WASHINGTON--President Obama will put a $3 trillion deficit plan on the table Monday morning, with cuts in Medicare and Medicaid--programs sacred to Democrats--only to be supported if wealthy people pay more taxes--a proposal GOP House Speaker John Boehner already said he would not support.
UPDATE The pdf to an 80-page report with details of Obama's proposal is HERE. END UPDATE
The plan is Obama's first bid to the 12-member House/Senate deficit cutting "Supercommittee" which must come up with $1.2 trillion in deficit reductions by the end of November--or face automatic cuts neither Republicans not Democrats favor.
Senior administration officials, briefing Sunday night, said Obama is laying out his "vision" on Monday, not a plan designed as a compromise to get votes or a "Grand Bargain," a reference to the deal-making this summer between the White House and Congress over deficit reduction and raising the debt ceiling.
By offering his own plan, Obama is aiming to address critics in the House and Senate who have faulted him for not coming to Capitol Hill with proposals. Obama's change of strategy first came earlier this month, when he sent actual legislation--a $447 billion jobs bill--to Congress.
The officials said Obama will veto any bill that comes to him that reduces the deficit only through cuts of Medicare and other spending; it must also include wealthier people paying more, a theme Obama has been pounding in speeches for months.
The officials --who briefed on the condition their names not be used-- offered highlights of the package and "principles" Obama will announce from the White House at 10:30 a.m. est to pay down debt and deficit over time:
*The tax equity "principles" include the "Buffett Rule," named for billionaire investor Warren Buffett, who has been an ally of Obama since he ran for a Senate seat from Illinois. Buffett has long argued that its not fair that he pays less in taxes than his middle class workers. Obama will propose a new tax rate for $1 million plus earners.
*$1.5 trillion in tax increases. That money would come from allowing Bush-era tax cuts to expire ($800 billion), limiting high income deductions ($300 billion) and closing tax loopholes ($300 billion). Some of the loophole closers, the officials said will be cutting breaks for the oil and gas industry, ending carried interest and taxing corporate jets--proposals that have been rejected in the past year by Congress.
During a speech last week, Boehner said he was open to closing "tax loopholes" but ruled out backing any "Supercommittee" tax hikes. "Tax increases, however, are not a viable option for the Joint Committee," Boehner said.
*$1.1 trillion savings in drawing down troops from Iraq and Afghanistan.
*$248 billion reduction in Medicare spending. No beneficiary changes would come until 2017. While the senior administration officials--who briefed on the condition their names would not be used--said Obama would not propose raising the age for Medicare benefits they did not rule out "means testing" for Medicare, where wealthier seniors would pay more for services. At present Medicare beneficiaries pay the same, no matter their financial standing.
During summer negotiations with Congress, Obama had considered raising the Medicare age.
*$72 billion cut in Medicaid spending.
*$430 billion savings on interest payments.
Social Security would not be touched.