Obama calls for tax hike for the rich

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In contrast to the Republican budget proposals, President Obama today rolled out a "framework" he said will reduce the deficit by $4 trillion but save Medicare, Medicaid and Social Security, end the Bush tax cuts for the rich and cut military spending.

In his nationally televised speech this afternoon Obama emphasized that he would not renew Bush's tax cuts for the 2 percent of Americans making $250,000 or more.

The president said his approach is to "put every kind of spending on the table, protect the middle class and preserve and protect seniors who have worked all their lives." The approach detailed by Obama contrasts sharply with the plan put forward by Republican Rep. Paul Ryan.

The president said Ryan's plan was "not about budget deficit reduction but about extinguishing the long cherished social compact in America." He pledged that the Republican budget would never become law "as long as I am president."

Obama said Medicare and Medicaid must be preserved and that the GOP plan was essentially "pessimistic" because it says "the greatest nation on earth cannot take care of those of its people who are most in need."

"There's nothing courageous about asking for sacrifice from those who can least afford it and don't have any clout on Capitol Hill," he said. "And this is not a vision of the America I know."

Obama said his approach to savings from health care is to reduce costs, not to reduce services. He said implementation of his health care reform law would shave $1 trillion off the federal deficit and that he favored other cost-saving measures to shave an additional $480 billion in health care spending by 2023 and an additional #1 trillion during the 10 years following that.

He noted that Social Security does not contribute to the federal deficit and that it had to be "strengthened" for the long haul without slashing benefits for future generations.

He said the Ryan budget is "a document that says we cannot afford to keep our promises to seniors, the poor or the sick, then says we can afford a trillion in tax cuts for millionaires and billionaires."

The president also called for a $400 billion cut in defense spending by 2023 and $773 billion in non-discretionary spending by then.

The latter proposal, plus one that would close some tax loopholes that favor the rich in exchange for overall lower corporate tax rates, were made first by the Bowles-Simpson deficit reduction commission.

The Obama framework also calls for a "debt failsafe" to kick in by 2014. If the deficit is not coming down as planned the "fail safe" would trigger across-the-board spending reductions except for Social Security, Medicare and programs that benefit the poor.

About $1 trillion of the president's deficit reduction would come from tax increases while $3 trillion would come from spending cuts.

Labor and its allies have questioned the big rush by lawmakers into a deficit reduction plan before the economy has a chance to recover. Many say it is too soon to be talking about big spending cuts and argue that spending to create jobs would be more in order.

Policy analysts at the labor-backed Economic Policy Institute warn that the Republican spending-cuts push could also worsen unemployment. "The Republican plan," said analyst Heidi Shierholz, "does nothing to help the 24.5 million underemployed and unemployed people who are out there. In fact, it would deny access to the American dream to even more millions. Elimination of Social Security, Medicare and Medicaid would throw many millions more into poverty."

Photo: President Barack Obama President meets with the House and Senate Leadership in the Cabinet Room of the White House to discuss the budget earlier today. By Pete Souza, via the White House news service.

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  • The choice is clear.

    A return to reasonable Clinton era tax rates on the rich and protecting Medicare, Medicaid, and Social Security. (Obama/Democratic Party)

    or

    Even more tax cuts for the rich and the elimination of Medicare & Medicaid. (Ryan/Republican Party)

    ~~~

    I don't think it's a difficult choice and I really don't think it's a difficult choice for most Americans.

    Trickle down economics doesn't work for anyone but the super wealthy.

    Vote Obama in 2012.

    Posted by Johnnie Walker, 04/14/2011 9:40pm (3 years ago)

  • Bullcrap quotient nearly complete.

    Posted by David Bosworth, 04/14/2011 4:39pm (3 years ago)

  • nice article

    Posted by lduende, 04/14/2011 7:16am (3 years ago)

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