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September 19, 2011 at 10:08 AM
President Barack Obama announced Monday his plan to reduce the deficit by more than $3 trillion over the next decade, including $1.5 trillion in tax increases for the wealthy—$800 billion of which would come from the expiration in 2013 of the Bush-era tax cuts for families earning more than $250,000 per year.
During a Monday morning speech at the Rose Garden, Obama said his Economic Growth and Deficit Reduction plan pays for the jobs bill that he presented to Congress last week under the American Jobs Act. There “shouldn’t be any reason for Congress to drag its feet,” on passing the jobs bill. “I’m ready to sign a bill,” he said. The $3 trillion in deficit cutting on top of the roughly $1 trillion in spending cuts that the president already signed into law in the Budget Control Act amounts to $4 trillion in deficit cuts over the next decade.
Obama’s deficit reduction proposal includes $580 billion in adjustments to health and entitlement programs, including $248 billion to Medicare and $72 billion to Medicaid. The president pledged that he would not allow Medicare to be “turned into a voucher program,” adding that Social Security “faces long-term challenges and we will have to work to strengthen it.”
Obama promised to veto any plan that relies solely on spending cuts to reduce the deficit and fails to include revenue increases through higher taxes on the wealthy. During his speech, Obama pledged to “scour” the budget, reform government spending and make modest adjustments to Medicare and Medicaid. But, he said, to help the nation’s fiscal situation “we cannot rely entirely on cuts. If we are going to make spending cuts, then it’s only right to ask everyone to pay their fair share.”
His plan, Obama said, eliminates tax loopholes for the wealthiest tax payers and corporations, “tax loopholes that middle America doesn’t get.” The nation, he said, “can’t afford these special low rates for the wealthy when we are running these big deficits,” adding that the Bush tax cuts were meant to be temporary. The president also said he would work with Congress to help reform the tax code.
