Former President Bill Clinton said on Tuesday that the U.S. is already in a recession and urged Congress to extend all the tax cuts set to expire at the end of the year.
The nation’s 42nd president told CNBC’s “Closing Bell” that current economic conditions in the U.S. constituted a "recession" and said plans to cut the deficit threaten to sink the country further into debt.
"What I think we need to do is find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now, and then deal with what's necessary in the long term debt-reduction plans as soon as they can, which presumably would be after the election," Clinton said in a taped interview.
"They will probably have to put everything off until early next year," he added.
"That's probably the best thing to do right now. But the Republicans don't want to do that unless [President Barack Obama] agrees to extend the tax cuts permanently, including for upper-income people — and I don't think the president should do that."
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But the Arkansas Democrat did say that Congress would be best off agreeing, at least for the immediate term, to extend all the tax cuts that are set to expire at the end of the year, including the so-called Bush tax cuts named after Clinton's successor, Republican George W. Bush.
Democrats have attacked the broad-based cuts, saying they were skewed toward upper-income earners.
But Obama countered with the proposed “Buffett Rule,” which would have imposed a surtax on millionaires. The rule was ultimately defeated.
On the nation’s current tax structure in general, Clinton defended it, saying the system wouldn't look so bad if the economy was performing better. He also told CNBC that it was reasonable to expect top earners to pay more taxes.
Clinton, like the president, blamed much of the nation’s economic woes on the foreign-debt crisis and politics. “This European thing that's having a bigger impact than people know," he said, and then added, "The thing that cost jobs here has been the Congress's policies."
Clinton has found himself in a difficult spot lately, as reports have re-emerged about his occasional ambivalence toward President Obama. He recently praised GOP challenger Mitt Romney’s record at Bain Capital, which further underscored their differences.
Obama is "on stronger ground" when he challenges Romney's record as governor of Massachusetts, not as a businessman at Bain, Clinton told CNBC.
"There's a company not doing well, that's failing, and you buy it and have to impose some economies there and cutbacks because you're trying to turn it around so it can thrive in the economy,” he said. “Whether you succeed or fail, that's a good thing to do.”
"If you go in and buy a company and intentionally load it up with debt, loot its assets and the people lose their jobs and retirements . . . that's a bad thing."
"So to make a judgment on that, you have to know a lot of facts about every case," Clinton said. "I just think we'd all be a lot better off if we talk about we have two people running for the president. What would they do?"
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Clinton remains very popular with the American public. As president, he had an average approval rating of 55 percent during his two terms, according to Gallup. Clinton made no election predictions, but said it would be important for Obama to draw clear lines among voters.
"The most important thing in this election is what will President Obama do and what will Gov. Romney do with the economy and how will they deal with people who disagree with them," Clinton said. "Will they be divide and conquer, or would they be, 'let's bring everyone together'?"
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