Bill Clinton warns against stifling economic growth in debt ceiling deal

Former President Clinton said Wednesday that any agreement to raise the nation’s debt limit should delay the most severe spending cuts until the economy has fully recovered, echoing a concern of the bipartisan deficit commission.

Clinton pointed to Britain as an example of how austerity measures could “dampen economic growth” in such a way that furthers deficit pressures, and called Republicans hypocrites for their hard-line stance on the debt.

“The Republicans who control the House and have a lot of votes in the Senate have now decided -- having quadrupled the debt in the 12 years before I took office and doubled it after I left -- that it’s all the sudden the biggest problem in the world,” Clinton told young progressives in Washington.

Clinton said President Obama is right to resist Republicans who have vowed not to accept any plan that includes new revenues, be they through higher income taxes on the wealthy or closing any number of tax loopholes on businesses. He argued that the GOP philosophy over the last three decades seeking to shrink the government has contributed to a “combustible and unsustainable amount of inequality in America.”

“This is not about whether you’re a fiscal conservative or not, this is about what works. [Republicans’] theory won’t work,” he said.

Clinton’s remarks come a day before Obama is to convene a meeting with congressional leaders at the White House aimed at reaching an agreement before the Aug. 2 deadline that the Treasury Department says is the last day to avoid defaulting on some federal bonds.

Speaking to the same group later in the day, Gene Sperling, director of the National Economic Council under Obama and Clinton, said “shared sacrifice” was essential.

“When we say that we want higher-income Americans to contribute, we’re not playing a class warfare card. We are just asking for the type of honorable compromise, the shared sacrifice that you need in any bipartisan deficit reduction agreement that is going to be accepted by the public as a whole,” Sperling said.

Sperling and Clinton were addressing attendees at a convention of Campus Progress, an offshoot of the Center for American Progress founded by former Clinton chief of staff John Podesta.

Clinton told the activists to engage in the 2012 campaign, and accused Republican governors and state legislators of trying to take away the young voters’ voice.

“There have never been in my lifetime since we got rid of the poll tax and all the other Jim Crow limits on voting the determined effort to limit the franchise that we see today,” Clinton said, naming specifically the actions this year by the heavily Republican state legislature in New Hampshire and new Florida Gov. Rick Scott.

“They are trying to make the 2012 electorate more like the 2010 electorate than the 2008 electorate.... You should be fighting it.”