Reactions to the President's speech
This afternoon, the President delivered his highly anticipated speech on the administration’s efforts to control the nation’s growing deficit. The plan aims to reduce the deficit by $4 trillion over 12 years through spending cuts, controlling interest costs, and reducing tax expenditures.
President Barack Obama proposed a debt-cutting plan on Wednesday that calls for $4 trillion in deficit reduction over 12 years, along with an automatic trigger for spending cuts and tax increases if targets to rein in the deficit aren’t met.
While calling for an additional $2 trillion in spending cuts beyond his most recent budget, the president proposed no new tax or revenue proposals, though he stood by his long-stated plan to allow the Bush-era income tax rates to expire. That approach may dampen some Republican criticism of him but is certain to anger liberals who object to additional cuts in government services without parallel tax hikes.
“We have to use a scalpel and not a machete to cut the deficit … but doing nothing on the deficit is just not an option,” Obama told a largely silent audience at George Washington University. “Ultimately, all this rising debt will cost us jobs and damage our economy. It will prevent us from making the investments we need to win the future. … We can solve this problem. We came together as Democrats and Republicans to meet this challenge before and we can do it again.”
The Washington Post adds:
President Obama unveiled a framework Wednesday to reduce borrowing over the next 12 years by $4 trillion — a goal that falls short of targets set by his deficit commission and House Republicans — and called for a new congressional commission to help develop a plan to get there.
In his most ambitious effort to claim the mantle of deficit cutter, Obama proposed sharp new cuts to domestic and military spending, and an overhaul of the tax code that would raise fresh revenue. But he steered clear of fundamental changes to Medicare, Medicaid and Social Security — the primary drivers of future spending.
A fact sheet on the proposal released by the White House can be viewed here.
Stay tuned to Bankrupting America for more on the White House’s long-term economic plans.