Full Text September 19, 2011: President Barack Obama Unveils $4 Trillion Economic Growth & Deficit Reduction Plan — $3 Trillion Deficit Cuts in Over 10 Years — $1.5 Trillion in New Taxes



President Obama announces his Plan for Economic Growth and Deficit Reduction

President Barack Obama delivers a statement announcing his Plan for Economic Growth and Deficit Reduction, in the Rose Garden of the White House, Sept. 19, 2011.(Official White House Photo by Pete Souza)


The President’s Plan for Economic Growth and Deficit Reduction

Source: WH, 9-19-11

President Obama’s Plan for Economic Growth and Deficit Reduction — Full Text — PDF

The health of our economy depends on what we do right now to create the conditions where businesses can hire and middle-class families can feel a basic measure of economic security. In the long run, our prosperity also depends on our ability to pay down the massive debt the federal government has accumulated over the past decade. Today, the President sent to the Joint Committee his plan to jumpstart economic growth and job creation now – and to lay the foundation for it to continue for years to come.

The President’s Plan for Economic Growth and Deficit Reduction lives up to a simple idea: as a Nation, we can live within our means while still making the investments we need to prosper – from a jobs bill that is needed right now to long-term investments in education, innovation, and infrastructure. It follows a balanced approach: asking everyone to do their part, so no one has to bear all the burden.  And it says that everyone – including millionaires and billionaires – has to pay their fair share.

Overall, it pays for the American Jobs Act and produces net savings of more than $3 trillion over the next decade, on top of the roughly $1 trillion in spending cuts that the President already signed into law in the Budget Control Act – for a total savings of more than $4 trillion over the next decade. This would bring the country to a place, by 2017, where current spending is no longer adding to our debt, debt is falling as a share of the economy, and deficits are at a sustainable level.

Now, let me review some of its main components.

First, the plan includes the American Jobs Act – a set of ideas supported by both Democrats and Republicans that will put people back to work and put more money in the pockets of working Americans. It’s imperative that we pass this bill now both to get the economy moving again and creating jobs at the pace we need it, and to help with deficit reduction since a growing economy is a vital part to reducing our deficits and debt.

Second, the plan lays out a way to live within our means so that we can invest in the things that will power economic growth for decades to come: education, innovation, clean energy, and infrastructure. To do this, it follows a balanced approach to deficit reduction by drawing from across the Budget for savings and by asking everyone to pay their fair share.

Specifically, the President is proposing approximately $580 billion in cuts and reforms to a wide range of mandatory programs from cuts to agricultural subsidies that are no longer necessary to reform of the Pension Benefit Guaranty Corporation and modest changes to federal civilian worker retirement and health benefits for military retirees.

In health care programs, the President is recommending a series of reforms that builds on the historic savings and reforms in the Affordable Care Act to strengthen Medicare and Medicaid so that these vital programs are robust and healthy to serve Americans for years to come.

These proposals will save $248 billion in Medicare and $72 billion in Medicaid and other health programs over 10 years, and extend the life of the Medicare Trust Fund by three years. This is accomplished in a way that does not shift risks unfairly onto the individuals they serve; slash benefits; or undermine the fundamental compact they represent to our Nation’s seniors, people with disabilities, and low-income families. Any savings that affect beneficiaries do not begin until 2017 and do not affect middle-income and current beneficiaries. Other health and Medicaid savings amount to $72 billion, and because of the structural nature of these reforms to both programs, health savings grow to over $1 trillion in the second decade. Moreover, as he said today, the President will veto any bill that takes one dime from the Medicare benefits seniors rely on without asking the wealthiest Americans and biggest corporations to pay their fair share.

The President’s plan reflects the Administration’s current policy of drawing down our troop presence in Afghanistan and the transition from a military to a civilian-led mission in Iraq for a savings of $1 trillion.

Finally, the President calls on the Committee to undertake comprehensive tax reform and lays out five key principles. Reform should: 1) lower tax rates; 2) cut wasteful loopholes and tax breaks; 3) reduce the deficit by $1.5 trillion; 4) boost job creation and growth; and 5) comport with the “Buffett Rule” that people making more than $1 million a year should not pay a smaller share of their income in taxes than middle-class families pay.

To advance this debate, the President is offering a detailed set of specific tax loophole closers and measures to broaden the tax base that, together with the expiration of the high-income tax cuts, would be more than sufficient to hit the $1.5 trillion target for additional revenue. These measures include cutting tax preferences for high-income households, eliminating tax breaks for oil and gas companies, closing the carried interest loophole for investment fund managers, and eliminating benefits for those who own corporate jets.

We have little doubt that some of these proposals will not be popular with many of those who benefit from these affected programs and currently enjoy special tax breaks. These are tough choices that we had to make — and some of these changes we are only putting forward to address our fiscal situation. But we are all in this together, and all of us must contribute to getting our economy moving again and on a firm fiscal footing.

If we don’t take a balanced approach to deficit reduction that includes asking the wealthiest 2 percent of families and big corporations to pay their fair share, then everyone else must shoulder the load. That could mean drastic cuts to things like education, research and development, infrastructure, and food safety; and could mean severe cuts to Medicare that would burden seniors with thousands of dollars in out-of-pocket costs.

Second, if we do nothing, our economy will not get the jolt it needs now and it will be weighed down by our debt or years to come. If we don’t take these steps now, it will only get harder.

I’ve been working on these issues for three decades, and I can tell you that making these changes in this plan will require some tough choices. Everyone will have a cut or a new policy that they do not like – or wish that they could avoid. But remember: the challenge we face is one that we all face – together – as Americans. We are in this together, and the only way that we can have a balanced approach is that we all do our part.

So read the plan, and join the debate about how we can jumpstart our economy, reduce our deficit, and win the future.

President Obama: Washington Has to Live within its Means

Source: WH, 9-19-11

President Obama today unveiled a plan for economic growth and deficit reduction that details how to pay for the American Jobs Act while also paying down our debt over time. The plan, which is being sent to the Congressional Joint Committee on Deficit Reduction, offers a balanced approach to further reduce our nation’s deficit and get our fiscal house in order, based on the values of shared responsibility and shared sacrifice.

The President’s plan lays out a blueprint that will enable Washington to live within its means, something Americans across the country have been doing for years. And the balanced approach means that no one group has to bear the burden alone. It means that everyone – including millionaires and billionaires – has to pay their fair share.

The plan, which will reduce the deficit by $4 trillion, includes many of the proposals the President has previously discussed — closing tax loopholes for oil companies and hedge fund managers and asking the very wealthiest and special interests to pay their fair share. It also includes difficult spending cuts and making adjustments to strengthen programs like Medicare and Medicaid for future generations. As part of the plan, the President is also calling on Congress to undertake comprehensive tax reform to simplify the system, make it more fair and efficient, and lay a stronger foundation for economic growth:

It comes down to this: We have to prioritize. Both parties agree that we need to reduce the deficit by the same amount — by $4 trillion. So what choices are we going to make to reach that goal? Either we ask the wealthiest Americans to pay their fair share in taxes, or we’re going to have to ask seniors to pay more for Medicare. We can’t afford to do both.

Either we gut education and medical research, or we’ve got to reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies don’t get. We can’t afford to do both.

This is not class warfare. It’s math. The money is going to have to come from someplace. And if we’re not willing to ask those who’ve done extraordinarily well to help America close the deficit and we are trying to reach that same target of $4 trillion, then the logic, the math says everybody else has to do a whole lot more: We’ve got to put the entire burden on the middle class and the poor. We’ve got to scale back on the investments that have always helped our economy grow. We’ve got to settle for second-rate roads and second-rate bridges and second-rate airports, and schools that are crumbling.

That’s unacceptable to me. That’s unacceptable to the American people. And it will not happen on my watch. I will not support — I will not support — any plan that puts all the burden for closing our deficit on ordinary Americans. And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share. We are not going to have a one-sided deal that hurts the folks who are most vulnerable.

According to Jack Lew, Director of the Office of Management and Budget, taking the steps outlined in this plan would bring the country to a place, by 2017, where current spending is no longer adding to our debt, debt is falling as a share of the economy, and deficits are at a sustainable level.

You can read the entire proposal that was submitted to the Joint Committee or read an overview in this fact sheet


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