April 13th, 2011
06:45 PM ET

Obama calls for $4 trillion in deficit reduction over 12 years

Alan Silverleib and Tom Cohen

Washington (CNN) - President Barack Obama unveiled his long-awaited deficit reduction plan Wednesday, calling for a mix of spending reductions and tax hikes that the White House claims would cut federal deficits by $4 trillion over the next 12 years without gutting popular programs such as Medicare and Medicaid.

Obama's plan includes a repeal of the Bush-era tax cuts on families making more than $250,000 annually - something sought by Democrats but strongly opposed by Republicans. The president also called for the creation of a "debt fail-safe" trigger that would impose automatic across-the-board spending cuts and tax changes in coming years if annual deficits are on track to exceed 2.8% of the nation's gross domestic product.

The president claimed that by building on or adjusting the health care reform bill passed last year, $480 billion would be saved by 2023, followed by an additional $1 trillion in the following decade. For example, he proposed tightly constraining the growth in Medicare costs starting in 2018.

"Doing nothing on the deficit is just not an option," Obama said in the speech at George Washington University, adding that "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's approach seeks to carve out a political middle ground between conservatives - who are pushing for deficit reduction based solely on spending cuts and expected economic growth - and liberals, who are generally resisting entitlement reform and seeking higher corporate and personal taxes.

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soundoff (3 Responses)
  1. sherry snyder

    After the president spoke this afternoon, three republicans gave their opinions.
    they were attacking the man not the issues.They acted more like frat boys calling out a rival than reprsentatives of the people. What happened to respect for not only the position of president but also their own dignity in the house. They claim this is all the fault of this administration. They forget
    the mess he took on from the previous administration. Regardless of the subject,they cannot expect more of our youth than what behavior they model.
    Sherry Snyder

    April 13, 2011 at 10:30 pm |
  2. Jim

    First thing to Cut- The Presidents & Congresses pay until they have a Balanced Budget ON TIME.
    second cut – Any money going to Illegal Ailean Criminals
    3rd cut- Foreign aid until EVERY United States CITIZEN is PROPERLY taken Care of.

    April 13, 2011 at 9:03 pm |
  3. Jo Ann

    I loved Obama's speech today. Raise Taxes,Raise Taxes. Where was the cutting of spending? Raise taxes on the rich. WOW! I didnot realize we had enough rich people in America to cover this kind of debt! Cut the spending,cut the spending!

    April 13, 2011 at 8:34 pm |