8 Questions for 8 PM

Mar 24, 2009

Key Questions For President Obama At His Recent News Conference

Prior to President Barack Obama's prime-time news conference, in which he discussed the state of the economy, his recovery plan, and his ambitious budget blueprint, the Peter G. Peterson Foundation suggested 8 key questions.

The budget you submitted contains very large deficits, extending for years beyond when economists predict the recession will end. Many of these same economists call this "unsustainable." Even more are saying so based on CBO's projections, including your own budget director. What is your response, and do you expect to propose additional deficit-reduction efforts in the future?

Although you have articulated some plans for controlling health care costs, little has been said about what the government intends to do to reform entitlement programs like Social Security and Medicare. Last Friday, the Administration released a summary of your recent Fiscal Responsibility Summit, which included discussions of entitlements and long-term sustainability. What steps has the Administration taken since the Summit to address these longer-term issues?

To date, you have not called for tax increases for the middle class. But with rising deficit and debt levels along with your proposed spending increases, should a greater number of Americans be prepared to face tax increases and/or reductions in benefits they receive?

Right now, Treasury bonds are viewed as reasonably safe investments relative to other options. And foreign investors are continuing to lend. Do you believe investor confidence will remain strong given the country’s rising debt levels? Has your Administration made any efforts, particularly with foreign lenders, to ease concerns regarding our future outlook?

According to the latest CBO estimates, your proposed changes in tax policy would reduce revenues by $2.1 trillion over a 10- year period, with the extension of most of the Bush tax cuts being the biggest cause of revenue loss. How does the Administration plan to deal with this issue?

Currently, about 8 percent of government spending goes toward paying off interest on our debt. Your proposed budget projects a significant increase in future interest payments over time due to increased debt levels. How will you compensate for this loss in revenue given your expanded spending proposals?

You've said that your Administration intends to follow pay-as-you-go rules for new spending proposals. Given the worsening budget and economic outlook, have you considered putting spending constraints on existing programs, as well?

The Treasury Department recently announced the Legacy Loans Program in an attempt to purge toxic assets. Given that this program is believed to be the riskiest component of the government's financial rescue plan, can you provide details on how the government will ensure that taxpayers are protected?

Since its launch in July 2008, the Peter G. Peterson Foundation has invested nearly $11 million in grants to raise awareness of, and seek solutions to the fiscal challenges posed by the rising costs of health care and retirement and a near-zero household savings rate. To address these challenges successfully, the nonpartisan Foundation works to bring Americans together to find sensible, long-term solutions that transcend age, party lines and ideological divides. The Foundation also distributes the critically acclaimed feature documentary I.O.U.S.A., which tells the story of the rapidly growing national debt and its consequences for the U.S. economy. For more information, see www.PGPF.org [1].

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