Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

No strategy and a beige suit

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 29 August 2014

Read more

ENCORE!

Alain Choquette: A Hilarious Magician in Paris

Read more

FOCUS

France welcomes Iraqi Christian refugees

Read more

FRANCE IN FOCUS

Emmanuel Macron: A new economy minister with a pro-business agenda

Read more

THE OBSERVERS

More of this year's best Observers stories

Read more

#TECH 24

Changing the world, one video game at a time

Read more

IN THE PAPERS

Socialist Party summer conference kicks off in explosive atmosphere

Read more

  • US aid drops begin in besieged Iraqi town of Amerli

    Read more

  • EU leaders choose Tusk and Mogherini for top jobs, discuss Russia sanctions

    Read more

  • Opposition protesters clash with Pakistani police outside PM's house

    Read more

  • Austerity row overshadows French Socialist’s annual rally

    Read more

  • Egypt sentences Brotherhood leader Badie to life

    Read more

  • Ceasfire allows Gaza families to relax on the beach

    Read more

  • S. Africa condemns 'military coup' in Lesotho

    Read more

  • Kerry calls for 'coalition of nations' to battle IS militants

    Read more

  • Ukrainian plane with seven on board crashes in Algeria

    Read more

  • Exclusive: Fabius warns Russia of more sanctions

    Read more

  • IMF backs Lagarde amid French corruption probe

    Read more

  • Ebola drug ‘ZMapp’ heals all monkeys in study

    Read more

  • British killer escapes from French psychiatric hospital

    Read more

  • Police hunt for British boy with brain tumour taken to France

    Read more

  • Ukraine to relaunch NATO membership bid

    Read more

  • Suriname leader’s son pleads guilty to courting Hezbollah

    Read more

  • Mapping Ukraine: Canada and Russia in ‘tweet for tat’ row

    Read more

Americas

Obama unveils plan to slash deficit and boost growth

Text by News Wires

Latest update : 2011-09-19

US President Barack Obama has called for higher taxes on companies and the wealthy as part of his plan to cut the deficit by some $3 trillion over the next decade, setting the stage for a showdown with Republicans in Congress.

REUTERS - President Barack Obama on Monday laid out a $3 trillion plan to cut U.S. deficits by raising taxes on the rich, but Republicans mocked it as a political stunt, signaling the proposal has little chance of becoming law.

Vowing to veto any cuts to Medicare unless Congress hikes taxes on companies and the wealthy, the Democratic president's recommendations set the stage for an ideological fight with Republicans that will stretch through Election Day 2012.

"I will not support any plan that puts all the burden on closing our deficit on ordinary Americans," Obama said. "We are not going to have a one-sided deal that hurts the folks who are most vulnerable."

With polls showing most Americans unhappy with his economic leadership, Obama's re-election hopes could hinge on his ability to convince voters that Republicans represent the rich, not the middle class. That was the main theme of his remarks on Monday, in which he repeatedly said all Americans must pay their "fair share" of taxes.

Republicans have consistently opposed any measures resembling tax hikes, saying they will hurt the struggling U.S. economy by increasing the burden on job-creating businesses.

"Veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth," said Republican Senate leader Mitch McConnell.

Obama's speech underscored a more aggressive approach to defend Democratic principles after two budget fights earlier this year in which he ended up compromising with Republicans and suffering criticism for doing so from his liberal base.

"This is purely politics, aimed at Obama's demoralized base. It undoubtedly has been poll-tested, so now Obama has a populist campaign issue. There's obviously no chance this could pass (on a vote in Congress)," said Greg Valliere, chief political strategist at consultancy Potomac Research Group.

Super committee

Obama's plan proposes $3 trillion in savings over the next decade with roughly half of those savings coming from higher tax revenues.

His recommendations will go to a congressional "super committee" charged with finding deficit savings of at least $1.2 trillion by Nov. 23. Congress must then vote on the panel's proposal by Dec. 23 or automatic spending cuts will be triggered across government agencies, beginning in 2013.

Investors want evidence that Washington's political leaders are capable of tackling the towering U.S. deficit and the country's mounting debts, after ratings agency Standard & Poor's cut the U.S. AAA rating in August. Agencies have threatened fresh action if Washington fails to produce a credible plan for addressing long-term debt.

Obama's plan does not raise the eligibility age for Medicare recipients, something he proposed during debt ceiling negotiations with House Speaker John Boehner over the summer.

Instead, he is proposing something more palatable to the left -- $248 billion in Medicare savings, the bulk of which will come from reducing overpayments to health care providers.

Medicare and Medicaid are viewed by analysts as the biggest contributors to long-term U.S. deficits, which voters see as a key issue in the election. The U.S. budget deficit in 2011 is expected to be about $1.3 trillion.

 

 

Date created : 2011-09-19

  • USA

    Obama jobs bill set to be next Washington showdown

    Read more

  • FINANCE

    Should governments tax the rich to get out of debt?

    Read more

COMMENT(S)