White House: Yes to Entitlement Reform, But Only With Revenues

Economic adviser Gene Sperling says entitlement reform is necessary, but so are new revenues.

Gene Sperling, Director of the National Economic Council, speaks about the new report on American innovation in the James Brady Press Briefing Room at the White House in Washington, Friday, Feb. 4, 2011.

Gene Sperling, director of the National Economic Council, at the White House in 2011.

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In the last 48 hours, both congressional Republicans and Democrats both submitted their budget plans for public scrutiny. Today, a White House economic adviser added his view into the mix, and while he called for compromise, he made it clear that the fiscal battle lines are drawn.

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Speaking at an economics conference on Wednesday, National Economic Council Director Gene Sperling said that, even absent Republican pressure, entitlement reform would be a major priority for the White House. However, Sperling said that the White House would not accept a fiscal package that includes entitlement reform but not new revenues.

"It is a misdiagnosis of the problem to say this is only about long-term entitlements," he said to a packed ballroom at the Atlantic Economic Summit in Washington, D.C. Sperling framed the question of getting new tax revenues as a question of national unity. "If there's one thing that's very important, it's to go to the public and say, 'We're all in this together."

The Republican budget plan, presented by House Budget Committee Chairman Paul Ryan on Tuesday, includes fundamental shifts to Medicare. However, it does not count any new revenue sources. The Democratic plan, meanwhile, cuts health spending but does not have the dramatic Medicare overhauls of the Ryan budget. In addition, it includes almost $1 trillion in new tax revenues.

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While Sperling advocated entitlement reform, he said it should be done "in a sensible way," over a long period of time, so as to not derail a still-fragile economic recovery.

Sperling also addressed a fight that recently passed, over the automatic spending cuts that went into effect this month. Though Republicans tend to be the party of spending cuts, Sperling stressed his view that sequestration cuts are a loss for everyone involved.

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"Don't think this is a 'win' for them," he said, pointing out that GOP priorities like defense spending and border security took hits as a result of sequestration. "It's not a wise thing, and it's not a victory for anybody's priorities."

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