President Barack Obama on Monday announced his plan to cut more than $3 trillion from the federal budget deficit over the next 10 years -- but at the cost of $1.5 trillion in new taxes. Republicans in Congress and the pack of candidates running for the GOP nomination wasted no time firing volleys attacking the presidents plan.
Obama spoke in the Rose Garden, trying to sell a plan that faces a tough road in Congress, where Republicans in control of the U.S. House of Representatives have vowed to fight any plan that raises taxes.
During this past decade, profligate spending in Washington, tax cuts for multimillionaires and billionaires, the cost of two wars, and the recession turned a record surplus into a yawning deficit, and that left us with a big pile of IOUs, Obama said in his speech. If we dont act, that burden will ultimately fall on our childrens shoulders. If we dont act, the growing debt will eventually crowd out everything else, preventing us from investing in things like education, or sustaining programs like Medicare.
So Washington has to live within its means, Obama continued. The government has to do what families across this country have been doing for years. We have to cut what we cant afford to pay for what really matters. We need to invest in what will promote hiring and economic growth now while still providing the confidence that will come with a plan that reduces our deficits over the long term.
Obama plugged his 80-page plan, which was released Monday, on cutting the debt.
Im laying out a set of specific proposals to finish what we started this summer -- proposals that live up to the principles Ive talked about from the beginning, Obama said. Its a plan that reduces our debt by more than $4 trillion, and achieves these savings in a way that is fair -- by asking everybody to do their part so that no one has to bear too much of the burden on their own.
The president said his plan called for cutting federal agricultural subsidies and funds to Fannie Mae and Freddie Mac. He maintained that the government would find additional savings as military operations in Afghanistan and Iraq end and companies that received bailout money from the federal government repay those funds.
Obama made no bones about his plan to raise taxes on Americans making more than $250,000 a year. Besides ending tax cuts passed twice under President George W. Bush -- and extended last year under Obama -- the president wants to raise taxes on capital gains and dividends. Obama also called for a higher tax rate on Americans making more than $1 million a year.
If were going to make spending cuts -- many of which we wouldnt make if we werent facing such large budget deficits -- then its only right that we ask everyone to pay their fair share, Obama said.
Obama took aim at U.S. House Speaker John Boehner, R-Ohio, and congressional Republicans for blocking all potential tax increases.
Im proposing real, serious cuts in spending. When you include the $1 trillion in cuts Ive already signed into law, these would be among the biggest cuts in spending in our history. But theyve got to be part of a larger plan thats balanced -- a plan that asks the most fortunate among us to pay their fair share, just like everybody else, Obama insisted.
And thats why this plan eliminates tax loopholes that primarily go to the wealthiest taxpayers and biggest corporations -- tax breaks that small businesses and middle-class families dont get. And if tax reform doesn't get done, this plan asks the wealthiest Americans to go back to paying the same rates that they paid during the 1990s, before the Bush tax cuts.
Obama insisted the tax cuts were supposed to be temporary measures and calledfor closing special interest loopholes in the tax code.
Some companies get out of paying a lot of taxes, while the rest of them end up having to foot the bill, Obama said. And this makes our entire economy less competitive and our country a less desirable place to do business. That has to change. Our tax code shouldnt give an advantage to companies with the best-connected lobbyists. It should give an advantage to companies that invest in the United States of America and create jobs in the United States of America. And we can lower the corporate rate if we get rid of all these special deals.
Insisting he was not engaged in class warfare," Obama invoked billionaire investor Warren Buffett who has said repeatedly that wealthier Americans should pay more federal taxes.
Boehner indicated in a statement released on Monday that the presidents plan would have difficulty getting through the House. He said a bipartisan committee charged with cutting $1.2 trillion from the federal government in the next 10 years would be more effective in slashing spending.
Pitting one group of Americans against another is not leadership, Boehner said. The Joint Select Committee is engaged in serious work to tackle a serious problem: the debt crisis that is making it harder to get our economy growing and create more American jobs. Unfortunately, the president has not made a serious contribution to its work today. This administrations insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programs are the reasons the president and I were not able to reach an agreement previously, and it is evident today that these barriers remain.
The leading contenders for the Republican presidential nomination took aim at Obama after his speech. They hammered him for proposing to raise taxes, arguing that it would help stifle any chance of economic recovery.
President Obamas plan is a bait and switch that offers more than a trillion dollars in higher taxes for a promise of temporary tax relief. The president penalizes investment when it is needed most, discourages charitable giving and doubles down on a failed government stimulus strategy, Gov. Rick Perry of Texas charged in a statement. Worst of all, the Obama plan fails to provide the certainty employers need to create jobs and the spending and deficit reduction our economy needs.
President Obamas plan to raise taxes will have a crushing impact on economic growth, former Gov. Mitt Romney of Massachusetts said in a statement. Higher taxes mean fewer jobs -- its that simple. This is yet another indication that President Obama has no clue how to bring our economy back. I encourage President Obama to look at my detailed economic plan to create long-term growth and prosperity for our nation. The only way to get our economy moving again is to elect a president who understands how to create jobs and rein in spending -- that is why I am running.
Attacking Obamas gimmicks and tax increases, U.S. Rep. Michele Bachmann of Minnesota took aim at Buffett as well.
"If Warren Buffett believes he doesn't pay enough taxes, then he should write a check today to the Treasury, but he and the president shouldn't enact warfare on the millions of small businesses, on charities and on middle-class America with increased tax burdens, Bachmann said in a statement. The president is compromising the future of our children with his plan to continue spending and increase taxes, and he is ruining the American economy."
Former Gov. Jon Huntsman of Utah also issued a statement condemning the presidents proposal.
President Obama continues to demonstrate that he has no new ideas on how to create American jobs," said Huntsman. For two-and-a-half years he's been peddling a version of the Buffett Tax Hike as a key pillar of his failed attempt to tax and spend and regulate this country to prosperity. That simply hasn't worked and it won't work now. President Obamas veto threats and partisan demands are a poor attempt to camouflage a $1.5 trillion tax hike that is deeply misguided and the latest example of his ineffective leadership on the economy.
The team behind U.S. Rep. Ron Paul, R-Texas, sent out national campaign chairman Jesse Benton to issue a statement attacking Obamas plan.
A $1.5 trillion tax hike will do nothing to help us out of this mess were in, and will more than likely create more problems, lead to less investment, and cause more job loss at a time when Americans of all kinds are hurting, Benton said.
President Obama and his administration refuse to confront the realities of our situation and the actions that are necessary. We must reduce spending; instead, they pretend that the budget can be balanced and prosperity restored by increasing spending and taxes. Instead of raising taxes, this administration should cut corporate welfare, foreign welfare and end the trillion-dollar overseas wars by bringing troops home.
Reach Kevin Derby at kderby@sunshinestatenews.com or at (850) 727-0859.
