WASHINGTON – Our nation’s capital is abuzz with debates over a new debt plan proposed by President Barack Obama. The plan calls for $1.5 trillion in new taxes, part of a 10-year deficit reduction package totaling more than $3 trillion. President Obama says, “We can’t just cut our way out of this hole.”
The new proposal would strike hard on upper income taxpayers, but would also reduce spending in mandatory benefit programs, which include Medicare and Medicaid, by $580 billion. The third large portion of the $3 trillion cut would come from the $1 trillion saved over 10 years from the withdrawal of troops from Iraq and Afghanistan.
Republican lawmakers, including Utah’s own Senator Orrin Hatch, are refuting the proposal, saying the president’s political rhetoric is hurting the nation’s ability to effectively work through this problem. “The president doesn’t get it,” Hatch said. “Last week, he gave America another stimulus that his own party won’t support. Now, he’s rolling out massive tax hikes that his own party has already rejected.”
The deficit reduction plan outlines an economic bookend to the $447 billion in tax cuts and new public works spending that Obama has proposed as a short-term measure to stimulate the economy and create jobs. The plan serves as a sharp opposite to Republican lawmakers, who have insisted that tax increases should not have any part in taming the nation’s out-of-control debt.
“It’s only right we ask everyone to pay their fair share,” Obama said from the Rose Garden at the White House.
“Crass class warfare, a refusal to reform our broken entitlements, and tax hike on job creators isn’t a solution to Washington’s spending problem and won’t help our ailing economy or the 14 million Americans who are out of work.” Senator Hatch stated.
Administration officials say that Obama’s $1.5 trillion in new taxes is a goal that Congress could achieve through a broad overhaul of the tax code. They said the president’s specific proposals represent one way to get to that goal under the existing tax code.
Teamed with the nearly $1 trillion in cuts already approved by Congress and signed by the president, overall deficit reduction would total more than $4 trillion, a number that many economists cite as a minimum threshold to bring the nation’s debt under control.