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Political Hotsheet
Even if Congress enacts every penny of the $4 trillion in tax hikes and spending cuts in President Obama's deficit reduction plan, the government will still run up $6.3 trillion in deficit spending over the next ten years. © 2011 CBS Interactive Inc. All Rights Reserved.
Deficits still go up big in Obama's deficit plan
President Obama gestures while speaking in the Rose Garden of the White House, Sept. 19, 2011.
/ AP Photo/Evan Vucci
In the year 2021, the White House budget office projects the deficit will total $565 billion, just 2.3 percent of total economy. That compares to 8.5 percent of Gross Domestic Product that this year's $1.3 trillion deficit amounts to.
In its simplest terms, the president's plan calls for over $4 trillion in deficit reduction over ten years. "This plan cuts $2 in spending for every dollar in new revenue," said Mr. Obama in his Rose Garden statement unveiling his proposals. (watch some of his remarks at left)
The president's numbers include the "pay fors" in the jobs bill he sent Congress last week and the spending cuts in the Budget Control Act he signed in August 2nd to keep the U.S. Treasury from defaulting on its debt.
The most controversial provisions in his plan are among the $1.5 trillion in changes he wants in the tax code.
- $866 billion in savings by ending the Bush-era tax cuts for high-income earners.
- $410 billion by limiting deductions and exemptions for taxpayers earning over $250,000 a year
- $300 billion from closing loopholes and eliminating special interest tax breaks.
"It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million," said the president in explaining the provision.
The plan calls for a quarter trillion dollars in cuts in Medicare spending, but the White House says 90 percent of that would stem for reducing overpayments by the health care program.
President Obama was adamant in vowing to veto any deficit reduction plan that changes benefits for Medicare recipients but does not raise "serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share."
"We are not going to have a one-sided deal that hurts the folks who are most vulnerable," he stated bluntly in an effort to reassure his Democratic base.
He was also quick to dismiss Republican charges that he's engaging in "class warfare" by singling out the rich for tax hikes.
"I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare," said Mr. Obama. "I think it's just the right the thing to do."
No funds would be cut from Social Security. White House officials say Mr. Obama favors reform of the retirement program, but as part of a separate bipartisan effort, not as part of deficit reduction.
A White House list shows other proposed savings in the president's plan:
- $33 billion in agriculture subsidies, payments and programs.
- $42.5 billion in reforms to Federal employee benefit programs, both civilian and military.
- $4.1 billlion from the disposal of unused government assets, mostly buildings.
- $92.2 billion from restructuring government operations & reducing federal liabilities.
- $77.6 billion from improving Federal program management and reducing waste and abuse.
Mr. Obama said his deficit reduction proposals would not shortchange education, scientific research or infrastructure construction. "Those things are essential to our future," he insisted.
Obama steals thunder from super committee with veto threat
Obama's deficit plan revs up Democrats
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He says his plan is designed to help Washington "live within its means." But that does not mean he favors achievement of a balanced budget. He'll be happy with reducing the size of the deficit in relation to GDP to just over 2 percent.
The president's plan also provides for some new deficit spending including $6.1 billion for the financially troubled U.S. Postal Service. And the IRS would run up another $1.9 billion in deficits as part of its program to strengthen enforcement of the tax code.
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Stop listening to the lies and deceit in the rhetoric, and start looking at the numbers.
This President will bankrupt this country, totally, completely, and irrevocably, if we allow him to remain in office.
I guess you forget that every GOP presidential candidate in recent history has promised to cut spending and every one of them has added to the national debt.
Listening to lies and deceit? I guess you must be the culprit in that statement!
Maybe having the whole story -- even though it is poorly written and the headline is incendiary, the piece above does touch on the fact that deficits are not being cut FOREVER in any one Congress/administration -- would help you be a person with a valid opinion, chevy.
You do not speak for the vast majority of Americans. Maybe read EVERY opinion poll on the higher taxation for the top 2% issue and understand that fact!
He can't lead.
He talks a walk he can't walk - even with control of both houses of congress.
The glow of his grandiose promises have been overshadowed by his failure to deliver on things like openess in government (Because his democratic friends didn't even want that - Remember all their closed door meetings on the health care bill?)
This is exactly the sort of performance we should have expected from a man who was so gutless that he voted present HOW MANY TIMES? If he was a real leader he would have voted and been prepared to defend his votes - He never did.
IF the democrats have any B&&&* they will not renominate him. BUT they won't dare to do that because that would be seen as a racisst action.
So what Change can we believe in except for more debt Obama? Where is the change to improve our lives. You gave away trillions to 'save' those big corps, they gave millions in bonuses to failed leaders and what did we get out of it? The corporations survived to fail another day - AFTER the cut jobs to supposedly save the company (Translation - cut jobs to save the annual bonuses of the execs.) SOME CHANGE Obama.
Go home to Chicago and face the music there bud.
You had YOUR House and Senate and still you didn't make a dent in the problems we have - Because you are not a leader - just a talker off the streets of the Windy City creating his own hot air.
-Benjamin Franklin
$33 billion in agriculture subsidies, payments and programs.
Agriculture subsidies cannot be stopped as they are protection against sustainable prices in the international markets. Removal is almost next to impossible. The very announcement of this item, may change world view and may bring calamity.
$42.5 billion in reforms to Federal employee benefit programs, both civilian and military.
Not gonna happen. Civilian employees are protected by their respective unions. Union bosses may challenge any reforms that reduces their power. Military benefit reduction means facing the ire of the veterans. They have power and they know how to use it. Watch out for the gun battles with no holds barred, on president Barack Obama's 1012 presidential campaign.
$4.1 billlion from the disposal of unused government assets, mostly buildings.
With the real estate market, such as we have, the value of such assets is next to nothing.
$92.2 billion from restructuring government operations & reducing federal liabilities.
Teaching an old dog a new trick?
$77.6 billion from improving Federal program management and reducing waste and abuse.
Who is gonna take charge of this dirty work? Will that person make it to the next month without being tarred and feathered in the media?
...and I am Sid Harth@cogitoergosumdesign.com
$33 billion in agriculture subsidies, payments and programs.
Agriculture subsidies cannot be stopped as they are protection against sustainable prices in the international markets. Removal is almost next to impossible. The very announcement of this item, may change world view and may bring calamity.
$42.5 billion in reforms to Federal employee benefit programs, both civilian and military.
Not gonna happen. Civilian employees are protected by their respective unions. Union bosses may challenge any reforms that reduces their power. Military benefit reduction means facing the ire of the veterans. They have power and they know how to use it. Watch out for the gun battles with no holds barred, on president Barack Obama's 1012 presidential campaign.
$4.1 billlion from the disposal of unused government assets, mostly buildings.
With the real estate market, such as we have, the value of such assets is next to nothing.
$92.2 billion from restructuring government operations & reducing federal liabilities.
Teaching an old dog a new trick?
$77.6 billion from improving Federal program management and reducing waste and abuse.
Who is gonna take charge of this dirty work? Will that person make it to the next month without being tarred and feathered in the media?
...and I am Sid Harth@cogitoergosumdesign.com