WASHINGTON – Offering up his own $4 trillion roadmap to tame America’s deficit and an admission that he doesn’t expect Congress to embrace it as-is, President Barack Obama on Wednesday began a concerted effort to pull together a bipartisan deal this year.
Obama’s plan, a mix of $3 in spending cuts for every $1 in tax increases to shave $4 trillion from deficit spending over the next dozen years, comes on the heels of Republicans’ “path to prosperity” proposal.
The Republican plan would cut $4.4 trillion from deficit spending over 10 years but offer a more radical downsizing of government, including the Medicare and Medicaid programs.
Republicans quickly derided Obama’s proposal as partisan and disappointing.
“When the president reached out to ask us to attend his speech, we were expecting an olive branch,” said House Budget Committee Chairman Paul Ryan, R-Wis. “Instead, his speech was excessively partisan, dramatically inaccurate and hopelessly inadequate to address our fiscal crisis.”
Added House Republican Conference Chairman Jeb Hensarling, R-Texas, who also attended, “I could have watched from my office.” House Republicans plan a vote Friday on their plan.
The high-stakes policy and political battle now under way reflects the dangerous levels of national debt – nearing $14.3 trillion and growing – as well as public concern over the issue and a looming political test of wills over raising the nation’s debt ceiling before the federal government defaults on its obligations to its creditors.
While economists and independent budget experts criticize both parties’ plans as thin on details, they said the parameters of the national debate are now taking shape.
The president, in a speech at George Washington University, called on Congress to agree to some variation of his plan by the end of June. He also accused Republicans of plotting to gut the “basic social compact” of entitlement programs such as Medicare, Medicaid and Social Security under the auspices of fiscal responsibility.
To hit his new deficit-reduction target of $4 trillion by 2023, Obama would raise $1 trillion in new tax revenue from wealthy individuals. He’d also end the Bush-era tax cuts for the top 2 percent of American earners – but not the middle class – at the end of next year.
Obama also suggested a “debt failsafe” mechanism to automatically trigger across-the-board spending cuts starting in 2014 if the projected ratio of debt to GDP is too high. It wouldn’t apply to Social Security, Medicare or programs for low-income Americans. The president has a short-term motive for proposing it: offering Republicans more of the fiscal controls they say they’d need before voting to raise the $14.3 trillion debt ceiling.
Obama didn’t call for any major changes to Medicare.
Instead, he anticipated efficiencies from last year’s health care overhaul, and proposed empowering an independent advisory board to act more aggressively than originally envisioned to bring down Medicare costs. He also said Medicare should be able to reduce spending on prescription drugs.
Obama also didn’t propose any reductions to Social Security benefits.
Overall, the president’s new proposal represents a tripling of deficit reduction over what he unveiled just weeks ago with his 2012 budget plan. That’s recognition that Republicans have made him vulnerable on criticism he’s not doing enough to contain the nation’s debt.
The Republican plan is expected to attract few if any Democrats’ votes Friday.