Obama draws battle lines with $4 trillion deficit reduction plan (Lead)April 14th, 2011 - 12:35 pm ICT by IANS
Washington, April 14 (IANS) Battle lines were clearly drawn as US President Barack Obama unveiled a plan to cut federal deficits by $4 trillion over the next 12 years without gutting popular programmes such as Medicare and Medicaid.
Calling for a mix of spending reductions and tax hikes Obama’s plan outlined Wednesday includes a repeal of the Bush-era tax cuts on families making more than $250,000 annually-something sought by Democrats but strongly opposed by opposition Republicans.
Obama also called for the creation of a “debt fail-safe” trigger that would impose automatic across-the-board spending cuts and tax changes in coming years if annual deficits are on track to exceed 2.8 percent of the nation’s gross domestic product.
The president claimed that by building on or adjusting the health care reform bill passed last year, $480 billion would be saved by 2023, followed by an additional $1 trillion in the following decade.
“Doing nothing on the deficit is just not an option,” Obama said in the speech at George Washington University, adding that “our debt has grown so large that we could do real damage to the economy if we don’t begin a process now to get our fiscal house in order.”
Obama called for political leaders to put aside orthodox party ideology and work together for the good of the country, saying “we can solve this problem” while noting that “any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget.”
At the same time, Obama blasted the House Republican 2012 budget proposal unveiled last week, saying it would “lead to a fundamentally different America than the one we’ve known throughout most of our history.”
“These are the kind of cuts that tell us we can’t afford the America that I believe in and that I think you believe in,” Obama said of the plan by House Budget Committee Chairman Paul Ryan. “I believe it paints a vision of our future that’s deeply pessimistic.”
Obama administration’s package stands in sharp contrast to Ryan’s blueprint, which calls for cutting the debt by $4.4
trillion over the next decade while radically overhauling Medicare and Medicaid and dropping the top personal and corporate tax rate to 25 percent.
Republicans in turn harshly criticised the president’s call for higher taxes on wealthier Americans.
“Any plan that starts with job-destroying tax hikes is a non-starter,” said Republican House Speaker John Boehner. “Republicans are fighting for meaningful spending cuts and fighting against any tax increases on American small businesses.”
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