President Obama today outlined a revamped plan to reduce the nation’s debt by more than $2 trillion in new tax increases and entitlement reforms, asking “everybody to do their part so that nobody has to bear too much of the burden on their own.”
The plan, however, will likely be deemed dead-on-arrival by Republicans, who have vowed to reject tax increases as part of any plan to bring down the deficit.
“We can’t just cut our way out of this hole. It’s going to take a balanced approach,” Obama said in the Rose Garden today. “If we’re going to make spending cuts … then it’s only right that we ask everyone to pay their fair share.”
The bulk of the savings in the president’s plan come from $1.5 trillion in deficit-reduction through new taxes for high-end earners and $580 billion in cuts to entitlement programs, including $248 billion to Medicare and $72 billion to Medicaid.
The White House is seeking to draw stark contrasts with Republicans and force them to align with corporations and the wealthy. The president made clear today that he will veto any plan that seeks to cut the deficit through spending cuts alone and does not include tax increases as well.
“I am ready, I am eager to work with Democrats and Republicans to reform the tax code to make it simpler, to make it fairer and make America more competitive,” Obama said. ”But any reform plan will have to raise revenue to help close our deficit. That has to be part of the formula.”
The move puts the White House at odds with Republicans who have already spoken out against the president’s plan to raise taxes, calling it “class warfare,” a notion the president sternly rejected today.
Republicans have specifically taken issue with the president’s “Buffet Rule” proposal. Named for the billionaire investor Warren Buffett, the rule would require those making more than $1 million a year to pay the same tax rate as middle-class families.
“Middle- class families shouldn’t pay higher taxes than millionaires and billionaires,” Obama said. ”That’s pretty straightforward. It’s hard to argue against that. Warren Buffett’s secretary shouldn’t pay a higher tax rate than Warren Buffett. There’s no justification for it.”
Republicans reject that argument. “Class warfare will simply divide this country more. It will attack job creators, divide people and it doesn’t grow the economy,” Rep. Paul Ryan, R-Wis., said on FOX News Sunday. “Class warfare may make for really good politics, but it makes for rotten economics.”
Senate Minority Leader Mitch McConnell, R-Ky., agreed, mocking the Buffet argument in an interview on NBC’s “Meet the Press.
“If he’s feeling guilty about it, I think he should send in a check. … But we don’t want to stagnate this economy by raising taxes,” he said.
The president today said this kind of thinking was “unacceptable” to the American people. “This is not class warfare. It’s math,” he said. “The money is going to have to come from someplace.”
Obama also proposed other means to raise taxes, including more than $800 billion by allowing the Bush tax cuts for upper income earners to expire and $300 billion by closing loopholes and eliminating special-interest tax breaks.
In total, the president’s plan will claim more than $4 trillion in deficit reduction through entitlement cuts, tax increases and war savings, in particular. The proposal includes $1.2 trillion in savings from the Budget Control Act and $1.1 trillion from drawing down the wars in Iraq and Afghanistan.