WASHINGTON, (Reuters) – U.S. President Barack Obama yesterday proposed slashing Washington’s budget deficit by $4 trillion with spending cuts and tax increases on the rich, after calling Republican demands for deeper reductions too radical.
Obama outlined a 12-year time-frame for achieving those reductions in a sharply political speech that was his first since he announced last week that he was running for re-election in 2012.
Obama has faced sharp criticism from both Republicans and fellow Democrats for failing to show leadership on the issue of America’s ballooning deficit, a major worry for Americans ahead of the 2012 presidential election. The deficit is projected to hit $1.4 trillion for this year.
While calling for talks with his Republican opponents on spending cuts, he devoted much of his address to attacking a Republican budget plan for 2012 that would overhaul Medicare and Medicaid and cut taxes on individuals and businesses. Obama said the plan, offered by Paul Ryan, House of Representatives budget committee chairman, offered a “deeply pessimistic” view of the country’s future and would change the “basic social compact.”
“There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires,” Obama said. Obama’s aides have tried to present him as a leader above partisan politics in the budget debate but the tone of his speech was along traditional Democratic ideological lines.
The top Republican in the House of Representatives, John Boehner, said any plan that included tax hikers was a “non-starter”.
“He is asking Congress to raise the debt limit to continue paying Washington’s bills,” Boehner said. “The American people will not stand for that unless it is accompanied by serious action to reduce our deficit. More promises, hollow targets, and Washington commissions simply won’t get the job done. The deficit issue has become entangled with the coming debate in Congress on raising the nation’s borrowing limit. Republicans say they will not vote to lift the limit without commitments to rein in long-term deficits. The debt is expected to hit the $14.3 trillion ceiling as early as mid-May and a failure to lift it could raise the specter of default.
