Obama eyes Medicare changes, tax increases
(AP) - Forcefully rejecting Republican budget cuttingplans, President Barack Obama on Wednesday proposed lowering thenation's future deficits by $4 trillion over a dozen years with apackage that includes reducing spending on politically sensitivehealth care programs and raising taxes on high-earning Americans.
The president recommended trimming the growth of Medicarespending, cuts in defense, an overhaul of the tax system toeliminate many loopholes enjoyed by individuals and corporations,and an end to Bush-era tax cuts for wealthier Americans.
"We have to live within our means, we have to reduce ourdeficit, and we have to get back on a path that will allow us topay down our debt," Obama said in a combative speech at GeorgeWashington University.
As much a policy speech as it was a political address, Obamalaid the blame for the rising debt on the spending increases andtax cuts enacted during the presidency of George W. Bush and therecession that struck in late 2007. "We lost our way," he said.
Ensuring that the nation's fiscal troubles will be at the centerof the 2012 presidential election, Obama drew sharp contrasts witha Republican plan that cuts about $5.8 trillion in spending overthe next decade and which the White House says unfairly singles outmiddle-class taxpayers, older adults and the poor. He pointedlynoted that the GOP plan has already been embraced by someRepublican presidential candidates.
Such cuts, he said, "paint a vision of our future that's deeplypessimistic."
"Their vision," he added, "is less about reducing the deficitthan it is about changing the basic social compact in America."
Obama previewed his proposals to congressional leaders Wednesdaymorning. And even before he delivered his speech, top Republicanswere pushing back.
"If we're going to resolve our differences and do somethingmeaningful, raising taxes will not be part of that," House SpeakerJohn Boehner declared shortly after his White House meeting.
This new clash comes just a week after the president announcedhe would seek re-election. For the past two months, Obama has beenarguing for protection of his core spending priorities, includingeducation and innovation. His turn to deficit reduction reflectsthe pressures he faces in a divided Congress and with a publicincreasingly anxious about the nation's debt, now exceeding $14trillion.
"Any serious plan to tackle our deficit will require us to puteverything on the table, and take on excess spending wherever itexists in the budget," the president said.
To help enforce budget discipline, the president called forresurrecting a spending cap that would be triggered if the nation'sdebt did not stabilize and begin to decline by 2014. The cap wouldnot apply to Social Security, low-income programs or Medicarebenefits.
The president's plan, outlined in a seven-page White House factsheet, draws many of its ideas from the December recommendations ofObama's bipartisan fiscal commission, which proposed $4 trillion indeficit reduction over 10 years. As in the commission's plan, threequarters of the deficit reduction would come from spending cuts,including lower interest payments as the debt eases. One quarter,or $1 trillion, would come from additional tax revenue.