President Barack Obama will unveil plans on Monday to reduce the massive US deficit by about $3.6 trillion over the next 10 years, with about half of the savings expected to come from higher taxes on the wealthy and big corporations.
US president will unveil the new proposals at the White House and they will be submitted to a congressional “super-committee” that was created in August to draw up a deficit-reduction plan. The massive cuts plan will reach some important points such as:
Obama’s plans would include roughly $1.5 trillion in tax increases aimed mainly at wealthy Americans and corporations, people familiar with the proposal said. It isn’t fair to those living at or below their means who are saving receipts, researching tax credits, and using every possible tax calculator available, while the wealthy barely have to lift a finger. The president is set to unveil a “Buffett tax” aimed at those earning $1 million or more a year and named after billionaire investor Warren Buffett, a persistent critic of low tax rates for the rich.
$800 billion in savings would come from allowing George Bush’s tax cuts for wealthy Americans to expire.
Another $700 billion would come from ridding the tax code of special breaks. Obama has proposed limiting deductions for higher-income households and eliminating breaks for oil and gas companies and firms that purchase corporate jets.
Barack Obama’s plan would avoid large-scale cuts in big middle-class entitlement programs such as the social security retirement program and the Medicare health plan for older Americans.
The cuts plan includes $248 billion in savings from the Medicare health program. Many of the cuts would come from reduced payments to health providers. US president will also recommend roughly another $330 billion in savings from other entitlement programs.
Administration officials said Barack Obama will pledge to veto any plan to cut benefits for Medicare recipients unless the wealthy and big corporations are required to pay their “fair share” of taxes.
The plan would not raise the age at which retirees become eligible for Medicare benefits.
Barack Obama also will not propose any changes to social security.
Iraq and Afghanistan wars
The plan assumes $1.1 trillion in savings from winding down the war in Iraq and moving ahead with planned troop reductions from Afghanistan. Critics are likely to label this element of the plan a “gimmick” because it does not represent new policy but instead reflects drawdowns of US forces that have already been announced.
The plan assumes $430 billion in savings on interest payments following the cuts elsewhere in the budget.