U.S. President Barack Obama will announce his recommendations Monday to reduce the federal budget deficit. The proposal calls for $1.5 trillion in new tax revenue, including a new minimum tax rate for individuals earning more than $1 million a year.
Media reports are calling the plan the “Buffett Rule,” named after billionaire investor Warren Buffett, who has pointed out that he and other super-rich Americans pay lower effective tax rates than middle-income workers.
Senior Obama administration officials say the deficit reduction plan includes more than $1.1 trillion savings in military spending as American troops withdraw from Iraq and Afghanistan.
The president is making the proposal after announcing a $447 billion job-creation plan designed to reduce the United States 9.1 percent unemployment rate.
Both proposals are facing an uphill struggle in Congress. The Republican Party, which controls the House of Representatives, remains opposed to any tax increases. House Speaker John Boehner has suggested instead a broad overhaul of the U.S. tax code and cuts in government pension and health care programs, such as Social Security and Medicare.
Other Republican leaders say the so-called Buffett Rule will diminish corporate investment and limit growth in a struggling U.S. economy.
The president's efforts come in an increasing charged partisan atmosphere, with a general election 14 months away, and a special Congressional committee beginning its work on finding ways to reduce the budget deficit.
Political analysts say the president's plan has little chance of passing unchanged, but is meant to draw contrasts between Mr. Obama and Republicans. Republicans are already calling the tax plan “class warfare.”
The Obama plan includes a provision to assist the financially strapped U.S. Postal Service. The plan will include no changes to Social Security and no change to Medicare age requirements.
Public approval ratings for both President Obama and Congress have been plummeting, adding increasing pressure on both sides to work together on ways to revive the economy and reduce the deficit.
