Obama Seeks to Reshape Debate Over Debt

By MICHAEL D. SHEAR

Doug Mills/The New York TimesPresident Obama spoke last Thursday after a meeting in the Oval Office.

President Obama will try to reshape Washington’s debate over the nation’s fiscal crisis on Wednesday with a speech outlining his approach to tackling the debt and the long-term health of entitlement programs, while navigating the tricky politics that will confront him as he seeks re-election.

Mr. Obama has until now largely ceded the task of confronting the nation’s biggest fiscal challenges, first to his own debt commission and more recently to House Republicans, who last week proposed a plan that would remakeMedicare and Medicaid while slashing $6 trillion in spending over the next 10 years.

But White House aides said Tuesday night that in the speech, the president will lay out his own, four-part plan to deal with the growing deficit and the reality that the costs of entitlement programs are growing rapidly.

“The President’s proposal will build off of the deficit reduction measures included in his 2012 budget and will borrow from the recommendations of the bipartisan fiscal commission he created,” said a White House official, who offered guidance on background ahead of Mr. Obama’s speech.

It remains unclear how specific Mr. Obama will be on Wednesday when he gives the afternoon speech from George Washington University. During the year-long battle over health care, the president often gave speeches with broad policy guidelines but few details, content to let Congress work those out.

Politically, the speech carries many risks. Proposing a plan that cuts deeply in social programs to reduce the deficit could disappoint his Democratic supporters. But appearing to duck or dodge the fiscal challenges could turn off independent voters he needs to win in 2012.

Administration officials declined to be very specific but said Tuesday night that the four-part plan would include “keeping domestic spending low, finding additional savings in our defense budget, reducing excess health care spending while strengthening Medicare and Medicaid and tax reform that reduces spending in our tax code.”

Even before the speech, Republicans in Washington were already setting the stage for what political observers expect will be an even more spectacular clash of philosophies than the one that nearly caused a budget shutdown last week.

In a blunt warning to Mr. Obama, the House speaker, John A. Boehner, said Tuesday that Republican proposals “have set the bar” for deep cuts to spending. And he said that any attempt to raise taxes would be considered by the Republican majority in the House to be “unacceptable” and “a nonstarter.”

White House officials said the overriding philosophy behind the president’s proposals on Wednesday would be an effort to seek balance between the need for deficit reduction and the need to protect seniors, the middle class and workers.

Here are six things to look for as the president makes his remarks:

1. The number. One of the big questions is whether Mr. Obama will set a specific target for long-term debt reduction, and if so, how close he will get to the Republican target of reducing overall debt by close to $6 trillion over 10 years.

The target, if he offers one, will be picked apart by all sides as they attribute motives to the content of the president’s speech. A target that is too low will be fodder for Republican claims that Mr. Obama is not serious about confronting the nation’s fiscal challenges.

That was clear in a pre-speech statement Mr. Boehner put out on Tuesday. “The President needs to demonstrate leadership and show American families and small businesses that he is serious about addressing Washington’s spending problem,” Mr. Boehner wrote.

At the same time, if the overall number is too high, the president’s most ardent supporters on the left will scream that he has given away the store before negotiations have even begun.

2. Taxes. Mr. Obama’s top advisers have been signaling for days that the president intends to talk about the need for everyone in America to share in the burden of paying down the debt. That is not-so-subtle code for letting the tax cuts for the wealthy expire — a key promise from the 2008 campaign trail.

But that has already been declared off the table by Republicans, and the idea of raising any taxes makes some Congressional Democrats queasy going into next year’s elections. The last thing that many Democrats facing tough election battles want is to have to defend a tax increase.

3. Medicare. Mr. Obama’s party has already been burned politically on this issue. Mr. Obama’s health care overhaul last year eliminated the Medicare Advantage program, which the administration said was wasteful and inefficient. Republicans turned that into campaign ads accusing Democrats of plotting a $500 billion cut in programs for seniors.

But the president is already on record saying that something must be done to confront the rising costs of the entitlement programs like Medicare andMedicaid. Look for him to draw a sharp contrast between the way his administration will try to do this and the Republican approach presented by Representative Paul D. Ryan.

In comments to reporters on Tuesday, Jay Carney, the White House press secretary, called the Republican proposals on Medicare “rather drastic reform” and said they were part of an imbalance in their ideas that place “all the burden on the middle class, on seniors, on the disabled, on people in nursing homes.”

4. Olive branch to Republicans. Mr. Carney and other top White House aides have been closed-mouthed about the specifics of Mr. Obama’s speech. Among the things not known is whether the president will include an olive branch to Republicans as an indication that he is willing to meet them halfway.

Outreach of that kind could involve a specific proposal that Republicans have already embraced, or just rhetoric that matches up with the general direction that Republicans have already mapped out. Senator Mitch McConnell of Kentucky said on Tuesday that Mr. Obama should be specific.

“We all look forward to hearing what the president has to say,” Mr. McConnell said. “But it’s my hope that in doing so, he offers more than the outline his political adviser suggested.”

5. Olive branch to his Democratic base. An even bigger question is whether Mr. Obama finds a way to offer something positive for his most liberal supporters, many of whom say they have been bitterly disappointed by what they claim is the president’s willingness to let Republicans frame the economic debate.

The Progressive Change Campaign Committee on Tuesday launched a petition drive that it said quickly gathered 40,000 signatures of disillusioned liberals who do not want Mr. Obama to accept cuts to Medicare and Medicaid.

“President Obama: If you cut Medicare and Medicaid benefits for me, my parents, my grandparents, or families like mine, don’t ask for a penny of my money or an hour of my time in 2012,” the petition’s pledge reads. “I’m going to focus on electing bold progressive candidates — not Democrats who help Republicans make harmful cuts.”

6. The debt ceiling. Even as Washington fights over the 2012 budget, the question of whether to raise the nation’s debt ceiling looms as the bigger, more consequential clash. Senior Republicans are on record saying that refusing to increase the nation’s borrowing capacity would risk global calamity. But Tea Party activists are taking a hard line, saying they will refuse to support raising the debt ceiling unless they get enormous spending cuts to reduce the deficit.

It’s possible that Mr. Obama could try to decouple those arguments during his speech. In the minds of the White House advisers, the vote on an increase in the debt ceiling is a separate, independent action that should be taken on its merits — and on the global impact that failing to raise the limit could have.

Asked about how the president’s speech was related to the debt ceiling vote, Mr. Carney said, “We don’t believe there is a relationship between the two.”

Mr. Carney added, “We don’t believe, going back to questions I had yesterday, that there should be a link between efforts to address our long-term deficit problem and debt problem and the imperative of raising the debt ceiling, which the president and all the leaders of Congress have said has to be done.”