AS President Barack Obama announces about $2 trillion in deficit and long-term debt reduction measures today, White House officials have indicated that he is not expected to offer all the compromises he reached with House Speaker John Boehner, R-Ohio, in July on the issues before those talks broke off.
Overall, the president's proposal could help reduce United States (U.S.) long-term deficits by about $4 trillion, a report by Associated Press (AP) has stated.
Under a compromise in early August that averted a threatened government default, Congress agreed to cut nearly $1 trillion from some programmes.
The president's proposal would reduce deficits by an extra $2 trillion. On top of that, drawing down military forces in Afghanistan and Iraq is estimated to reduce projected deficits by $1 trillion over 10 years.
Republicans have ridiculed the war savings as gimmicky, but House Republicans included them in their budget proposal this year and Boehner had agreed to count them in his talks with Obama.
In addition to the new minimum tax rate for millionaires, Obama's proposal will include revenue increases that Obama has identified to pay for his $447 billion jobs plan. Those include limiting deductions for wealthier taxpayers, closing corporate loopholes and eliminating tax subsidies to oil and gas companies. Boehner last week ruled out many of the tax increases Obama has proposed.
However, AP, in its report yesterday, claimed that White House wants to keep the focus on jobs and is determined to avoid getting sucked into another budget fight with lawmakers.
The report asserted that administration officials see the task of attending to deficits as necessary but not necessarily urgent, compared with the need to revive the economy and increase employment.
The White House also sees this as the time to draw sharp contrasts with congressional Republicans, whose public approval ratings are lower than Obama's.
"I would view this as the president's vision for how we achieve deficit reduction, which makes it inherently different than the sorts of legislative negotiations we were undertaking with the Speaker over the summer," said the White House communications director, Dan Pfeiffer.
The plan represents 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. He's submitting it to a special joint committee of Congress given the task of recommending how to reduce deficits by $1.2 trillion to $1.5 trillion over 10 years.
The Guardian