BBC News - Obama unveils plans to cut US deficit

BBC News - Obama unveils plans to cut US deficit

Obama unveils plans to cut US deficit

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US President Barack Obama has outlined plans to reduce the US deficit and to kick-start economic growth.

At the White House, he proposed cuts to healthcare benefits but said business and the wealthy must pay higher taxes.
He unveiled a plan to save more than $3tn (£1.9tn) over a decade that would pay for his plan to boost jobs, with roughly half coming from tax increases.
Republicans in Congress, who oppose tax rises, quickly criticised the plan, which they say will not boost jobs.
"Pitting one group of Americans against another is not leadership," House of Representatives Speaker John Boehner said.
Divisions reopened In a televised address from the Rose Garden at the White House, Mr Obama said that if the US did not act now, the burden of debt would fall on future generations.

"Washington has to live within its means," Mr Obama said. "We have to cut what we can't afford, to pay for what really matters."

Among the plans are proposals to cut some $250bn of spending on Medicare - the healthcare programme for the elderly.
But that proposal came with a caveat - a promise from Mr Obama that he would veto any bill eventually passed by Congress that cut healthcare but did not include new taxes on the rich.
Republicans were quick to respond to the speech.
House Speaker Boehner, whom Mr Obama singled out in his speech for having "walked away" from a "grand bargain" during the debt-ceiling debate in July, said the president's approach was unhelpful.
"This administration's insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programmes are the reasons the president and I were not able to reach an agreement previously, and it is evident today that these barriers remain," he said.
Senate Republican leader Mitch McConnell said the president's combination of "veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth - or even meaningful deficit reduction".
'Buffett rule' Mr Obama said the wealthy and corporations should pay their "fair share" to cut the deficit.

"Middle-class families shouldn't pay higher taxes than millionaires and billionaires," he said. "It's hard to argue against that."

Mr Obama suggested a "Buffett rule", which would see Americans who earn more than $1m pay the same rate of tax as those who earn less.
The proposal refers to billionaire financier Warren Buffett, who has complained that he and his wealthy peers pay relatively less tax than the people who work for them.
Many high-income Americans benefit from tax loopholes that see earnings on investment taxed at lower rates than wages.
On Sunday Republican Paul Ryan, chairman of the House budget committee and a proponent of deep cuts and no tax rises, described Mr Obama's plans as "class warfare".
The president referenced Mr Ryan's criticism on Monday, justified his tax-and-cut package by saying simply: "It's not class warfare, it's math."
Back-and-forth Mr Obama began the speech describing the proposals as "finishing what we started this summer".

In July, Mr Obama and Republicans in Congress clashed over a vote on the debt ceiling limit.

The political back and forth resulted in a last-minute formation of a deficit-reduction "super-committee" of lawmakers.
That panel, made up of six Democrats and six Republicans, is seeking $1.5tn in spending cuts to offset a rise in the debt ceiling agreed in the summer.
Mr Obama's latest plans will also go before the committee, which is not obliged to accept the president's ideas.
The debt-reduction proposals are the latest part of a growing package of plans from the Obama administration.
In early September, Mr Obama outlined a $447bn job-creation proposal in front of a prime-time joint session of Congress, vowing that new spending would be paid for as part of the latest deficit-reduction plan.
Correspondents say that Mr Obama is staking out his position on the economy in advance of the presidential race in 2012.

[Looks like the Obama propagandists need to have a little pow-pow to hone their message on the Buffett Rule.  I mean, propaganda 101 is to have a clear message and repeat it over and over until people believe it to be true.  In this case we are talking about whether or not the Buffett Rule will reduce the deficit.
Earlier in the week on a conference call with reporters, the principal deputy director of the White House National Economic Council Jason Furman told reporters that the Buffett Rule “was never our plan to bring the deficit down and get the debt under control.”  Then yesterday we have the chief propagandist Jay Carney telling reporters, “We have never made the case that this element of tax reform, by itself would solve our deficit and debt problems.”
So maybe we should go to our Dear Ruler to clear things up.  From The President’s Plan for Economic Growth and Deficit Reduction, September 2011.

The President is committed to reducing the deficit through a balanced approach—one that restrains spending across the budget, including in the tax code; asks the wealthiest among us to contribute to deficit reduction; and lays the foundation for future growth.  That is why the President is calling on the Congress to undertake comprehensive tax reform to cut rates, cut inefficient tax breaks, cut the deficit, and increase jobs and growth in the United States—while observing the “Buffett Rule” that people making over $1 million should not pay lower taxes than the middle class.

“Asks the wealthiest among us to contribute to deficit reduction.”  That should pretty much clear things up!  Obama’s own deficit reduction plan claimed that the Buffett Rule was a supposed means of deficit reduction.  Here, you can listen to Dear Ruler outline the Buffett Rule in his speech on deficit reduction. 
So .. why the change in tone?  Because now the facts – the numbers – are in, and we know that Caesar’s tax-the-rich plan is going to do nothing to reduce our deficit.  Nothing.  So now we get this “we’re raising taxes out of fairness” nonsense.  In the end this is all being done to pander to the wealth envy of Obama’s voter base.]