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Counter proposal

Politics | In response to the GOP budget plan, President Obama looks to cut defense, tweak entitlements, and raise taxes

WASHINGTON-Responding to bipartisan complaints that he has been late to the deficit debate, President Barack Obama took the White House megaphone on Wednesday to trumpet a deficit reduction proposal that includes tax increases.

Obama said his new plan would cut the deficit by $4 trillion during the next 12 years. His proposal includes lowering defense spending by $400 billion, reworking the tax code, and tweaking entitlement programs such as Medicare and Medicaid.

The president's plan does not go as far as the Republican budget plan, introduced last week, which contains nearly $6 trillion in cuts over the next decade.

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"We have to use a scalpel and not a machete to reduce the deficit," Obama said in his speech at George Washington University. "But doing nothing on the deficit is just not an option. 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."

Before Obama's speech, House Majority Leader Eric Cantor, R-Va., warned that any plan that included a tax increase would go nowhere in the GOP-led House.

"Most people understand that Washington doesn't have a revenue problem, it has a spending problem," said Cantor during an appearance on CBS's The Early Show. "We can't raise taxes. That was settled last November during the elections."

With Rep. Paul Ryan, R-Wis., the architect of the Republican budget proposal in the audience, Obama devoted large portions of his speech to attacking the more ambitious GOP plan. The president said proposed GOP cuts "tell us we can't afford the America we believe in. And they paint a vision of our future that's deeply pessimistic. . . . The fact is, their vision is less about reducing the deficit than it is about changing the basic social compact in America."

Light on the specifics of his plan, the president's speech laid out in stark terms the philosophical differences between conservatives and liberals over the role of government in society. Obama, a former law school instructor, often seemed in professorial mode during his speech: While acknowledging the individuality of Americans, he also argued that government is the best vehicle to "do together what we cannot do as well for ourselves."

The president also blamed much of the current fiscal difficulties on George W. Bush's White House: "By the time I took office, we once again found ourselves deeply in debt and unprepared for a Baby Boom retirement that is now starting to take place."

Obama's plan calls for three quarters of the deficit reduction to be covered by spending cuts while $1 trillion would come from new tax revenue. Much of that would result from ending the Bush-era tax rates and from changing the tax code to limit tax deductions for the nation's wealthy.

Republicans were quick to jump on the president's proposed tax increases.

"The automatic tax hikes President Obama proposes will actually make it harder for us to pay down the debt, because they will diminish the job creation and investments needed to grow the economy," said Rep. Tom Price, R-Ga.

While Obama's plan calls for $480 billion in savings through spending reductions in Medicare and Medicaid, the details for accomplishing this were largely missing. The president did renew a pledge to bolster an independent board that sets Medicare reimbursement rates.

The president assured the nation that he "will preserve these healthcare programs as a promise we make to each other in this society."

Starting in May, Vice President Joe Biden, according to Obama, will begin regular meetings on Capitol Hill with a goal of reaching a bipartisan budget agreement by the end of June.

But Republicans do not seem eager to embrace any of the president's budget specifics.

Edward Lee Pitts
Edward Lee Pitts

Lee is WORLD's Washington Bureau chief. As a reporter for the Chattanooga Times Free Press, he was embedded with a National Guard unit in Iraq. He also once worked in the press office of Sen. Lamar Alexander.

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