U.S. President Barack Obama announced his deficit reduction plan Monday, but congressional Republicans quickly rejected the proposal.
In a White House speech, Mr. Obama called on all Americans, including the wealthy and corporations, to pay a “fair share” of the cost of government. He threatened to veto any proposal that cut medical care for the elderly unless it also raises taxes on the wealthy. Mr. Obama declared, “This is not class warfare. It's math.”
The Speaker of the House of Representatives, Republican John Boehner, says the president's plan pits one group of Americans against another. Republicans have said higher taxes hurt investment and economic growth. They want deficit reduction to come entirely by cutting spending, including the cost of pension and health care programs for the elderly and poor, called Social Security and Medicare.
President Obama proposed higher taxes on the wealthy, cuts in some social programs and less military spending in a package intended to reduce the huge U.S. debt by another $3 trillion over 10 years.
The president proposed $1.5 trillion in taxes, including a provision that some individuals earning more than $1 million a year no longer be allowed to pay taxes at a lower rate than middle-income Americans. He also calls for allowing Bush era tax cuts to expire by the end of 2012, which would end certain tax cuts for families making more than $250,000 a year.
Mr. Obama also says he can eventually save $1 trillion by bringing American troops home from Iraq and Afghanistan.
The president's plan cuts some social spending, but does not change Social Security or raise the age at which Americans can sign up for Medicare.
The president's proposal is in addition to a $447 billion job-creation plan designed to cut the 9.1 percent unemployment rate.
He outlined his deficit reduction package as a special Congressional committee begins working out ways to reduce the huge budget deficit and debt.
U.S. economic woes have led to congressional approval ratings to drop into the low teens while President Obama's approval rating hovers near 40 percent.
