What we know so far is that Obama will propose about $4 trillion worth of deficit closing through a combo of entitlement reform, defence cuts, and tax hikes.
This speech comes a week after GOP Congressman Paul Ryan unveiled his big plan, which aimed to cut $4.4 trillion without tax cuts.
We’ll be covering LIVE. Refresh or click here for the latest.
Update 1:41: He was due to come on a few minutes ago, but is obviously running late. We’ll update once it starts.
Update 1:49: The Obama budget speech begins… He’s thanking.
This debate over budgets will affect everyone.
Historically, the country has been founded on free markets, but somethings the government must do. Setting up the point that we can’t slash spending like crazy.
Talking a lot about social safety net. Medicare, Social Security, etc. protect us. Those who have done best afford to give a little bit more.
The full speech is here.
It outlines four ways we’ll cut the debt:
- Holding the line on discretionary spending.
- Cut defence spending.
- Find ways to fundamentally reduce the cost of healthcare, not just passing passing costs to seniors.
- Eliminate the Bush tax cuts.
This is particularly interesting, in terms of how Obama will ding the rich:
My budget calls for limiting itemized deductions for the wealthiest 2% of Americans – a reform that would reduce the deficit by $320 billion over 10 years. But to reduce the deficit, I believe we should go further. That’s why I’m calling on Congress to reform our individual tax code so that it is fair and simple – so that the amount of taxes you pay isn’t determined by what kind of accountant you can afford. I believe reform should protect the middle class, promote economic growth, and build on the Fiscal Commission’s model of reducing tax expenditures so that there is enough savings to both lower rates and lower the deficit. And as I called for in the State of the Union, we should reform our corporate tax code as well, to make our businesses and our economy more competitive..
This is also interesting.
In the coming years, if the recovery speeds up and our economy grows faster than our current projections, we can make even greater progress than I have pledged here. But just to hold Washington – and me – accountable and make sure that the debt burden continues to decline, my plan includes a debt failsafe. If, by 2014, our debt is not projected to fall as a share of the economy – or if Congress has failed to act – my plan will require us to come together and make up the additional savings with more spending cuts and more spending reductions in the tax code. That should be an incentive for us to act boldly now, instead of kicking our problems further down the road.
Some more rhetorical flourish “Warren Buffett doesn’t need a tax cut.”
And the speech is over. Nobody will be convinced.