President Obama, in a speech at Washington’s George Washington University on Wednesday, announced his plan for cutting the budget deficit by $4 trillion over the next 12 years.
Obama’s proposal included cuts across the board for defense, health care, and other domestic spending while raising tax rates for the richest of Americans.
“Doing nothing on the deficit is just not an option,’ said the president. “Our debt has grown so large that we could do real damage to the economy if we don’t begin a process now to get our fiscal house in order.”
Obama said that reducing the budget deficit would affect the lives of all Americans in a profound way, adding that the debate in Washington over budgets and deficit is more than just cutting and spending. The president said that his plan is about the future Americans want.
“So this is our vision for America—a vision where we live within our means while still investing in our future; where everyone makes sacrifices but no one bears all the burden; where we provide a basic measure of security for our citizens and rising opportunity for our children,” Obama said.
President Obama’s vision for achieving the goal includes limiting itemized deductions such as homeownership or charitable deductions for the wealthiest 2 percent of Americans while also enhancing the cost-cutting programs in health care.
However, the president rejected Republicans’ proposals to maintain and reduce the tax burden on the upper class. According to Obama, itemized deductions provide millionaires an average tax break of $75,000 as opposed to middle class Americans who don’t itemize deductions.
“Some will argue we shouldn’t even consider raising taxes, even if only on the wealthiest Americans. It’s just an article of faith for them,” President Obama said. “I say that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more.”
The president also called on Congress to reform the individual tax code in order to make it more fair and simple, and said that the government should reform its corporate tax code as well to make our businesses and our economy more competitive.
Obama specifically outlined four steps in his plan for reducing the country’s deficit. The first proposed step was to keep annual domestic spending low by building on the savings—a measure that would save $750 billion over 12 years.
“I will not sacrifice the core investments we need to grow and create jobs. We’ll invest in medical research and clean energy technology. We’ll invest in new roads and airports and broadband access. We will invest in education and job training. We will do what we need to compete and we will win the future,” the President said, echoing a theme of winning the future that he first introduced months ago at his State of the Union address.
The next three steps proposed by the president include finding additional savings from the defense budget, reducing health care spending, and reducing spending in the tax code by giving no more tax cuts to the wealthiest Americans.
“We cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society,” Obama argued.
The president added that he welcomed criticism and debate from Republicans over his approach to trimming the deficit.
“I’m eager to hear other ideas from all ends of the political spectrum,” Obama said. “And though I’m sure the criticism of what I’ve said here today will be fierce in some quarters, and my critique of the House Republican approach has been strong, Americans deserve and will demand that we all bridge our differences, and find common ground.”
Obama ended his speech by appealing to the American dream and to the collective good of the nation.
“And I know that if we can come together, and uphold our responsibilities to one another and to this larger enterprise that is America, we will keep the dream of our founding alive in our time, and pass on to our children the country we believe in.”