Politics
Obama lays out deficit plan, says the rich must ‘pay their fair share’
President Barack Obama, setting up another clash with Republicans, will propose Monday US$1.5 trillion in new taxes aimed primarily at the wealthy as part of a deficit reduction plan.
Obama’s plan has little chance of passing Congress, where Republicans control the House of Representatives. Republicans staunchly oppose any tax increases and want greater spending cuts to reduce America’s debt.
But the populist pitch could offer political benefits ahead of next year’s elections. The plan could appeal to Americans, many of whom believe the deficit can’t be reduced by spending cuts alone, according to some polls. It could also energize Obama’s fellow Democrats, who have been clamoring for the president to take a tougher stance against Republicans.
The core of the president’s plan totals just more than US$2 trillion in deficit reduction over 10 years. It combines the new taxes with US$580 billion in cuts to mandatory benefit programs, including US$248 billion from Medicare, the health insurance program for the elderly.
The administration also counts savings of US$1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.
In a defiant note, administration officials made clear Sunday that Obama would veto any Medicare benefit cuts that aren’t paired with tax increases on upper-income people.
Many liberals have criticized Obama as being too quick to yield to Republican demands in previous tax and spending fights. He needs the enthusiastic support of the Democratic base as he faces a tough re-election campaign, with unemployment hovering around 9 percent and his popularity falling.
