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Obama: Deficit reduction must keep alive the American dream

By the CNN Wire Staff
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Obama 'hopeful' about deficit reduction
  • President Obama holds his third town hall-style event in three days
  • He says the debate on deficits involves what kind of country America will be
  • Obama's message appears to try out campaign themes for 2012

Reno, Nevada (CNN) -- Over and over Thursday, President Barack Obama told workers at a renewable energy company that he is like them.

He remembers pumping gas when high oil prices ate a hole in his budget, he said. He knows he wouldn't have made it through college without scholarships and loans.

And now as president, he promised that he won't let the current debate on deficit reduction deny others the chance for the American dream he has lived.

"We can't ignore future deficits, but just as ignoring deficits would mortgage our future, failing to invest in our kids and our infrastructure and our basic research and clean energy, that would be mortgaging our future, as well," he said to applause. "And I'm not willing to do it."

It was the third town hall-style meeting in three days for Obama, after an event Tuesday at Northern Virginia Community College and a gathering Wednesday at Facebook headquarters in Palo Alto, California.

His trip also has included a series of fundraising events just over two weeks after he announced he will seek re-election in 2012.

Speaking Thursday at ElectraTherm Inc., a 45-employee company that produces electric power without using fuel or emitting carbon dioxide, Obama advocated federal spending on education, research and infrastructure development such as road and bridge repairs, high-speed rail lines and broadband wireless networks.

He appeared to be trying out campaign themes for the 2012 race, repeatedly framing the debate in Washington as a choice between helping working-class families and society's most vulnerable elements or favoring moneyed interests he labeled as big oil and big banks.

Repeating past calls for ending subsidies for oil companies and restoring higher tax rates for the highest-income Americans, Obama defended what he called his balanced approach to deficit reduction and depicted the Republican stance as favoring the well-to-do.

"I'm rooting for everybody to get rich," he said. "But I believe that we can't ask everybody to sacrifice and then tell the wealthiest among us, well, you can just relax and go count your money, and don't worry about it. We're not going to ask anything of you."

Obama went on to say that he had been "incredibly blessed by this country," noting he was raised by a single mother and needed scholarships to get through school.

"We want to make sure this is a country where, if you're willing to try hard, you can make it, where everybody has a chance at prosperity," he said. "That's my focus. That's my guiding light."

Obama's blitz comes as Congress faces two major fiscal issues in coming months: passing a budget for fiscal year 2012, which begins October 1, and raising the federal debt ceiling so the government can continue meeting its obligations.

While the issues are not necessarily linked, congressional Republicans are demanding significant fiscal reforms, such as a balanced budget amendment and mandatory spending caps, in exchange for their necessary support to raise the debt limit.

Republicans will not move forward on a measure to raise the country's debt ceiling unless "it is accompanied by serious reforms that immediately reduce federal spending and end the culture of debt in Washington," House Majority Leader Eric Cantor, R-Virginia, said this week.

Obama and Democrats want to separate the debt ceiling and fiscal reform issues to avoid spooking markets and trade partners, arguing that such a vital issue should be free of any possible political drag.

While opposing a direct linkage between raising the debt ceiling and fiscal reforms, the White House concedes that simultaneous steps are needed to reduce mounting deficits and the national debt.

The U.S. debt is expected to hit the country's $14.3 trillion ceiling next month, though congressional leaders say the Treasury can take steps to put off the deadline until early July.

On the broader fiscal reform issues, Obama noted Thursday that both his proposal and the House Republican plan acknowledge the problem posed by expanding deficits and the growing national debt, and that both call for $4 trillion in deficit reduction in the next decade or so.

The House plan would overhaul Medicare and Medicaid, cut non-military discretionary spending and reform the tax code to lower rates and eliminate loopholes.

The goal is leaner government without the unsustainable cost increases currently plaguing Medicare and Medicaid, along with lower tax rates to stimulate economic growth.

Obama's vision, unveiled last week, includes ending the tax cuts for the wealthy, further reforms to Medicare and Medicaid, and cutting military spending. The House Republican plan would leave military spending untouched.

Vice President Joe Biden's office announced Monday that his first meeting with legislators to try to work out a fiscal reform deal will take place May 5. Obama proposed the talks when he outlined his policy last week, and Republican leaders announced Tuesday that Cantor and Sen. Jon Kyl of Arizona will represent them.

At the same time, a bipartisan group of senators known as the "Gang of Six" is nearing consensus on its own comprehensive reform plan based on the report issued last December by a deficit reduction commission appointed by Obama.

No details have been made public, but the Bowles-Simpson commission's report in December included reforms of entitlements including Social Security, Medicare and Medicaid while also calling for revenue increases through tax reform and spending cuts, including in the military budget.

CNN's Tom Cohen contributed to this story.