A combative US President Barack Obama on Monday demanded that the richest Americans pay higher taxes to help cut soaring US deficits by more than US$3 trillion as he drew clear battle lines for next year’s elections. He promised to veto any effort by congressional Republicans to cut government healthcare benefits for the elderly without raising taxes as well.
“This is not class warfare. It’s math,” Obama declared, anticipating Republican criticism, which was quick in coming.
“Class warfare isn’t leadership,” US House Speaker John Boehner said in Cincinnati.
While the plan stands little chance of passing US Congress, its populist pitch is one that the White House believes the public can support.
The president’s proposal, which he challenged Congress to approve, would predominantly hit upper--income taxpayers and would also target tax loopholes and subsidies used by many larger corporations. It would spare retirees from any changes in Social Security retirement benefits, and it would direct most of the cuts in Medicare spending to healthcare providers, not its elderly beneficiaries.
Benefit programs would not be unscathed. Obama’s plan would reduce spending for those, including Medicare and Medicaid, the government healthcare program for the poor, by US$580 billion. However, with Republicans calling for massive cuts in entitlement programs, Obama said he would veto any legislation that cut Medicare benefits without raising new revenue.
His plan also would count savings of US$1 trillion over 10 years from the withdrawal of US troops from Iraq and Afghanistan.
The deficit-reduction plan represents Obama’s longer-term -follow-up to the US$447 billion in tax cuts and new public works spending that he has proposed as a short-term measure to stimulate the economy and reduce unemployment. The new proposal also inserts the president’s voice into the legislative discussions of a joint congressional -“supercommittee” charged with recommending deficit reductions of up to US$1.5 trillion.
Defending his emphasis on new taxes rather than only spending reductions, Obama said: “We can’t just cut our way out of this hole.”
The Republican reaction was swift and bluntly dismissive.
“Veto threats, a massive tax hike, phantom savings and punting on entitlement reform is not a recipe for economic or job growth — or even meaningful deficit reduction,” US Senate Republican leader Mitch McConnell said. “The good news is that the Joint Committee is taking this issue far more seriously than the White House.”