President Barack Obama will announce his deficit plan this Morning, which will include $1.5 trillion in new taxes for the wealthy and corporations.
Democrats are saying the plan cuts over $4 trillion — when the savings from the August debt deal and the wind-down of the wars in Iraq and Afghanistan are factored in. Of that, taxes would make up under 37 per cent of the total package.
The Republican counter-argument is that the debt deal is in the past, the war savings were never going to be spent, and the tax increases are unacceptable. By their accounting, Obama cuts just $580 billion in spending, while 75% of the plan comes from raising taxes on small business owners and other “job creators.”
Setting the stage for months of political arguments, Republicans are set to reject any plan that includes tax increases, while Obama is threatening a veto on any plan that asks Medicare beneficiaries to pay more without asking the wealthy to kick in their fair share.
The deficit plan by the numbers:
- $1.5 trillion from tax reform/increases (including the “Buffett Rule” minimum tax rate for incomes over $1 million)$800B from eliminating Bush tax cuts for wealthy $400B from ending deductions for the wealthy (including some charitable deductions) $300B from ending some corporate deductions
- $800B from eliminating Bush tax cuts for wealthy
- $400B from ending deductions for the wealthy (including some charitable deductions)
- $300B from ending some corporate deductions
- $580 billion in non-defence mandatory spending$248 billion from Medicare $72 billion from Medicaid
- $248 billion from Medicare
- $72 billion from Medicaid
- $1.1 trillion from the end of the wars in Iraq and Afghanistan
- $1.2 trillion saved from spending caps agreed to in the August debt ceiling deal
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