President Obama announced $3 trillion worth of deficit reduction recommendations, which includes enough savings to offset the costs of his jobs bill, the American Jobs Act. The Joint Select Committee on Deficit Reduction, also known as the "super committee," is currently tasked with finding up to $1.5 trillion in savings, but the President is calling on the committee to make deeper deficit reductions.
President Obama's proposal consists mostly of reforming the tax code to raise taxes on the wealthy and closing "loopholes" on corporate taxes, which would raise revenue by $1.5 trillion. It also includes winding down the wars in Iraq and Afghanistan and making "modest adjustments" to the government's Medicare and Medicaid health insurance programs.
The plan includes allowing the Bush-era tax cuts to expire and closing tax "loopholes" for corporations. In his speech in the Rose Garden, Pres. Obama said the U.S. has the highest corporate tax rate in the world but is "riddled with exceptions," which forces some businesses to carry a heavier burden, he said.
From the President’s plan: “The President is calling on the Congress to undertake comprehensive tax reform that meets five key principles: 1) lowers tax rates, 2) ends inefficient tax breaks, 3) cuts the deficit by $1.5 trillion, 4) increases job creation and growth in the United States, and 5) observes the Buffett Rule that people making over $1 million should not pay lower taxes than those in the middle class.”
Republicans immediately dismissed the President's plan, which is heavily focused on raising taxes for the wealthy. “Pitting one group of Americans against another is not leadership," House Speaker John Boehner said about the President's plan.
"This is not class warfare, it’s math," the President said about his plan. He said Congress has to prioritize because it cannot afford both current tax rates for the wealthy and funding for education, for example.
Treasury Secretary Timothy Geithner and White House Budget Director Jack Lew briefed the press on the President's proposal at the daily White House briefing.
Later today, the President heads to New York for meetings and to prepare for his remarks to the UN General Assembly on Wednesday.
House Speaker John Boehner (R-OH) offered his own jobs creation proposal during a speech last Thursday. Dean Baker, Co-Director of the Center for Economic & Policy Research and James Sherk, Labor Economics Senior Policy Analyst at the Heritage Foundation, joined the Washington Journal this morning to assess the Boehner plan.