It’s on.
When President Obama delivered his speech at George Washington University yesterday he did more than outline his deficit reduction plan, he came out swinging. Going on the offensive, the nation’s chief executive made a clear contrast between his “framework for shared prosperity and shared responsibility” and the GOP’s 2012 budget assaulting “the basic social compact in America.”
Taking sharp jabs at the proposal that seeks to maintain Bush tax cuts and restructure safety-net programs like Medicaid and Medicare, the president asserted: “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill. That’s not a vision of the America I know.”
With a cool, crisp demeanor, Obama gave a 44-minute address that was part history lesson, part policy initiative, part mission statement and part stump speech. Yes, ladies and gentlemen, the 2012 presidential campaign has indeed started.
The president first outlined how a decade of Bush tax cuts further enriched wealthy individuals, eliminating budget surpluses and threatening the stability of our nation. He then proceeded to discuss how meeting national priorities today will “require us to choose a vision of the America we want to see five years, 10 years, 20 years down the road,” advocating industrial investment and innovation. Citing deep cuts in education, clean energy and transportation programs, Obama said the plan unveiled last week by House Budget Committee Chairman Rep. Paul Ryan (D-Wisconsin) “would lead to a fundamentally different America than the one we’ve known certainly in my lifetime.”
The two proposals are radically different. Obama advocates reducing the deficit — the difference between government outlays and income in a fiscal year — by $4 trillion over 12 years, with $3 trillion from spending cuts and $1 trillion from additional revenue. (Without changes to current law, budget deficits will total $7 trillion over the next decade, according to the Congressional Budget Office.) Moreover, additional savings of at least $200 billion and $100 billion would come from cuts in Medicare and Medicaid, respectively, over 10 years and an estimated $400 billion from defense spending by 2023. The president would also use a “debt failsafe trigger” to enact automatic spending cuts if deficits haven’t stabilized by 2014.
Obama’s overhaul of the tax system would eliminate tax breaks and loopholes and even lower some rates to generate $1 trillion in additional revenue. He’s now ready to duke it out with Congress over expiration of Bush-era tax cuts for individuals making $200,000 or more a year and couples making $250,000 or more. Making a clear veto threat, Obama declared: “We cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can’t afford it. And I refuse to renew them again.”
The Republican’s “Path to Prosperity” has a deficit reduction target of $5.8 trillion over 10 years. The measure seeks to repeal Obama’s crowning legislative achievement, the Affordable Care Act, and claims it would save $725 billion by repealing subsidies customers would have received to help buy health insurance. Medicare would be privatized with seniors purchasing a health care plan on an exchange. Republican proponents say the new system would bring down insurance costs due to increased competition while Democrats claim it would slash medical benefits. And Medicaid would receive a major overhaul resembling a block grant program in which state officials would be allowed to administer the program as they see fit.