WASHINGTON — Forcefully rejecting Republican budget cutting plans, President Barack Obama on Wednesday proposed lowering the nation’s future deficits by $4 trillion over a dozen years with a package that includes reducing spending on politically sensitive health care programs and raising taxes on high-earning Americans.
The president recommended trimming the growth of Medicare spending, cuts in defense, an overhaul of the tax system to eliminate 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 our deficit, and we have to get back on a path that will allow us to pay down our debt,” Obama said in a combative speech at George Washington University.
As much a policy speech as it was a political address, Obama laid the blame for the rising debt on the spending increases and tax cuts enacted during the presidency of George W. Bush and the recession that struck in late 2007. “We lost our way,” he said.
Ensuring that the nation’s fiscal troubles will be at the center of the 2012 presidential election, Obama drew sharp contrasts with a Republican plan that cuts about $5.8 trillion in spending over the next decade and which the White House says unfairly singles out middle-class taxpayers, older adults and the poor. He pointedly noted that the GOP plan has already been embraced by some Republican presidential candidates.
Such cuts, he said, “paint a vision of our future that’s deeply pessimistic.”
“Their vision,” he added, “is less about reducing the deficit than it is about changing the basic social compact in America.”
Obama previewed his proposals to congressional leaders Wednesday morning. And even before he delivered his speech, top Republicans were pushing back.
“If we’re going to resolve our differences and do something meaningful, raising taxes will not be part of that,” House Speaker John Boehner declared shortly after his White House meeting.
This new clash comes just a week after the president announced he would seek re-election. For the past two months, Obama has been arguing for protection of his core spending priorities, including education and innovation. His turn to deficit reduction reflects the pressures he faces in a divided Congress and with a public increasingly anxious about the nation’s debt, now exceeding $14 trillion.
“Any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget,” the president said.
To help enforce budget discipline, the president called for resurrecting a spending cap that would be triggered if the nation’s debt did not stabilize and begin to decline by 2014. The cap would not apply to Social Security, low-income programs or Medicare benefits.
The president’s plan, outlined in a seven-page White House fact sheet, draws many of its ideas from the December recommendations of Obama’s bipartisan fiscal commission, which proposed $4 trillion in deficit reduction over 10 years. As in the commission’s plan, three quarters 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.