President Obama unveiled his lengthy framework today for reducing the federal budget gap by $4 trillion over the next 12 years, stressing that health care costs must be reduced, that spending will be gutted everywhere possible and that he will not renew tax cuts to the rich.
"We will all need to make sacrifices, but we don’t need to sacrifice the America we believe in,” the President said in a speech at George Washington University in Washington, D.C.
While Obama was fairly quiet over the last week when debates raged over how to address the nation’s deficit, the President said he was taking an honest and balanced approach to the issue. "Everything is on the table," he said about what is being considered for cuts.
Three quarters of the deficit reduction is to be arrived at through spending reductions – from $770 billion to non-security discretionary spending by 2023, to $400 billion in cuts to “security” or defense spending by 2023.
The other quarter is aimed at tax reform and increases, beginning with an axing of the Bush tax cuts for Americans making $250,000 or more.
“We cannot afford $1-trillion worth of tax cuts for every millionaire and billionaire in our society,” Obama said. “We can’t afford it. And I refuse to renew them again.”
During the speech, Obama also rejected a plan that was released last week by Rep. Paul Ryan of Wisconsin, saying it was "less about reducing the deficit than it is about changing the basic social compact in America."
As a counter to Ryan’s budget approach to Medicare and Medicaid, which he believes would put the weight of costs on seniors and the poor, Obama proposed reform that would curb $480 billion in spending by 2023.
Obama also says there will be a "debt failsafe," that will kick into action by 2014 if deficit projections aren't improving by then. The failsafe would trigger across-the-board spending reductions but wouldn’t affect Social Security, low-income programs or Medicare benefits.
Cuts are also expected to the federal pension insurance system, anti-fraud systems and agricultural subsidies.
The plan also calls for a joint-party committee, chaired by Vice President Joe Biden, to be established and meeting by next month so that both parties can "agree on a legislative framework for comprehensive deficit reduction.”