Obama’s plan: Cut spending, tax the rich

President Barack Obama outlines his fiscal policy during an address at George Washington University in Washington, Wednesday, April 13, 2011. (AP Photo/Charles Dharapak)

President Barack Obama coupled a call for $4 trillion in long-term deficit reductions with a blistering attack on Republican plans for taxes, Medicare and Medicaid on Wednesday, laying down markers for a roiling debate in Congress and the 2012 presidential campaign to come.

Obama said spending cuts and higher taxes alike must be part of any deficit-reduction plan, including an end to Bush-era tax cuts for the wealthy. He proposed an unspecified “debt failsafe” that would go into effect if Congress failed to make sure the national debt would be falling by 2014 relative to the size of the overall economy.

“We have to live within our means, reduce our deficit and get back on a path that will allow us to pay down our debt,” the president said in a speech at George Washington University a few blocks from the White House. “And we have to do it in a way that protects the recovery, and protects the investments we need to grow, create jobs and win the future.”

Obama’s speech was salted with calls for bipartisanship, but it also bristled with attacks on Republicans. They want to “end Medicare as we know it,” he said, and to extend tax cuts for the wealthy while demanding that seniors pay more for health care.

“That’s not right, and it’s not going to happen as long as I am president,” he vowed. Medicare serves 47 million seniors and disabled people.

Obama spoke to an audience that included Rep. Paul Ryan, R-Wis., author of the House Republican budget that drew repeated presidential scorn. The Budget Committee chairman later told reporters he had been excited to receive an invitation to the speech, believing the administration was extending an olive branch.

“Instead, what we got was a speech that was excessively partisan, dramatically inaccurate and hopelessly inadequate to addressing our country’s pressing fiscal challenges,” Ryan said. “What we heard today was not fiscal leadership from our commander in chief. What we heard today was a political broadside from our campaigner in chief.”

Speaker John Boehner, R-Ohio, noted that the administration has asked Congress to raise the debt limit, but said, “the American people will not stand for that unless it is accompanied by serious action to reduce our deficit. More promises, hollow targets and Washington commissions simply won’t get the job done.”

The president spoke less than a week after he reached a compromise with Boehner on an unprecedented package of $38 billion in spending cuts for this year just in time to avoid a partial government shutdown. Both houses of Congress are expected to pass the measure in the next 24 hours or so, closing the books on the current budget year and clearing the way for a far more defining debate about the size and shape of the government.

Obama stepped to the podium at a juncture when tea party-backed Republicans are relishing early victories in the House, the 2012 Republican presidential field is just beginning to take shape and moderate Democratic lawmakers are charting their re-election campaigns in swing seats. His emphasis on deficit reduction marked an appeal to independents as well as other voters who are eager to stem record annual deficits as well as gain control over a national debt that is more than $14 trillion.

At the same time, he sought to keep faith with liberals and other supporters.

To opponents of revisions in Medicare, Medicaid or Social Security, he said, “I guarantee that if we don’t make any changes at all, we won’t be able to keep our commitments to a retiring generation that will live longer and face higher health care costs than those who came before.”

Of $4 trillion in cuts, Obama said $2 trillion should come from spending, $1 trillion from overhauling the tax system to eliminate some tax breaks and loopholes, and the rest recouped from lower interest payments on the national debt

Obama also wants to allow Bush-era tax cuts to expire for individuals making $200,000 or more a year and couples making $250,000 or more. The revenue that would generate is not counted in his $4 trillion in deficit reduction.

Administration officials said military spending would be reduced by $400 billion through 2023, domestic programs would absorb $770 billion in cuts and mandatory programs such as agricultural subsidies another $360 billion.

An additional $480 billion would be saved from Medicare, which provides health care principally to 33 million seniors, and from Medicaid, a state-federal program that covers lower-income families and is ticketed for a huge expansion under the health care program Obama signed into law last year.

In line with the wishes of Senate Democratic leaders, the president made no recommendations for savings from Social Security, which he said is neither in a crisis nor “a driver of our near-term deficit problems.” He said he supports unspecified steps to strengthen it for the long term, but ruled out any attempt to privatize it.

The president also urged Congress to pass tax changes, and he suggested he was open to curtailing a homeowners’ tax deduction that can currently be claimed by filers at all income levels.

Obama’s plan relied on some of the same deficit reduction measures proposed in December by a bipartisan fiscal commission he appointed. The president is scheduled to meet Thursday at the White House with the co-chairmen of the commission, Democrat Erskine Bowles and Republican Alan Simpson.

Neither Obama nor his aides distributed any detailed accounting of the effect of his recommendations on the deficit, which is expected to top $1.5 trillion this year, or the debt, now more than $14 trillion.

Obama saved some of his sharpest rhetoric for Republican proposals to end traditional Medicare for anyone currently under 55, and to give the states near-total control over Medicaid.

For Medicare, he said, “It says instead of guaranteed health care, you will get a voucher. And if that voucher isn’t worth enough to buy insurance, tough luck — you’re on your own.”

He said the Republican budget could cost 50 million Americans health care coverage in all, including grandparents needing nursing home care, children with autism and kids “with disabilities so severe that they require 24-hour care. These are the Americans we’d be telling to fend for themselves.”

The debt has grown for much of the past few decades, with the exception of a brief period after President Bill Clinton and Republicans in Congress reached a compromise that permitted payments to reduce it.

Even a recounting of the debt’s history had a political subtext.

Beginning in 2000, the president said, “we increased spending dramatically for two wars and an expensive prescription drug programs, but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts.” That was a reference to policies pursued by President George W. Bush and the Republicans who controlled Congress for six of his eight years in office.

Obama made a glancing reference to the 2012 presidential race, saying that some of his potential Republican rivals had signed onto the budget House republicans are advancing.

Former Massachusetts Gov. Mitt Romney, one likely GOP candidate, issued a statement that said Obama had “dug deep into his liberal playbook for solutions highlighted by higher taxes.”

Another, former Minnesota Gov. Tim Pawlenty, said that with his speech, the president showed a “lack of seriousness on deficit reduction.”

Copyright © 2011 The Associated Press

9 Responses to "Obama’s plan: Cut spending, tax the rich"

  1. Michael Griffith aka Griff  April 14, 2011 at 8:19 am

    Jobs jobs jobs. Not burger-flipping jobs. Real jobs. Capital-producing, income-generating, restore-the-middle-class jobs.

    • woody188  April 14, 2011 at 10:11 am

      Now how do you expect the government to keep people on the plantation and in line if they have jobs that allow people to provide for themselves?

      • Michael Griffith aka Griff  April 14, 2011 at 4:59 pm

        Just dumb, I guess. Ha.

  2. Sandune  April 14, 2011 at 11:01 am

    What can the government do to make capital-producing jobs? The only jobs the White House can increase are government jobs. Taxing those who have the money to make jobs, will add nothing but more taxes.

    Are there no economists in D.C. or even here at CHB who can look beyond the elections to promote more American jobs? We used to lead the world in product production until the One World Order Neoconservatives wrote up the new trade agreements.

    Years ago, many of us made note of all the products we buy that were made overseas. I worked for a company “SMC” that imported all their inventory from Asia because the stuff was cheaper.

    One of my favorite women’s apparel company is now getting their stuff made up in the Dominican Republic and her customers are complaining. She now sells “made in America.” One of my favorite designers “Bob Mackie” has all his products made in China.

    As a Capitalist I want to deal with other American manufacturing and designer companies.

    So if we do find an American entrepreneur who will invest the millions in production and employee costs, would it not make the liberals drool to get to him before he can make a profit.

    Last night on Hardball, Chris Matthews played some of the dialog from “The Fountainhead” where the lead building designer stood firmly on his obligations to build his own dreams only to have the government involved in their final products. He chose to burn it down.

    Were we not raised to make our dreams a reality through our designs and work loads? Some of us tried and failed and some of us gave up working against the tide of socialism. The American dream is no longer a choice.

    Our schools no longer train the next generation to work for their wages. I see a great change in our manufacturing plants and a bigger change in our human approach to work. We seem to expect top wages for our learning time with an attitude that we are superior to any level of workers imported from other countries.

    The missing link in our economy improvements is “imagination.” Just like we see in our government, the employees are interested only in their own involvement and income. Our government is terrified of losing the next election and will never come up with a new improved method of doing their own jobs. The cycle running the show at this time is prohibiting abortions. The RNC says that this is the only litmus test for their campaigns.

    I realize that many American men have no interest in supporting their own offspring. They have the choice to set up accounts for their unwanted babies or they can simply force abortions on their women. This is an honest choice until they run on a pro-life agenda. We can trace now with the DNA science but what will that prove? When it comes to lust, men are driven by the oldest desire in the world.

    It is the same mess when it comes to redistributing the wealth within our federal government. I am in the minority when it comes to considering taking from one against his will and giving to another is a moral crime.

    I am in favor of Social Security and Medicare as it was set up at a time in our history where the jobs closed up and millions of Americans had no safety net. With the tax structure that government has used for decades, there is little anyone can do to build the equity needed for more manufacturing plants.

    What has changed in the American workers is a lack of imagination to keep the jobs growing. I remember how many garages in my various neighborhoods were places where new products were being developed and improved. The very nature of American men and women was to make new ways of keeping the income up enough to cover the costs of living as a family.

    How far do we Americans have to sink before we get back in the mode of development? When can we find our candidates who will keep their pants zipped as they develop a place in the government? How many candidates will work for their constituents well being even when their own wives are lobbyists? We can spend the rest of our lives trying to stay one step ahead of the crap we elect in our Congress.

    Perot made a point of not allowing any candidate to run for any government position if they had been, or married to a lobbyist. He also wanted every candidate to sign a promise not to be a lobbyists for a determined time after they left the government.

    I learned much from the many candidates who had a better agenda for our problems. Starting with Ike, we should have learned how not to become a war machine. We saw the corruption under the new religious right led by President Bush 43 and 41. The greatest lesson of the lot has been electing President Obama as many of us had no idea how the American public would react to a man of mixed blood.

    Developing a better America must start with the voters. They have been clear and they want a white Christian straight man in our government. The general voting numbers will never change in their human culture. We have hit a brick wall. Do we have to wait for some miracle man/woman/leader to get us out of this mess we have become?

    I realize that American voters want a religious leader. They feel more secure knowing their leader fears the end of days just like so many Americans. The voting block knows that corruption, lying, cheating and even breaking the 10 commandments is okay if done in the name of God. The cross is now used as a weapon in our candidates as it simplifies the moral values of uneducated masses.

    The only choice we have is how soon we must learn to live under the leadership of total socialism. It has been a gradual decay and many of us have been aware of what is in store for all of us.

    I come from a long line of merchants. My grandfather owned a line of furniture stores and he never stopped searching for new and improved products. He did very well but his sons stopped searching for new designs and ways of selling. Grandpop had the imagination to grow and learn what his customers wanted. I used some of his imagination when I opened my book store and realized that to get people off their tv seats and into my store, would require a Hollywood approach. I brought in my piano, brought in original art work and had Sunday Salon musical stuff with the store reflecting the illusion of joy. I was written up as a most unusual salon that served great coffee and homemade cookies. I had a large health section where books could be found to restore mental, physical and self improved methods for all to enjoy. I sold CDs of the great classic composers and some of our symphony musicians would gather around the piano and demonstrate the art of composing.

    I never had a better time but I could not afford the property taxes and the fear of keeping the Santa Rosa creek contained when the rains came and the tide rose. I failed to make a profit.

    America is in a state of great grief. We have lost our incentives to work as teams. We cannot find any candidates who want to live war-free. Until we find leadership where our American schools are top priority over the schools where the oil is found, we will never get out of this depression.

    • Michael Griffith aka Griff  April 14, 2011 at 5:09 pm

      Regulatory burden, government induced off-shoring and out-sourcing, illegal immigration driving down wages, the visa system, minimum wage laws, so-called “free-trade” agreements (which happen to be passed and supported by both parties because they benefit their campaign donors), unfair tax burden (mega-corporations pay little to none, small business carries the load)…to name a few.

      Globalism. Propagandized to bring the third world living standards up to ours, designed to bring ours to theirs.

      “That advice should be taken where example has failed, or precept be regarded where warning is ridiculed, is like a picture of hope resting on despair.” – Thomas Paine

      “Back in the thirties we were told we must collectivize the nation because the people were so poor. Now we are told we must collectivize the nation because the people are so rich.” – William F Buckley

  3. Bryionak  April 14, 2011 at 12:39 pm

    “$4 trillion in long-term deficit reductions”

    Please correct me if I am wrong, but this is basically saying we are going to increase the national debt by $11 trillion over the next 12 years instead of $15 trillion.

    Bold. Sounds like our financial problems are solved.

    • Michael Griffith aka Griff  April 14, 2011 at 5:20 pm

      The Wall Street Journal would agree with you on that.

      Obama’s Toxic Speech.

  4. bogofree  April 14, 2011 at 3:00 pm

    Taxes? I thought it was called “revenue enhancement.”

  5. Danny Adams  April 14, 2011 at 6:12 pm

    >>Taxes? I thought it was called “revenue enhancement.”<<

    That's what Reagan called his new taxes (and despite the stories he did raise taxes a number of times, mostly on the middle class), so that probably taints it beyond hope of Obama using the term.

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