Economic growth hinges on investments

>>> meanwhile, president obama is selling the message that helping the middle class is job one. even as the president spoke, it was clear looking at john boehner that the house speaker was not impressed.

>> last night, the president offered up more of the same. higher taxes and more stimulus spending. and just as disappointing, we're weeks away from the president's sequester.

>> joining me now is gene sperling , director of the national economic council and assistant to the president for economic policy for the white house . first of all, what about the republican complaints that the president said every dime is paid for. that he did not specify how he's going to pay for these new programs. your response?

>> well, you know, unfortunately, that's just a political remark. it's not based on any substantive facts at all. you know, what's very clear, we've cut the deficit by $2.5 trillion. it's been bipartisan. $3 in spending cuts for every $1 of revenue. the speaker know, republicans know that the proposal the president had on the table that they walked away from, including over a trillion dollars of spending cuts, including savings. and had only about $580 billion in revenues. so, you know, there was another $1.8 trillion of deficit reduction that was on the table. $2 of that was spending cuts for every dollar of revenue.

>> but gene, that proposal is --

>> so to say that the president is not serious about spending cuts and tough measures is blatantly not accurate.

>> that wasn't the question. the question is, what about the new proposals he made last night? because what they're saying is, regardless of what was proposed and negotiated and never reached agreement before --

>> so, andrea --

>> -- what about the new proposals for pre-k, the new proposals for the minimum wage increase? how do you pay for the things he specified in the state of the union ?

>> so what the president said very clearly yesterday, he is living within the budget control acts on the domestic spending targets we've agreed to, we're living within those. those will cut deficit to well over a trillion dollars and bring us to the lowest level of congressional spending in 50 years. and like the president said, issues that are compelling like pre-k, we can meet the savings and meet the goals and still do it without increasing the deficit a penny. look, i don't think americans believe, as the president said you just cut your way to prosperity. one of the ways you reduce the deficit, you do entitlement reform but you do tax reform that raises the level to lower deficit. is one that you want to bring the deficit down to encourage more private investment. but you also want to make room for things that make our country great. eisenhower investing in the interstate highway program. democrats and republicans increases in mia for bio research. i think it absolutely supports that you can cut lower priority spending to reduce the deficit and that you can use a portion of that to do things that are compelling like pre-k, universal education for 4 year olds. because we're a country that believes everybody should have a fair start. and the minimum wage has no government cost at all. that's just a commitment that we as a people believe if you work full time , you work hard, you should be able to raise your family in dignity. not in poverty.

>> fair point about the minimum wage . that comes out of the private sector , obviously, and some that argue will cost jobs but we can debate that another time. what about the sequester? what is happening right now that will give people any hope at all and consumer confidence because of the gridlock in washington is a real factor? we see that in our polling. what confidence could anyone have that anything could happen to avoid the sequester?

>> well, andrea, i thought one of the powerful points the president made last night is that we've come out of a financial crisis . congress should not be manufacturing crisis every few months. you're absolutely right. that hurts consumer confidence . it also hurts business confidence and the entire to invest. and i think the point that the president made last night and i think powerfully is that there is another way. and the way is what the american people would like. it's bipartisan compromise. it's in the structure of the simpson-bowles bipartisan commission where you combine that with tax reform that reduces the deficit. that's a reasonable bipartisan way that requires the president to say everyone to compromise. that's the right way. and i think what he's made clear the idea that an ideological rigidity about taxes would let some people decide they would rather shut the government down. have harsh spending cuts that hurt defense, national security , education is unfortunate and it's unnecessary. and i do believe that there are reasonable republicans in the congress who understand the deficit reduction does require serious entitlement reform to reduce the deficit. and there are loopholes and tax expenditures for the most well off and most well connected that could also be closed as part of our plan. to bring down the deficit and, yes, still make room for investment and train for our people.

>> we'll leave it there, gene sperling , thank you very much, the day after the state of the union .