Obama proposes $3 trillion in spending cuts

President Obama is proposing $3 trillion in new revenues from a combination of cuts and taxes. Part of his plan is the newly coined "Buffett Rule" that will raise taxes on those earning more than $1 million. 

WASHINGTON, D.C. (Catholic Online) - The goal of the plan is to reduce the deficit by $3 trillion over the next decade. 

As president Obama prepares for his 2012 reelection, he is recognizing that he must make concessions to the conservative right, especially the fiscal conservatives, while staying in favor with his base. He has been widely criticized for overspending and for being too weak on many high-profile political issues. His new proposal will address some of those concerns, or so it promises.

The new plan also will not include any changes to Medicare or Social Security benefits.
Obama is insisting the savings will come from taxes and cuts, so much so that he is threatening to veto any debt reduction legislation that does not increase taxes on the wealthy. "I will not support any plan that puts all the burden on ordinary Americans," he said. This hard-line stance will surely galvanize republican resistance. 

Obama introduced the "Buffett Rule," named after Warren Buffett who recently chided Congress for "coddling billionaires," and asked that Congress start taxing them more. The rule will ensure that those earning more than $1 million will have to pay a greater percent of their income in federal taxes than Americans who pay taxes in lower brackets. 

Republicans are already pledging resistance, saying they don't want to raise anyone's taxes. 
Mandatory spending cuts comprise about $580 billion of the proposal. Almost half, $288 billion will come from cuts in Medicare, particularly from reducing overpayments. The proposal does not make any Medicare changes until 2017. An additional $72 billion will come from Medicaid and other health programs. Billions more would come from farm cuts in subsidies federal worker benefit programs, and from what the administration calls, "restructuring government operations and reducing government liabilities."

After the cuts comes the new revenue. Allowing some of the Bush-era tax cuts to expire is projected to bring $800 billion in revenues. An additional $300 billion would come from closure of what the administration deems are various tax loopholes.

Future savings are factored into the proposal and comprise almost half of the total deficit reduction. The president is proposing a savings of $1.1 trillion from reducing spending in Iraq and Afghanistan over the next decade. The remaining $430 billion is expected to come from interest savings on the debt. 

Obama's proposal is unlikely to be passed in its entirety. Some parts, if proposed piecemeal may have a better chance. Republicans have already vowed that they will oppose any plan that increases taxes for anybody, regardless of income. Ultimately, the plan is mostly rhetoric, designed to give Obama a stronger platform for 2012 and to address the scathing criticism over this last three years in office. 

But in what is becoming a common theme of the current administration, the promises are big, but the deliveries are much smaller. 

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