Obama eyes Medicare changes, tax increases
“It’s an approach that puts every kind of spending on the table, but one that protects the middle-class, our promise to seniors, and our investments in the future,” stated Obama in a speech at George Washington University.
The plan also proposes cuts to domestic spending and the defense budget. “We need to not only eliminate waste and improve efficiency and effectiveness, but conduct a fundamental review of America’s missions, capabilities, and our role in a changing world,” stated Obama.
“It’s an approach that achieves about $2 trillion in spending cuts across the budget. It will lower our interest payments on the debt by $1 trillion,” added the president. “It calls for tax reform to cut about $1 trillion in spending from the tax code.”
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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 would come from additional tax revenue.
Obama’s plan falls short of the more than $5 trillion in cuts over a decade proposed by House Republicans, and dismissed by Democrats as draconian.
Earlier Wednesday, Republican leaders stated they would not support tax increases as part of a deficit-reduction plan. Their comments came shortly after hearing initial details of Obama’s proposal.
Senate Republican Leader Mitch McConnell and House of Representatives Speaker John Boehner stated a deficit-cutting plan will have to be in place in order to raise the debt ceiling and grant the government to continue to borrow money.
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Medicare reformsThe president also recommended trimming the growth of Medicare spending and called for an overhaul of the tax system to eliminate many loopholes enjoyed by individuals and corporations — essentially halting Bush-era tax cuts for wealthier Americans.
“We believe the reforms we have proposed to strengthen Medicare and Medicaid will enable us to keep these commitments to our citizens while saving us $500 billion by 2023, and an additional one trillion dollars in the decade after that,” stated the president.
“We will reduce wasteful subsidies and erroneous payments. We will cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market.”
Before speech, GOP leaders cool on Obama deficit plan
The president’s plan calls for limiting itemized deductions for the wealthiest 2 percent of Americans — a reform Obama states would reduce the deficit by $320 billion over ten years.
“We can’t ignore the fact that they provide millionaires an average tax break of $75,000 while doing nothing for the typical middle-class family that doesn’t itemize,” stated the president.
“Some will argue we shouldn’t even think about raising taxes, even if only on the wealthiest Americans,” stated Obama. “It’s just an article of faith for them. I state that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a tiny more. I do not need another tax cut. Warren Buffett doesn’t need another tax cut.”
Noted the president, “This is not because we begrudge those who’ve done well — we rightly celebrate their success. Rather, it is a basic reflection of our belief that those who have benefitted most from our way of life can afford to give a bit more back.”
First Thoughts: Obama steps into the fray
Timing of the speechThis speech comes as Obama pushes Congress to raise the limit on the national debt, which will permit the government to borrow more and thus meet its financial obligations.
The country will reach its debt limit of $14.3 trillion by May 16. The Treasury Department has warned that failure to raise it by midsummer would drive up the cost of borrowing and destroy the economic recovery.
His speech also precedes an upcoming congressional vote on a $38 billion package of spending cuts that averted a government shut down last week.
Video: GOP leader: Raising taxes not the answer (on this page)
Contrast to RyanThe president’s proposal is in sharp contrast with the plan offered by House Budget Committee Chairman Paul Ryan., R-Wis. That budget proposal, embraced by the House Republican leadership, would reduce spending by more than $5 trillion over 10 years with structural overhauls to Medicare and Medicaid while also making permanent all Bush-era tax cuts.
Alluding to the past bipartisan successes of Ronald Reagan, George H.W. Bush, and Bill Clinton, Obama vowed to work with the other side of the aisle.
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“I’m eager to hear other ideas from all ends of the political spectrum. And though I’m sure the criticism of what I’ve stated here this day will be fierce in some quarters — and my critique of the House Republican approach has been strong — Americans deserve and will demand that we all bridge our differences, and find common ground.”
The Associated Press and Reuters contributed to this report.
source : www.msnbc.msn.com
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Submited at Wednesday, April 13th, 2011 at 7:00 pm on Politics by steve
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