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President’s speech set for Wednesday will lay out different approach to deficits than GOP’s.
Obama
WASHINGTON — President Barack Obama, plunging into the rancorous struggle over America’s mountainous debt, will draw sharp differences with Republicans Wednesday over how to conquer trillions of dollars in spending while somehow working out a compromise to raise some taxes and trim a cherished program like Medicare.
Obama’s speech will set a new long-term deficit-reduction goal and establish a dramatically different vision from a major Republican proposal that aims to cut more than $5 trillion over the next decade, officials said Monday.
The speech is intended as a declaration of Obama’s commitment to seriously tame the deficit while outlining his long-term budget principles — key components of his campaign for re-election in 2012. After gingerly avoiding any discussion until now of cuts in the government’s massive benefit programs for the elderly and poor, Obama will acknowledge a need to reduce spending on Medicare and Medicaid while at the same time tackling defense spending and calling for increased taxes on the wealthy, White House officials said.
This time the stakes are higher than last week’s budget fight that barely avoided a government shutdown.
The cuts accomplished last week were for $38.5 billion over the next six months; the cuts envisioned now are for trillions of dollars over the next 10 years.
Obama’s speech, to be delivered at George Washington University, comes as Congress readies for a fierce fight over raising the nation’s debt limit. Republicans have vowed to use that vote as leverage to extract greater budget discipline from the Democrats and the president.
Setting the terms of the debate and the likely brinkmanship to follow, White House spokesman Jay Carney said on Monday: “What I’m saying is that we support a clean piece of legislation to raise the debt ceiling. … We cannot play chicken with the economy in this way.”
The president’s speech also comes amid liberal apprehension over recent Obama spending concessions and a desire among some Democrats to make proposed GOP cuts in Medicare a 2012 election issue.
House Republicans, led by the chairman of the House Budget Committee, Paul Ryan, last week unveiled a plan that would cut $5.8 trillion over 10 years with a major restructuring of the nation’s signature health care programs for the elderly and the poor. Meanwhile, six senators have formed a bipartisan group to work on their own plan to rein in long-term deficits by making changes to Medicare and Medicaid and examining a fundamental overhaul of the tax system that would yield additional revenue.
Unlike the Republican plan, Obama is also expected to call for cuts in defense spending and for tax hikes, repeating his 2012 budget plan to increase Bush era tax rates for families making more than $250,000. Obama shelved that plan in a budget compromise with Republicans.
The Republican plan, on the other hand, would make the Bush-era tax cuts permanent.
The contrast the White House would like to pitch to the public is that Obama would help reduce the deficit by increasing taxes on the rich, while Republicans would pay for their tax cuts for the wealthy by making seniors pay more for their Medicare.
Republicans on Monday said Obama’s speech was overdue.
“I’m anxious to hear what the president has to say,” House Speaker John Boehner said on Fox News. “We’ve been waiting for months for the president to enter into this debate with us. I can tell you that privately I’ve encouraged the president: ‘Mr. President, lock arms with me, let’s jump out of the boat together.’ ”
The speech is expected to affirm Obama’s stand on the spending he is not willing to cut, chiefly in the areas of education, energy, infrastructure, research and innovation. On Medicare, the federal insurance program for senior citizens, the president is expected to explain his case for cost savings without putting “all the burden on seniors,” as his senior adviser David Plouffe put it.