Roger Runningen at Bloomberg reports:
President Barack Obama said there is “no doubt” the government needs new revenue from closing tax “loopholes” and limiting deductions, along with enacting spending cuts, to reduce the federal deficit.
There’s “no reason why we can’t have really strong growth in 2013,” the president said in an interview with CBS television yesterday before the network’s Super Bowl broadcast. He cited a recovering housing industry, strong manufacturing and rising car sales.
Revenue could be raised through an overhaul of the tax code, he said, “and we can do it in a gradual way so that it doesn’t have a huge impact.”
“There is no doubt we need additional revenue, coupled with smart spending reductions in order to bring down our deficit,” he said. “I don’t think the issue right now is raising rates.”
Two reports last week suggested worrying signs about the economy. The Commerce Department said Jan. 30 that the gross domestic product, the value of all goods and services produced, dropped at a 0.1 percent annual rate in the fourth quarter, the worst performance since the second quarter of 2009, when the world’s largest economy was still in the recession.
The fourth-quarter drop in GDP was largely due to a decline in government outlays and a smaller gain in inventories that subtracted a combined 2.6 percentage points from growth, Commerce Department data showed Jan. 30.
Two days later the Labor Department reported that the unemployment rate increased to 7.9 percent from 7.8 percent, even as employers added 157,000 jobs in January after a revised 196,000 advance in the prior month.
Obama said there are positive signs in the economy. “The big problem was defense spending was cut 22 percent, the biggest drop in 40 years,” he said. Business hesitated and defense contracts were postponed or cut during the year-end debate over the increased taxes and cuts in spending, known as the “fiscal cliff,” that were part of a budget law enacted in late 2011.
“Washington cannot continually operate under a cloud of crisis,” Obama said on CBS. “That freezes up consumers, it gets businesses worried. We can’t afford these self-inflicted wounds.”
He said the prescription for economic growth is through “a balanced approach” of spending cuts and increases in revenue that he said a majority of Americans agree with.
“We can’t have Washington dysfunction getting in the way,” the president said.
Obama said the government can cut health-care costs, though he added that unspecified “loopholes” and deductions should also be tightened or closed.
“If you combine those things together, then we can not only reduce our deficit but we can continue to invest in things like education and research and development that are going to help us grow — without raising rates again,” Obama said.
On other domestic issues, Obama said:
–“No I don’t” have any hesitation allowing women in military combat, “because women, as a practical matter, are now in combat.”
Women can do “everything a man can, and more,” he said, adding that the government shouldn’t keep women from advancing in the military.