Changes must be made in federal spending and programming or the country is headed for a financial âtrain wreck.â, a Republican U.S. senator says, and an attempt by President Barack Obama to seek a hike in the countryâs debt ceiling is likely to fail.
U.S. Sen. Rob Portman, who is in his first term of office, said he intends to stay in the nationâs capital through at least today if not longer to continue to work on a resolution to cut the federal budget before supporting raising the debt ceiling to $14.3 trillion. Obama met with the eight top Republican and Democratic leaders Thursday for 90 minutes discussing areas to cut and to close tax loopholes in order to reach an agreement before the Aug. 2 deadline.
The president is pushing for cuts of $4 trillion, but even some Republicans said a $2 trillion proposal is more attainable.
Obama even entertained ideas regarding reforming Social Security, Medicare and Medicaid, but Republicans balk at closing loopholes or increasing taxes.
Portman said he was encouraged by statements made by Obama regarding Social Security, Medicare and Medicaid that these programs are not sustainable under the existing format and funding.
âI donât think anybody in Washington would disagree that we have to make changes to these programs for them to survive,â Portman said Thursday in a media teleconference. âThe reforms can be started slowly, they can affect nobody who is currently retired or near retirement. They can be sensible in relation to what the true value of what inflation is and we can institute ideas that are bipartisan â or we can have a train wreck.â
Portman also found some common ground with the president on closing tax loopholes, although he favors tax reform more. The senator said he is strongly opposed to raising taxes to close the budget gap.
âI am not only willing to do that (close loopholes), I have been promoting tax reform for that reason,â Portman said. âTax reform will generate more economic activity, create more revenue â not by raising taxes but by getting rid of what some people call âtax expendituresâ of the code and by lowering the rates because you are getting rid of the underbrush of the tax code.â
He said leading economists say the U.S. tax code âis not working well and is not efficient because too many individuals and too many businesses are making decisions based on tax motivations rather than what makes sense for the economy and job creation.â
He would like to simplify the tax code so it encourages growth and job creation.
The senator from Ohio noted Obamaâs own commission on the deficit reported tax reform was needed to deal with the deficit.
Since tax reform is impossible by the August deadline, Portman would like to see a promise made by Congress to reform the tax code as part of the current budget negotiations since it is necessary in spurring the economy and federal revenues.
âI donât believe we can get out of the deep fiscal hole that we are in without growing the economy, restrain spending and dealing with the entitlement programs,â Portman said. âI think it (tax reform) should be part of the discussion and a specific tax reform commitment be made as part of the negotiations including setting a specific time period for Congress to issue a report with some strong incentives to do so.â
Obama called for a rare Sunday meeting to continue talks on the budget and deficit reduction.