Personally, I'd like you to read the whole thing:
You talked a lot about how foreign policy ultimately has to derive from American strength, and so when I talk to businessmen, a lot of them are dismayed that you have not signaled to the world and to markets that the U.S. will get its fiscal house in order by embracing your deficit commission, the Simpson-Bowles. And that walking away from that,which is a phrase I’ve heard a lot, has been a very bad signal to the world. Why won’t you embrace Simpson-Bowles?
I’ve got to say, most of the people who say that, if you asked them what’s in Simpson-Bowles, they couldn’t tell you. So first of all, I did embrace Simpson-Bowles. I’m the one who created the commission. If I hadn’t pushed it, it wouldn’t have happened, because congressional sponsors, including a whole bunch of Republicans, walked away from it.
The basic premise of Simpson-Bowles was, we have to take a balanced approach in which we have spending cuts and we have revenues, increased revenues, in order to close our deficits and deal with our debt. And although I did not agree with every particular that was proposed in Simpson-Bowles — which, by the way, if you asked most of the folks who were on Simpson-Bowles, did they agree with every provision in there?, they’d say no as well.
What I did do is to take that framework and present a balanced plan of entitlement changes, discretionary cuts, defense cuts, health care cuts as well as revenues and said, We’re ready to make a deal. And I presented that three times to Congress. So the core of Simpson-Bowles, the idea of a balanced deficit-reduction plan, I have consistently argued for, presented to the American people, presented to Congress.
There wasn’t any magic in Simpson-Bowles. They didn’t have some special sauce or formula that avoided us making these tough choices. They’re the same choices that I’ve said I’m prepared to make. And the only reason it hasn’t happened is the Republicans were unwilling to do anything on revenue. Zero. Zip. Nada.
The revenues that we were seeking were far less than what was in Simpson-Bowles. We’ve done more discretionary cuts than was called for in Simpson-Bowles. The things that supposedly would be harder for my side to embrace we’ve said we’d be willing to do. The whole half of Simpson-Bowles that was hard ideologically for the Republicans to embrace they’ve said they’re not going to do any of them.
So this notion that the reason that it hasn’t happened is we didn’t embrace Simpson-Bowles is just nonsense. And by the way, if you talk to some of these same business leaders who say, Well, he shouldn’t have walked away from Simpson-Bowles, and you said, Well, are you prepared to kick capital gains and dividends taxation up to ordinary income —
— which is what Simpson-Bowles —
— which is what Simpson-Bowles called for, they would gag. There’s not one of those business leaders who would accept a bet. They’d say, Well, we embrace Simpson-Bowles except for that part that would cause us to pay a lot more.
And in terms of the defense cuts that were called for in Simpson-Bowles, they were far deeper than even what would have been required if the sequester goes through, and so would have not been a responsible pathway for us to reduce our deficit spending. Now, that’s not the fault of Simpson-Bowles. What they were trying to do was provide us a basic framework, and we took that framework, and we have pushed it forward.
And so there should be clarity here. There’s no equivalence between Democratic and Republican positions when it comes to deficit reduction. We’ve shown ourselves to be serious. We’ve made a trillion dollars worth of cuts already. We’ve got another $1.5 trillion worth of cuts on the chopping blocks. But what we’ve also said is, in order for us to seriously reduce the deficit, there’s got to be increased revenue. There’s no way of getting around it. It’s basic math. And if we can get any Republicans to show any serious commitment — not vague commitments, not “We’ll get revenues because of tax reform somewhere in the future, but we don’t know exactly what that looks like and we can’t identify a single tax that we would allow to go up” — but if we can get any of them who are still in office, as opposed to retired, to commit to that, we’ll be able to reduce our deficit.
Now, to your larger point, you’re absolutely right. Our whole foreign policy has to be anchored in economic strength here at home. And if we are not strong, stable, growing, making stuff, training our workforce so that it’s the most skilled in the world, maintaining our lead in innovation, in basic research, in basic science, in the quality of our universities, in the transparency of our financial sector, if we don’t maintain the upward mobility and equality of opportunity that underwrites our political stability and makes us a beacon for the world, then our foreign policy leadership will diminish as well.
Can we do that in a world with so much competition from so many countries? One of the things you do hear people say is, You know, we have all this regulation. You’re trying to make America more competitive, but you’ve got Dodd-Frank, you’ve got health care. There’s all this new regulation. And in that context, are we going to be able to be competitive, to attract investment, to create jobs?
Absolutely. Look, first of all, with respect to regulation, this whole notion that somehow there’s been this huge tidal wave of regulation is not true, and we can provide you the facts. Our regulations have a lower cost than the comparable regulations under the Bush Administration; they have far higher benefits.
We have engaged in a unprecedented regulatory look-back, where we’re weeding out and clearing up a whole bunch of regulations that were outdated and outmoded, and we’re saving businesses billions of dollars and tons of paperwork and man-hours that they’re required to fill out a bunch of forms that aren’t needed. So our regulatory track record actually is very solid.
I just had a conference last week where we had a group of manufacturing companies — some service companies as well — that are engaging in insourcing. They’re bringing work back to the United States and plants back to the United States, because as the wages in China and other countries begin to increase, and U.S. worker productivity has gone way up, the cost differential for labor has significantly closed.
And what these companies say is, as long as the United States is still investing in the best infrastructure in the world, the best education system in the world, is training enough skilled workers and engineers and is creating a stable platform for businesses to succeed and providing us with certainty, there’s no reason why America can’t be the most competitive advanced economy in the world.
But that requires us to continue to up our game and do things better and do things smart. We’ve started that process over the last three years. We’ve still got a lot more work to do, because we’re reversing decade-long trends where our education system didn’t keep pace with the improvements that were taking place in other countries; where other countries started to invest more in research and development, and we didn’t up our game; where our infrastructure began to deteriorate at a time when other countries were investing in their infrastructure; and, frankly, where we have gotten bogged down politically in ways that don’t allow us to take strong, decisive action on issues in ways that we’ve been able to do in the past.
And so my whole goal in the last three years and my goal over the next five years is going to be to continue to chip away at these things that are holding us back. And I’m absolutely confident there’s no problem that America is facing right now that we can’t solve, as long we’re working together. That’s our job.