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Obama draws battle line over $1.5T in tax hikes
WASHINGTON - President Barack Obama's proposal to reduce long-term deficits with $1.5 trillion in new taxes is less an opening bid in a negotiation than it is an opening salvo in a struggle to draw sharp contrasts with congressional Republicans.
Mr. Obama's proposal is aimed predominantly at the wealthy and comes just days after House Speaker John Boehner ruled out tax increases to lower deficits. It also comes amid a clamor in his own Democratic Party for Mr. Obama to take a tougher stance against Republicans. And while the plan stands little chance of passing Congress, its populist pitch is one that the White House believes the public can support.
The core of the president's plan totals just more than $2 trillion in deficit reduction over 10 years. It combines the new taxes with $580 billion in cuts to mandatory benefit programs, including $248 billion from Medicare.
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The administration also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.
The deficit reduction plan represents an economic bookend to the $447 billion in tax cuts and new public works spending that Mr. Obama has proposed as a short-term measure to stimulate the economy and create jobs. He's submitting his deficit fighting plan to a special joint committee of Congress that is charged with recommending deficit reductions of up to $1.5 trillion over 10 years.
In a defiant note, administration officials made clear Sunday that Mr. Obama would veto any Medicare benefit cuts that aren't paired with tax increases on upper-income people.
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The White House sees Mr. Obama's plan as a way to draw a sharp contrast between the president and Republicans in Congress, based on the fact that their approval rating - just 12 percent - is much lower than his own, reports CBS News White House correspondent Bill Plante.
Officials cast Mr. Obama's plan as his vision for deficit reduction, and distinguished it from the negotiations he had with Boehner in July as Mr. Obama sought to avoid a government default.
As a result, it includes no changes in Social Security and no increase in the Medicare eligibility age, which the president had been willing to accept this summer.
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Moreover, the new tax revenue Mr. Obama is seeking is nearly double the $800 billion that Boehner had been willing to consider in July. Republicans were already lining up against the president's tax proposal before they even knew the magnitude of what he intended to recommend.
"Class warfare may make for really good politics but it makes for rotten economics," GOP Rep. Paul Ryan of Wisconsin, the House Budget Committee chairman, said Sunday in reaction to one Obama tax proposal to impose a minimum tax rate on wealthy filers.
Key features of Mr. Obama's plan, as described by senior administration officials Sunday evening:
- $1.5 trillion in new revenue, which would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.
- $580 billion in cuts in mandatory benefit programs, including $248 billion in Medicare and $72 billion in Medicaid and other health programs. Other mandatory benefit programs include farm subsidies.
- $430 billion in savings from lower interest payment on the national debt.
By adding about $1 trillion in spending cuts already enacted by Congress and counting about $1 trillion in savings from the drawdown of military forces from Iraq and Afghanistan, the combined deficit reduction would total more than $4 trillion over 10 years, senior administration officials said.
Republicans have ridiculed the war savings as gimmicky, but House Republicans included them in their budget proposal this year and Boehner had agreed to count them as savings during debt ceiling negotiations with the president this summer.
Mr. Obama backed away from proposing sweeping changes to Medicare, following the advice of fellow Democrats that it would only give political cover to a privatization plan supported by House Republicans that turned to be unpopular with older Americans.
Administration officials said 90 percent of the $248 billion in 10-year Medicare cuts would be squeezed from service providers. The plan does shift some additional costs to beneficiaries, but those changes would not start until 2017.
Illustrating Mr. Obama's populist pitch on tax revenue, one proposal would set a minimum tax on taxpayers making $1 million or more in income. The measure -- Mr. Obama is going to call it the "Buffett Rule" for billionaire investor Warren Buffett -- is designed to prevent millionaires from taking advantage of lower tax rates on investment earnings than what middle-income taxpayers pay on their wages.
At issue is the difference between a taxpayer's tax bracket and the effective tax rate that taxpayer pays. Millionaires face a 35 percent tax bracket, while middle income filers fall in the 15 or 25 percent bracket. But investment income is taxed at 15 percent and Buffett has complained that he and other wealthy people have been "coddled long enough" and shouldn't be paying a smaller share of their income in federal taxes than middle-class taxpayers.
On "Face the Nation" Sunday, former President Bill Clinton said Mr. Obama's idea to tax millionaires is an idea whose time has come.
"I don't think that's such a draconian thing. He basically is asking us to return to the tax rates of the 90s," Clinton said.
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If it's so easy being rich, why are there so few of them?
You dont want to raise taxes in the middle of a recession, because that would take more demand out of the economy and put businesses in a further hole.
Mortarman29 - Raising gasoline pricies in a recession has the same effect haowever take a look at what they are trying to charge us for a gallon of gas. Wonder if the oil companies and republican'ts care about seeing our country recover??
There they are all wrapped up in the American flag,claiming to be the real and great americans living in the greatest country in the world. But dont ask them to pay more taxes to fix it. Hey didnt Ronald Reagan raise taxes.........?
There they are all wrapped up in the American flag,claiming to be the real and great americans living in the greatest country in the world. But dont ask them to pay more taxes to fix it. Hey didnt Ronald Reagan raise taxes.........?
Again, first of all, you havent shown us where in the Constitution it says the Congress doesnt have that power.
Second, this act creates the budgeting process for submitting proposals to Congress. Nowhere in there does it limit Congress to the president's proposals.
The requirement of this act was to allow the executive branch to submit what they thought the budget should be. And in many cases, it is a starting point where Congress then adds or subtracts from it. But, Congress is free to do anything they want with it. They can vote on it as is. They can add to it. They can subtract from it.
Or they can throw it in the garbage can and pass something else.
Again, you have no idea what you are talking about!
Translation: "I don't care what the law says, or how the process works! If it doesn't fit MY AGENDA, and doesn't work the way that I want it to, then it's 'unconstitutional'!"
Stick with that, genius.
repubs have passed 12 jobs bills out of the house since Jan 1st and all but one have died in the senate. They have passed another 6 energy bills and all are still stalled in the senate.
Just because you don't like their ideas does not mean they're not doing anything.
"Tax cuts for the rich", "abolish Social Security and Medicare" and "eliminate the EPA" aren't going to do anything to fix the nation's economy.
All those plans do is continue the republicans agenda that they've been working on for decades.
Might want to educate your ignorant self before you keep spouting off.
http://thehill.com/blogs/on-the-money/budget/156379-house-clears-ryans-2012-budget-plan-conservatives-want-more-cuts
Did you even read the article?!?
That was a "budget resolution" which seeks to lower the spending that the US pays every year for entitlement programs and WAS NOT a "annual budget for fiscal 2012" as we've been discussing?!?
The level of incompetence that you trolls have is outrageous!
Hungry you truly are as dumb as I thought you were!
Nowhere in your wiki link does it say congress can't create budgets or refuse the president's budget recommendations.
So I'm supposed to scour the constitution looking for something that doesn't exist?
Why don't you find in the constitution where the congress is prohibited from giving free twinkies to every American citizen each year.
If you can't find that "prohibition" in the Constitution, does that mean that congress is then authorized to do it whenever they want?
I'm never amazed by just how dumb you conservatives really are.