President Obama pivots, eyes Medicare changes, tax increases

Date: Apr 13, 2011

President Obama pivots, eyes Medicare changes, tax increases

WASHINGTON -- Challenging Republican budget plans, President Barack Obama on Wednesday proposed lowering the nation's future deficits by $4 trillion over a dozen years through a blend of specific measures and vague objectives designed to lower spending in politically sensitive health care programs while also increasing taxes.

The president proposed reductions in the growth of Medicare spending, cuts in defense, an overhaul of the tax system to eliminate many loopholes enjoyed by individuals and corporations, and an end to Bush era tax cuts for wealthier Americans.

In a speech at George Washington University Wednesday, Obama drew sharp contrasts with a Republican plan that cuts about $5.8 trillion in spending over the next decade and which the White House says unfairly singles out middle-class taxpayers, older adults and the poor.

This new clash, just a week after the president announced he would seek re-election, ensures that the nation's fiscal health will be at the center of the 2012 presidential campaign. For the past two months, Obama has been arguing to protect his core spending priorities, including education and innovation. His turn to deficit reduction reflects the pressures he faces in a divided Congress and with a public increasingly anxious about the nation's debt, now exceeding $14 trillion.

To help enforce budget discipline, the president called for resurrecting a spending cap that would be triggered if the nation's debt did not stabilize and begin to decline by 2014. The cap would not apply to Social Security, low-income programs or Medicare benefits.

Even before the president spoke, Republicans were heaping scorn on any plan from the president that would increase taxes. At the same time, the president was risking liberal anger by seeking reductions on venerable Democratic programs like Medicare and Medicaid.

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