News / USA

Obama Unveils Deficit-Fighting Plan

President Barack Obama outlines his plan for cutting federal spending during an address at George Washington University in Washington, April 13, 2011
President Barack Obama outlines his plan for cutting federal spending during an address at George Washington University in Washington, April 13, 2011

In a major speech on fiscal policy in Washington, President Barack Obama has set goals of reducing deficits, and the more than $14 trillion national debt, over the next dozen years. Mr. Obama says getting the nation's fiscal house in order will require shared sacrifice.   

The speech came at a pivotal moment, with the country's debt and deficit spending at historic levels, and opposition Republicans challenging Mr. Obama to sharply reduce spending while not raising taxes.

Key points in the president's plan include a phased reduction of future deficits by $4 trillion over 12 years or less, and putting the national debt on a declining path as a share of the economy by the second half of this decade.

The plan envisions that Bush-era tax cuts for wealthy Americans would not be extended.  That keeps the president in conflict with Republicans, who have already labeled any steps resulting in higher taxes as a "non-starter."

Related video report by Kent Klein

Laying out what he described as a path to shared prosperity, Mr. Obama said his strategy would protect the most vulnerable in society while preserving investments needed for job creation and continuing economic recovery.

He warned of the consequences if no action is taken to address mounting debt. "By 2025, the amount of taxes we currently pay will only be enough to finance our health care programs - Medicare and Medicaid - Social Security, and the interest we owe on our debt.  That’s it.   Every other national priority : education, transportation, even national security, will have to be paid for with borrowed money," he said.

Even after the U.S. economy recovers, the president said it will remain on track to be spending more money than it takes in through this decade and beyond, requiring continuing borrowing from countries like China.

Mr. Obama's  proposals include a provision requiring mandatory across-the-board spending cuts if enough progress is not being made to stabilize and reduce the national debt by 2014.

The plan envisions hundreds of billions of dollars in savings from reforms in the government Medicare and Medicaid programs, reforms of the tax code, and defense spending.

A significant portion of the address was devoted to attacking the Republican budget plan for 2012, which proposes about $1 trillion more in deficit reductions over 10 years, with continuing tax breaks for the wealthy.

Mr. Obama called the Republican plan "deeply pessimistic" saying it would result in a fundamentally different America. "There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires.  And I don't think there is anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.  That is not a vision of the America I know," he said.

Republicans say their budget, which proposes major changes to Medicare and Medicaid, will do more to attack fiscal problems without penalizing what they call  "the main creators of jobs."  

In a written statement, Republican House Speaker John Boehner said the president failed to deliver a plan.

Republican budget chairman Representative Paul Ryan said, "What we got was a speech that was excessively partisan, dramatically inaccurate, and hopelessly inadequate to addressing our country's pressing fiscal challenges."

President Obama said he asked Republican and Democratic leaders to designate teams for negotiations to begin in May, to achieve deficit reduction legislation by the end of June.  Vice President Joe Biden will oversee that process.

The president said he does not expect any final agreement to look exactly like the plan he presented on Wednesday, but believes Americans expect leaders in Washington to compromise. "Though I’m sure the criticism of what I have said here today will be fierce in some quarters, and my critique of the House Republican approach has been strong, Americans deserve and will demand that we all bridge our differences, and find common ground," he said.

President Obama said that in the past presidents and both major parties in Congress had succeeded in reaching agreements on difficult issues, adding that he knows there are Republicans and Democrats who want to see what he called a "balanced approach" to deficit reduction.

You May Like

Video Russia’s Syrian Escalation Tests Obama’s Crisis Response

Critics once again question whether president has been slow to act on Syrian conflict, thus creating opening for powers like Russia More

Ancient African DNA Shows Mass Migration Back Into Africa

First genetic analysis of ancient human remains in Africa suggests massive migration from north around time of Egyptian empire More

NASA: Pluto Has Blue Sky

New photos also reveal the presence of water ice More

This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Hungary Criticized for Handling of Refugeesi
Henry Ridgwell
October 08, 2015 8:02 PM
Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs