President Obama on Monday will propose a deficit plan that calls for about three dollars in new tax increases for every dollar in additional spending cuts as he seeks to put his imprint on the ongoing talks over reducing the government’s staggering debt burden.
In a plan his advisors described as his ideological vision, rather than a compromise offer to the GOP, Mr. Obama will also threaten to veto any plan Congress sends him that tackles entitlements but doesn’t include tax increases, which he will argue is central to a “balanced” approach.
“The president will make clear he’s not going to support any plan that asks everything of some Americans, nothing of others,” said an administration official, who briefed reporters Sunday night in advance of a speech Mr. Obama is scheduled to give Monday. “He will veto any bill that takes one dime from the Medicare benefits seniors rely on without asking the wealthiest Americans and biggest corporations to pay their share.”
Mr. Obama will argue his plan totals $4.4 trillion in deficit reduction, though $1.1 trillion of that comes from war savings all sides agree was going to happen anyway, another $1.2 trillion that has already been enacted, and more than $450 billion in tax increases he proposed last week — and has already accounted for in new spending. Another $430 billion comes from lower interest payments because of the potential lower debt.
That means in terms of actual new proposals, the president’s plan totals about $1.2 trillion, of which the lion’s share comes from his long-standing vow to raise taxes back to Clinton-era rates on the top income brackets. The rest is $580 billion in reductions to formula-driven entitlement programs, though officials on Sunday wouldn’t detail what those cuts were, saying the specifics would be released Monday.
Those $580 billion in newly proposed cuts are dwarfed nearly three-to-one by the $1.5 trillion in additional taxes the president wants to see.