WASHINGTON – In unveiling his deficit-reduction plan Monday, President Obama spelled out stark ideological distinctions between himself and Republicans on the path to repairing a gloomy American economy.
By Nicholas Kamm, AFP/Getty Images
President Obama called for budget cuts of $3 trillion but warned Republicans he will veto any bill that trims health care for seniors without hiking taxes on the rich.
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By Nicholas Kamm, AFP/Getty Images President Obama called for budget cuts of $3 trillion but warned Republicans he will veto any bill that trims health care for seniors without hiking taxes on the rich.
With an eye toward next year's presidential election, Obama challenged the core principles of Republicans, who accused him of committing class warfare for backing tax increases on the wealthy as part of the answer to reducing the nation's $14.3 trillion debt.
"I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare," Obama said. "I think it's just the right thing to do."
Voters are evenly divided (45%-45%) between Obama and Republicans in Congress on who they trust more to take steps to create a strong U.S. economy in the long run, according to the latest USA TODAY/Gallup Poll. Voters were surveyed from Thursday to Sunday.
Surrogates for Obama cheered the president's plan to raise $1.5 trillion in new tax revenue from wealthy Americans as one way to help cut the nation's deficit.
The tax hike on wealthy individuals and corporations — the so-called Buffett Rule named after billionaire Warren Buffett— would include letting Bush-era income tax cuts expire for individuals making more than $1 million and by closing corporate tax loopholes.
"The Buffett Rule has the potential to be a game changer in the tax debate," said Sen. Charles Schumer, D-N.Y. "It will make the Republican position almost indefensible. The president has a winning hand."
Jerry Austin, a Democratic strategist in the battleground state of Ohio, said Obama's proposal was as important for its style as it was for its substance.
"For the last three years, he's been a negotiator and a conciliator," Austin said. "In this speech, he made clear that (Republicans) caused these problems and this is how he's going to fix them."
With Republicans in control of the House, the proposal appears to have little chance of going anywhere, but it allows the president to contrast his vision against Republicans as each side presents its plan for pulling the country out of a deep economic malaise.
Obama had championed letting Bush-era tax cuts expire for families earning more than $250,000 last year, but he eventually agreed to extend the tax cuts through 2012 as part of a budget deal brokered in December.
Obama's deficit-reduction plan includes about $580 billion in adjustments to health and entitlement programs and counts more than $1 trillion in savings over 10 years from ending the wars in Iraq and Afghanistan.
House Speaker John Boehner, R-Ohio, criticized Obama's proposal, saying it would raise taxes on both small businesses and on private capital.
Candidates in the Republican presidential field charged it would smother job creation.
"The president penalizes investment when it is needed most, discourages charitable giving and doubles down on a failed government stimulus strategy," Texas Gov. Rick Perry said.
Former Massachusetts governor Mitt Romney was even less charitable. "It is yet another indication that President Obama has no clue how to bring our economy back," Romney said.
Voters appear warm to certain aspects of the Obama plan. According to the USA TODAY/Gallup Poll, 70% favor increasing taxes by eliminating certain tax loopholes, and 66% back increasing income taxes for individuals making more than $200,000 and families earning at least $250,000.
Bill Burton, a former Obama administration spokesman who runs a political action committee backing Obama and Democratic candidates, said Republican attempts to thwart Obama's proposal come "at their own peril."
"The American people aren't looking for no action in Washington," Burton said. "They're looking for leadership to make the economy better, and if Republicans get in the way of that, they'll pay a price."
Contributing: Jackie Kucinich and Catalina Camia
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