President to draw sharp contrast with GOP plans on taxes, spending
By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — President Barack Obama will open a new debate over government spending and debt on Wednesday when he delivers a speech outlining his deficit-reduction plans that will be closely watched by skeptical Republicans and anxious liberals alike.
In an early afternoon speech in Washington, Obama is expected to propose cutting Medicare and other entitlements as well as allowing tax breaks on wealthy earners to expire as part of a plan to rein in the gaping U.S. budget deficit.
In an effort to preempt criticism of his speech, Obama is giving bipartisan congressional leaders including House Speaker John Boehner a preview at the White House on Wednesday morning.
Boehner didn’t wait for the meeting to slam part of Obama’s agenda, however. On Tuesday, Boehner said tax hikes would be “unacceptable” and a “nonstarter” for deficit-reduction.
The White House predicts that this year’s deficit will hit $1.65 trillion. The speech also comes as the clock is quickly ticking toward the U.S. hitting its $14.3 trillion borrowing limit. Republicans have demanded that a “yes” vote on raising the debt ceiling be tied to deficit reduction — and Obama’s Wednesday speech will give his political opponents plenty to chew on.
Obama’s and Republicans’ competing ideas will set the political tone through the 2012 elections. Republicans have proposed lowering taxes for individuals and corporations, want to privatize Medicare and squeeze billions of dollars from Medicaid by turning it over to the states to administer.
It was unclear on Wednesday morning how much Obama would discuss changes to Social Security in his speech, to be given at George Washington University.
Obama is risking the ire of liberal groups by proposing changes to entitlements. A coalition of 300 mostly liberal-leaning groups urged Obama in a letter on Tuesday to exclude Social Security from any discussion of the deficit, The Wall Street Journal reported. And the Progressive Change Campaign Committee is running a campaign to push back against Medicare and Medicaid cuts.
“President Obama, if you cut Medicare and Medicaid, don’t ask for my help in 2012,” reads a message on the group’s website.
Obama’s speech came less than a week after Democrats and the White House stuck a deal to avert a government shutdown by cutting nearly $39 billion from current spending. Some Republicans complain that the deal cuts too little and plan to vote against it in the House of Representatives on Thursday.
Obama is expected to include in his speech some elements of a plan endorsed last year by former Republican Sen. Alan Simpson and former Clinton White House chief of staff Erskine Bowles.
Many of Republicans’ debt-reduction ideas are contained in a plan to be voted on later this week in the House. Unveiled last week by House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, the GOP’s fiscal 2012 plan cuts $6.2 trillion from government spending over the next decade. That’s more than $5 trillion beyond what Obama proposed in his fiscal 2012 budget plan back in February.
Republicans disparaged Obama’s 2012 plan for not tackling Medicare, Medicaid and Social Security. Republicans also said Obama’s 2012 budget goal of cutting the deficit by $1 trillion over 10 years wasn’t nearly enough.
Potential Republican presidential candidates, meanwhile, are attacking Obama’s policies in the run up to the 2012 campaign. Former Massachusetts Gov. Mitt Romney said on Monday that the president has failed on the job and touted his own record as a businessman and governor. Among other things, Romney called for “fiscal discipline” in Washington in a video announcing he’d opened a presidential exploratory committee. Read more on Political Watch blog.
