Obama Defends Deficit Plan At Town Hall

President Barack Obama held a town hall meeting Tuesday morning at a community college in Annandale, Va., a swing community in a swing state.

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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

And, first, this hour, the latest from the White House and from the Supreme Court. And we're going to begin with the president.

Mr. Obama is taking his deficit reduction plan on the road this week with a series of town hall meetings. He got started this morning with a trip just outside Washington, D.C. to Annandale, Virginia. President Obama contrasted his plan with the House Republican budget approved last week.

NPR's national political correspondent Mara Liasson was there in Annandale.

MARA LIASSON: In the crucial swing state of Virginia today, the president framed the debate over the deficit by explaining that its origins were not his fault.

President BARACK OBAMA: We had a surplus back in 2000, 11 short years ago. But then we cut taxes for everybody, including millionaires and billionaires, we fought two wars and we created a new and expensive prescription drug program and we didn't pay for any of it. And as the saying goes, there is no such thing as a free lunch.

LIASSON: The president did go on to say the recession made the deficit worse. Then he asked voters to support his plan to cut spending, preserve Medicare and raise taxes on the rich.

Pres. OBAMA: I want you to be able to talk to your members of Congress and say, yes, I'm serious about reducing the deficit. Yes, I want limited government. Yes, I want reductions in spending, but I do think that we've got to make investments in basic research and infrastructure and education and so let's do it in a balanced way.

LIASSON: Before he can get voters to support his solution, the president has to get them to understand the problem. So, today, he sounded a little like a Tea Partier as he tried to explain that if we don't stop spending more than we take in, it will cause serious damage to the economy. The cost of buying a home or a car will go up, he said, because our creditors will stop lending us cheap money.

Pres. OBAMA: If people keep on having to finance America's debt, at a certain point they're going to start charging higher interest rates. We won't be able to afford investments in education or clean energy.

LIASSON: The president got a taste of what a creditor backlash might look like yesterday after the Standard and Poor's rating agency downgraded its view of the country's long-term credit outlook, because it was pessimistic the two parties could overcome their gridlock to solve the fiscal crisis. That sent stocks tumbling.

For a day it looked like the vicious cycle economists worry about could come true - market pessimism about Washington's ability to get the deficit under control hurting the economy and making it even harder to get the deficit under control. The White House has been eager to project optimism in the face of these market worries. And the president had an opportunity to do so today when he was asked by Dr. Rebecca Hayes about the three Democrats and three Republicans in the Senate working together on a deficit plan.

Professor REBECCA HAYES (History, Northern Virginia Community College): My question is, are you encouraged to see more of the bipartisanship like the Gang of Six that has formed recently, addressing some of the very concerns you've mentioned? Do you think we're going to see more of that?

LIASSON: Mr. Obama said he thought the two sides could make a deal, since they've already agreed the deficit needs to be cut by about $4 trillion over 10 years.

Pres. OBAMA: And when folks in Washington agree on anything, that's a good sign. So the debate isn't about whether we reduce our deficit. The debate is about how we reduce our deficit. And my view is we need to live within our means while still investing in our future.

LIASSON: The two sides may be in agreement about what to do, but they're not anywhere close on how to do it. Today in Annandale, the president continued his attacks on the House Republican plan passed last week.

Pres. OBAMA: I think America wants smart government, it wants a lean government, it wasn't a accountable government, but we don't want no government. I mean, according to the Republican budget that was passed, for example, we would have to eliminate transportation funding by a third.

LIASSON: Convincing the markets that Washington can solve its fiscal problems means coming together with the Republicans. Running for re-election means presenting a crystal clear contrast with the Republicans. The president is trying to do both at the same time.

Mara Liasson, NPR News, Annandale, Virginia.

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