agreement is a starting point toward ensuring that America begins to live within its means.
“Today we made sure America can pay its bills. Now it’s time to make sure all Americans can pay theirs,” Reid said.
The bill raises the U.S. debt ceiling to $14.3 trillion to keep Uncle Sam in good standing with its creditors. However, it came at a cost for lawmakers who had to make tough choices about America’s financial priorities.
In the end, the two sides came up with legislation that will trim more than $2 trillion from the budget over the next decade, while raising the debt ceiling enough to keep the government funded into 2012. But it does not include any new taxes to raise revenues for the government.
For Obama, dealing with the debt ceiling will no longer be an immediate concern during the next presidential election, as the deal will allow the U.S. Treasury to borrow the money it needs to cover American obligations through 2012.
But debate will surely continue on how much America spends and the way it allocates it resources.
Even with an agreement in place on the debt ceiling, there are some economists who believe America’s reputation and credit standing will be downgraded in the near future.
Paul Dales of Capital Economics released a statement Tuesday indicating that the U.S. fiscal position still looks “perilous,” despite the legislation that was passed Tuesday.
If all the spending cuts go forward as prescribed in the pending legislation, Dales said America will have a national debt in 10 years’ time that is very high for its projected GDP.
“This explains why the U.S. is still likely to lose its AAA credit rating very soon,” Dales said in the statement.
“As such, more fiscal consolidation will be needed, which will act as a brake on economic growth for some years to come and result in the Federal Reserve keeping monetary policy loose for longer.”
Allan Lichtman, a U.S. presidential historian at American University, said the acrimonious fighting that accompanied the debt debate was an embarrassment for ordinary Americans.
“It was about as messy as it possibly could be and the American people are utterly disgusted,” Lichtman said.
Material from the Los Angeles Times, the Associated Press and other publications contributed to this report.