President Barack Obama on Monday will lay out his vision for reducing the nation’s debt and deficit in a plan that will include tax reform and changes to Medicare and Medicaid.
On top of the $1.5 trillion in cuts the super-committee is tasked with finding, the president will give his plan to reduce the deficit by $3 trillion over 10 years. He will speak from the Rose Garden on Monday and lay out a proposal that will save about $1.5 trillion through tax increases, $1 trillion from winding down the wars in Afghanistan and Iraq and nearly another $1 trillion in cuts and reforms to a “broad range of mandatory programs” – including cuts to both the provider and the beneficiary sides of Medicare and Medicaid.
“This will bring the country to a place whereby in the middle of this decade, current spending is no longer adding to our debt,” a senior administration official said. “Debt will be falling as a share of the economy, as a percentage of GDP; and deficits on a year-by-year basis will be at a sustainable level so that we maintain that.”
A White House official also said President Obama will veto any plan the super-committee comes up with that cuts programs, including Medicare and Medicaid, but does not include raising taxes on the wealthiest Americans – setting up a showdown with Republicans, giving the American people a stark contrast between Democrats and Republicans and making not only the economy but also tax reform a key issue for the 2012 Elections.
“What the president is saying is he is not doing [beneficiary reforms] if the Republicans are unwilling to ask the wealthiest Americans and biggest corporations to pay their fair share,” the White House official said. “What they can’t do is send something to us with the things we propose and without the stuff on the revenue side because we will veto that.”
Republicans have already said they would not support various aspects of President Obama’s jobs plan because he wanted to pay for it by raising taxes on millionaires and billionaires – although they have said they were fine with raising taxes on middle class Americans when they said they did not support extending the payroll tax holiday that would put money into the pockets of working-class Americans. President Obama’s deficit-reduction plan already has gotten the same response from Republicans as his jobs plan.
“Class warfare may make for really good politics, but it makes for rotten economics,” House Budget Committee Chairman Paul Ryan (R-Wis.) said on “Fox News Sunday” – Ryan is one of the Republicans who has said he did not support extending the payroll tax holiday but did support lowering taxes for the richest Americans.
Still, it is a fight the president and the White House seem to be ready to have.
“Unfortunately, Congressional Republicans believe the burden of deficit reduction should only come from spending cuts to critical programs, including Medicare and Medicaid, and refuse to ask millionaires and billionaires to pay their fair share to get our fiscal house in order and reduce the deficit,” a quote from talking points the White House released on the plan read.
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