Transcript for President Obama: Bipartisan Tax Reform
Our work must begin by making some basic decisions about our budget. Decisions -- we'll have a huge impact on the strength of our government. Over the last few years both parties have worked together to reduce the deficit by more than 2.5. Trillion dollars. Mostly through spending cuts but also by raising tax -- on the wealthiest 1% of Americans. As a result we are more than half way towards the goal. A four trillion dollars in deficit reduction that economists say we need to stabilize our finances. Now we need to finish the job. The question is how. In 2011 congress passed a law saying that if both parties couldn't agree on a plan to -- -- -- -- About a trillion dollars worth of budget cuts would automatically going to affect this year. These sudden. Harsh. Arbitrary cut would jeopardize our military readiness. They devastate priorities like education and energy and medical research. They would certainly slower recovery. And cost us hundreds of thousands of jobs. That's why Democrats Republicans business leaders and economists have -- -- -- these cuts. Known here in Washington as the sequester. A really bad idea. Now some in congress have proposed. Permitting only -- -- the defense cuts. By making even bigger cuts to things like education and job training. Medicare. And Social Security benefits. That idea is even worse. Yes the biggest driver of our long term debt is the rising cost of health care for an aging population. And those of us who care deeply about programs like Medicare must embrace the need for modest reforms. Otherwise our retirement programs. Will crowd -- investments we need for our children. And jeopardize the promise of a secure retirement for future generations. We can't -- senior citizens and working families to shoulder the entire burden of deficit reduction. While asking nothing more from the wealthiest in the most powerful. We won't grow the middle class simply by shifting the cost of health care or college on the families that already struggling. Or -- forcing communities to lay out more teachers and more cops and more firefighters. Most Americans. Democrats Republicans and independents. Understand that we can't just cut our way to prosperity. They know that broad based economic growth requires a balanced approach to deficit reduction. Was spending cuts and revenue. And with everybody doing their fair share. And that's the approach I offered -- On Medicare aren't prepared to enact -- reforms will achieve the same amount of health care savings by the beginning of the next decade. That the reforms proposed by the bipartisan Simpson Bowles commission. Already be Affordable Care Act is helping to slow the growth of health care costs. Proposing nor even further. Will reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest state. -- -- Costs by changing the way our government pays for Medicare because our medical bills shouldn't be based on the number of tests ordered -- days spent in the hospital. They should be based on the quality of care that our seniors receive. And I am open to additional reforms from both parts. So long as they don't violate the guarantee of -- secure retirement. Our government shouldn't make promises we cannot keep. But we must keep the promises -- already -- To hit the rest of our -- -- reduction target. We should do what leaders in both parties have already suggested. And save hundreds of billions of dollars by getting rid of tax loopholes and deductions for the well -- and well connected. After all why would we choose to make deeper cuts to education and Medicare. Just to protect special interest tax breaks. How that fair. Why is that deficit reduction. Is a big emergency -- Justifying making cuts in Social Security benefits but not -- -- -- How does not promote growth. Now is our best chance for bipartisan. Comprehensive. Tax reform that encourages job creation and helps bring down the -- for. The American people deserve a tax code that help small businesses spend less time filling out complicated forms. And more time expanding and higher. The tax code and ensures billionaires would not part accounts can't work the system and pay a lower rate than their hard work and secretaries. A tax code that lowers incentives to move jobs overseas. And lowers tax rates for businesses and manufacturers. They're creating jobs right here in the United States. I realize the tax reform and entitlement reform. Will not be easy. The politics will be hard for both sides. None of us will get a 100% of what we want. But the alternative it will cost us jobs and hurt our economy. Visit hardship on millions of hardworking Americans. So what's -- party interests aside. And worked to pass a budget that replaces reckless cuts. With Smart savings and wise investments in our future and let's do it without the brinksmanship that stresses consumers and scares off investors. The greatest nation -- The greatest nation on earth cannot keep conducting its business by dripping from one manufactured crisis to the next. Let's agree right here right now. Now to keep the people's government open and pay our bills on time. Always uphold. The full faith and credit of the United States -- The American people -- work too -- For too long rebuilding from one crisis to see -- elected officials because another.
This transcript has been automatically generated and may not be 100% accurate.