WASHINGTON — President Barack Obama will announce a plan to slash more than $3 trillion from the nation’s deficit over the next decade by winding down the wars in Afghanistan and Iraq, raising taxes on wealthier Americans, closing tax loopholes and cutting the cost of Medicare and other government health programs, senior White House officials said.
Obama also will warn congressional Republicans during a Rose Garden speech Monday: If they pass a bill that cuts programs for poor and elderly Americans without asking profitable corporations and others to sacrifice, he will veto the measure.
“In his remarks, the president will make clear he’s not going to support any plan that asks everything of some Americans and nothing of others,” said a senior White House aide, who spoke on the condition of anonymity so he could describe the plan to reporters Sunday.
Obama will present his recommendations to a congressional “super-committee” that is considering a deficit-reduction package of its own. The 12-member committee, an outgrowth of the debt-ceiling negotiations over the summer, is charged with hammering out a bill that will go to Congress for an up-or-down vote this year. The committee must complete its work by Nov. 23.
Obama hopes his proposal will form the basis of a deficit-cutting package that Congress ultimately approves. Failing that, it would give him an issue to use in the 2012 campaign.
His plan for lopping $3 trillion from the deficit is on top of the approximately $1 trillion in spending cuts that he signed into law in August, after reaching a deal with Republican congressional leaders to lift the nation’s debt ceiling and avert a potential default. Obama pledged to unveil the plan earlier this month, when he called for a $447 billion jobs bill as he addressed a joint session of Congress.
Breaking down the numbers Sunday night, White House advisers said they would reach the deficit target by:
Raising $1.5 trillion by a tax-code overhaul. About $800 billion of that would come from the expiration of the George W. Bush-era tax cuts for upper-income Americans — families who earn more than $250,000 a year, and individuals who earn more than $200,000. The other $700 billion would consist of revenue increases achieved by closing loopholes, limiting deductions for those high earners, and ending tax breaks for oil and gas companies. As part of any changes to tax law, the White House wants lawmakers to follow a principle it calls the “Buffett rule”: No one earning more than $1 million a year should be taxed at a lower rate than middle-income households.
Saving $1 trillion by wrapping up the Iraq and Afghan wars. Obama’s aim is to steadily withdraw U.S. forces from Afghanistan and transfer combat responsibilities to the Afghans by 2014.
Cutting $580 billion from various federal programs, including the major health care entitlement programs Medicare and Medicaid.
The Buffett rule — named for Obama supporter Warren E. Buffett, a billionaire investor who complains that his effective tax rate is less than the rate his secretary pays — drew heated comments on the Sunday talk shows, along with GOP vows to oppose it on grounds that it would hurt economic growth.
