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Deficit talk was upstaged by ‘birther’ issue, Bill Daley says

White House Chief Staff Bill Daley says President Obamaddressed 'birther' issue because it was distracting attentiaway from deficit. | AP

White House Chief of Staff Bill Daley says President Obama addressed the 'birther' issue because it was distracting attention away from the deficit. | AP

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Updated: May 30, 2011 12:38AM



WASHINGTON — A factor in President Obama’s decision to address the “birther” question — and release his “long form” birth certificate — came when ABC News anchor George Stephanopoulos asked him about it in an April 14 interview where Obama wanted the story to be on his new debt and deficit reduction plan.

That’s what White House Chief of Staff Bill Daley told me in a phone interview where we discussed economic and fiscal matters — and the looming day in May when U.S. borrowing hits the debt ceiling, unless Congress raises the cap.

Daley flew to Chicago on Air Force One with Obama on Wednesday — the first couple taped an Oprah Winfrey show — and remained in Chicago Thursday to address CEOs at the Economic Club and headline a fund-raiser for Sen. Dick Durbin (D-Ill.). Daley talked to me from an office at the Chicago Club on Wednesday.

Obama sat down with Stephanopoulos after a major speech at Georgetown University where he deplored “tax breaks for the wealthy” while calling for $4 trillion in deficit reduction in 12 years or less.

“He does a major piece on the budget deficit and what’s the lead story on the ABC News when he does an interview — is some silly-ass question about the birth certificate,” Daley said. “And I think [Obama] just got fed up with it all. And it also . . . highlights, as [Obama] said, the kind of lunacy going on in some quarters of the political, media debate that goes on in this country. . . . How can you address serious issues when these sort of . . . irrelevant things get so much play today?”

Daley’s comments come as the White House, the GOP-controlled House and the Democratic-run Senate are grappling with short- and long-term budget, debt and deficit issues.

At the same time, the Obama White House is trying to repair and enhance relations with the business community with Daley, a former Commerce secretary in the Clinton administration and top executive at J.P. Morgan Chase, being deployed to meetings with CEOs.

Daley’s stop at the Economic Club comes after huddling quietly with CEOs in New York a few weeks ago; he has an upcoming CEO gathering in Cleveland. Similar CEO sessions will be hosted in other cities by Senior Adviser Valerie Jarrett, OMB chief Jack Lew, top economic adviser Gene Sperling and Cabinet members.

“It’s a concerted effort,” Daley said.

Turning to the debt ceiling negotiations, Daley told me that as a practical matter, markets will probably start to react before mid-May if the ceiling negotiations drag on. (The Treasury Department is taking actions to wrangle extra time to prevent a U.S. default on borrowings — maybe some 60 days tops.)

“People are going to take steps if they really begin to feel that the political system is not doing something — they will have to make judgments, investor and investment advisers, pension funds — on what to do if some securities that may be affected by a potential default. We don’t think that will happen. We can get this political system to work if Democrats, Republicans come together over a very short period and don’t let this go like the shutdown of the government, to the last minute.

“That would be in some people’s minds almost as bad as having an actual default,” Daley said.

On related matters, Daley said:

† Gas price increases: Opening the strategic oil reserves is “always an option.”

† Housing market slump: “I would say most people would say we are pretty close at the bottom if not at it.” He predicted mortgage rates “should stay low for a while.”



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