Photo: AP Photo/Kevin Lamarque, POOL
President Barack Obama will ask the Super Committee to double its mandate and cut $3 trillion from the federal deficit, according to White House officials, with half of the savings coming from tax increases on corporations the wealthy.Republicans have already rejected a central component of the plan — the so-called “Buffett Rule,” which would set a minimum tax rate for those with incomes over $1 million. This tax increase goes well above and beyond the approximately $800 billion agreed to by Speaker of the House John Boehner in the failed “grand bargain” negotiations over the debt ceiling.
Rep. Paul Ryan called the tax increase “class warfare,” saying it would hurt small businesses and pledging that GOP lawmakers would rally against it.
The White House, wary of raising taxes as the economy recovers, has insisted that the tax increases would not take effect until 2013.
In his speech tomorrow, Obama will also outline reforms to Medicare, but will not call for raising the eligibility age for the entitlement program. The plan will also avoid touching Social Security — which has become a major issue among the GOP presidential candidates.
Republicans, including Speaker of the House John Boehner, have called on the bipartisan committee of 12 lawmakers to exceed their statutory mandate — but only through spending cuts, or at most, closing corporate loopholes and lowering the tax rate.
The $1.1 trillion in savings from ending the wars in Iraq and Afghanistan has been criticised by Republicans as being a fictitious number — since the wars were never going to continue indefinitely. With that figure excluded, the plan cuts just over $2 trillion, with about 75 per cent coming from tax increases.
Obama’s plan is essentially dead on arrival in Congress, and combined with his jobs bill, is almost certain to set off months of partisan wrangling over government spending.
The deficit plan by the numbers:
- $1.5 trillion from tax reform/increases$800B from eliminating Bush tax cuts for wealthy $400B from ending deductions for the wealthy $300B from ending some corporate deductions
- $800B from eliminating Bush tax cuts for wealthy
- $400B from ending deductions for the wealthy
- $300B from ending some corporate deductions
- $1.1 trillion from the end of the wars in Iraq and Afghanistan
- $580 billion in non-defence mandatory spending$248 billion from Medicare $72 billion from Medicaid
- $248 billion from Medicare
- $72 billion from Medicaid
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