Barack Obama will release a plan on Monday calling for more than $3tn in deficit cuts over 10 years, with roughly half he savings coming from higher taxes on the wealthy and big corporations. Those ideas are part of a blueprint Obama will send for consideration by a congressional "super-committee" tasked with finding at least $1.2tn in savings over a decade. Here are the main points:
Tax increases
The plan would raise $1.5tn from changes to the US tax code. Of that, $800bn in savings would come from allowing George Bush's tax cuts for wealthy Americans to expire.
Another $700bn 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.
In a populist step designed to appeal to voters, Obama would require millionaires to pay higher taxes. He has called that idea the "Buffett rule" because it is based on a suggestion put forth by billionaire Warren Buffett, an ally of the president. Buffett has written that rich people like himself often pay less in tax than those who work for them because of tax-code loopholes.
The new taxes in particular have little or no chance of passing Congress as proposed. Republicans were already lining up against the president's tax proposal before they even knew the magnitude of what he intended to recommend.
The $1.5 trillion in tax revenue would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.
In addition to that, Obama has proposed a so-called "Buffet Rule," raising taxes on America's wealthiest citizens, which some pundits have called a populist move. However, what some are calling a populist move, House Budget Committee Chairman Paul Ryan derided as "class warfare."
"Class warfare might make for good politics, but it makes for bad economics," the Wisconsin Republican said on "Fox News Sunday."
By adding the tax revenue, about $580 billion in proposed mandatory spending cuts, the savings from troop withdrawals and $1 trillion in spending cuts already in place, the combined deficit reduction would total about $4 trillion over 120 years. The administration also identified $430 billion in savings from lower interest payment on the debt.
Obama backed away from proposing sweeping changes to Medicare, following the advice of fellow Democrats that it would only give political cover to a privatization plan supported by House Republicans that turned to be unpopular with older Americans.
Administration officials said 90 percent of the $248 billion in 10-year Medicare cuts would be squeezed from service providers. The plan does shift some additional costs to beneficiaries, but those changes would not start until 2017, and administration officials made clear as well that Obama would veto any Medicare cuts that aren't paired with tax increases on upper-income people.
The president's plan also called for cuts of $72 billion over ten years from Medicaid, the federal-state health care program for low-income people and the severely disabled. States, hospitals and advocates for the poor are expected to resist those.
Tax increases
The plan would raise $1.5tn from changes to the US tax code. Of that, $800bn in savings would come from allowing George Bush's tax cuts for wealthy Americans to expire.
Another $700bn 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.
In a populist step designed to appeal to voters, Obama would require millionaires to pay higher taxes. He has called that idea the "Buffett rule" because it is based on a suggestion put forth by billionaire Warren Buffett, an ally of the president. Buffett has written that rich people like himself often pay less in tax than those who work for them because of tax-code loopholes.
The new taxes in particular have little or no chance of passing Congress as proposed. Republicans were already lining up against the president's tax proposal before they even knew the magnitude of what he intended to recommend.
In addition to that, Obama has proposed a so-called "Buffet Rule," raising taxes on America's wealthiest citizens, which some pundits have called a populist move. However, what some are calling a populist move, House Budget Committee Chairman Paul Ryan derided as "class warfare."
"Class warfare might make for good politics, but it makes for bad economics," the Wisconsin Republican said on "Fox News Sunday."
By adding the tax revenue, about $580 billion in proposed mandatory spending cuts, the savings from troop withdrawals and $1 trillion in spending cuts already in place, the combined deficit reduction would total about $4 trillion over 120 years. The administration also identified $430 billion in savings from lower interest payment on the debt.
Obama backed away from proposing sweeping changes to Medicare, following the advice of fellow Democrats that it would only give political cover to a privatization plan supported by House Republicans that turned to be unpopular with older Americans.
Administration officials said 90 percent of the $248 billion in 10-year Medicare cuts would be squeezed from service providers. The plan does shift some additional costs to beneficiaries, but those changes would not start until 2017, and administration officials made clear as well that Obama would veto any Medicare cuts that aren't paired with tax increases on upper-income people.
The president's plan also called for cuts of $72 billion over ten years from Medicaid, the federal-state health care program for low-income people and the severely disabled. States, hospitals and advocates for the poor are expected to resist those.
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