Reed frustrated with Obama on tax deal

WASHINGTON, D.C. (WPRI) - U.S. Sen. Jack Reed is still frustrated that President Obama didn't push harder to include in this week's fiscal cliff deal the entire tax increase Obama backed on the campaign trail, and he's already ringing alarm bells another potential fiscal crisis later this winter.

"I think we could have pushed harder," Reed told WPRI.com Wednesday during a half-hour interview in his office on Capitol Hill.

Reed was one of 89 senators who voted in favor of the cliff compromise, which passed just after 2 a.m. on New Year's Day and cleared the House on Tuesday night. The bill raises income taxes on families making at least $450,000, a higher threshold than the $250,000 that Obama and other Democrats had been advocating.

• Related: RI Dems back Obama on cliff deal

"We had set out a benchmark in order to provide appropriate revenues," Reed said. "If we don't have the revenues, we put more pressure on every other program we've got, from highway spending to defense spending to Medicaid funding for the states, which is critical because if we don't provide them the support, they still have to help people."

Reed said he and other Senate Democrats expressed their concerns about the higher $450,000 level "quite explicitly" to President Obama and Vice President Biden as they hammered out an agreement with Senate Republican leader Mitch McConnell, but the bill passed so quickly that senators weren't given a chance to debate and amend it.

"We have to recognize the more that number goes up, the more pressure we're putting on lots of critical programs," Reed said. He also expressed disappointment that the cliff compromise included no new funding for infrastructure projects that would create jobs.

Looking ahead Reed said he's worried about another looming standoff: the debt ceiling, a statutory limit on how much money the U.S. Treasury can borrow to pay the government's bills. The country hit the ceiling on Dec. 31, and the Obama administration says it will run out of room to maneuver by March.

"These debts are not the debts of one administration," Reed said. "We went from a surplus when President George W. Bush arrived to a deficit when he left, so the notion that this issue of debt limits is something tied to President Obama is preposterous. This is just living up to the obligations we've undertaken."

Reed said the previous crisis over the debt ceiling in August 2011 was a major blow to the nation's economy. "I'm very concerned," he said. "You've got to realize that you're putting at risk the economy of the United States and the world. Until August of 2011 this was unprecedented."

Reed, who served three terms in the U.S. House before he was elected in 1996 to succeed the late U.S. Sen. Claiborne Pell, said the deep polarization of the Republican-controlled U.S. House is a major contributor to the gridlock in Congress.

"There is a highly polarized atmosphere here in Washington," he said. "Structurally what's happened - principally with the redistricting process - is you've got congressional districts that are so either very Republican or very Democratic that there's not this swing, or sensitivity, to the middle ground."

"I think if anything, by the nature of having to run statewide, there might be a bit more of a sense of my colleagues in the Senate - although we have some similar folks, on both sides, who have strong ideological impulses - but we have this notion where you really do consider what's the independent person thinking now," he said.

Reed dismissed the idea that his own understated approach to the job isn't suited to an era of strong partisanship. "You have to continue to work at principled solutions," he said. "If you want to make speeches, make speeches. But at the end of the day you have to have solutions, and it requires principled compromise."

Reed, who is 62, said he will definitely run for re-election to another six-year in 2014 and once again reiterated that he has no interest in being appointed secretary of defense.

Reed is, however, in line for another key military post: the chairmanship of the powerful Senate Armed Services Committee, which is currently led by Michigan Democrat Carl Levin, who hasn't said yet whether he'll retire or run for another term in 2014. The two work closely together; Reed excused himself during the interview to take a phone call from Levin.

Ted Nesi ( tnesi@wpri.com ) covers politics and the economy for WPRI.com and writes the Nesi's Notes blog . Follow him on Twitter: @tednesi