From NBC's Athena Jones
President Barack Obama called on both parties Wednesday to work together "to restore the fiscal responsibility that served us so well in the 1990s," as he laid out his own vision for how to tackle the nation's long-term fiscal challenges.
During a roughly 50-minute speech at George Washington University, Obama offered what he termed a "balanced approach" to getting the deficit under control by keeping domestic spending low, cutting defense spending, reducing excess health care spending, and reforming the tax code. The president's plan would reduce the deficit by $4 trillion over "12 years or less."
"Any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget," Obama said. "A serious plan doesn't require us to balance our budget overnight - in fact, economists think that with the economy just starting to grow again, we need a phased-in approach - but it does require tough decisions and support from our leaders in both parties now."
Total outstanding US debt stands at about $14.2 trillion, according to the Treasury Department, while the non-partisan Congressional Budget Office estimates the deficit for FY2011 alone will reach some $1.5 trillion.
While the president has frequently sprinkled his speeches with references to the need to reduce America's growing deficit -- often mentioning that it's one he inherited when he took office -- he has rarely devoted this much time at one event to laying out the steps he is willing to take.
The fight over how to bring the deficit under control is likely to play out during the battles over the FY2012 budget and raising the nation's debt limit. Administration officials are hoping today's speech will help show deficit-minded voters the president is serious about putting the nation on a firmer fiscal footing, while continuing to invest in areas like education, infrastructure and research and development that will help accelerate economic growth, create jobs and help the country compete on the global stage.
"We have to live within our means, we have to reduce our deficit, and we have to get back on a path that will allow us to pay down our debt," the president said. "And we have to do it in a way that protects the recovery, and protects the investments we need to grow, create jobs, and win the future."
* Proposals and reaction
Obama's proposal builds off of the deficit reduction measures included in his 2012 budget and borrows from the recommendations of the fiscal commission he created. The plan would cut non-security discretionary spending by $770 billion by 2023, reduce defense spending by $400 billion, reduce health care spending by $480 billion over that period and an additional $1 trillion over the subsequent decade, lower Medicaid spending by at least $100 billion and Medicare spending by at least $200 billion over 10 years. Obama also wants to see $360 billion in spending reductions for mandatory programs like agricultural subsidies, federal pension insurance and anti-fraud measures by 2023.
He has proposed a "debt failsafe" that he said would hold him -- and Washington -- accountable for failing to reach the goals he is setting. The plan would include a trigger that would require across-the-board spending reductions if, by 2014, the national debt is not projected to fall as a share of the economy.
The president said little on Social Security, which he does not believe is in crisis, arguing only that there should be a bipartisan effort to strengthen the costly entitlement program.
The speech was short on specifics on how to achieve the proposed cuts -- in fact one senior administration official conceded on a conference call before the speech that the White House was "putting forward a framework and we're not trying to lock down every detail."
Still, the president made a point of drawing a distinction between his approach and the one proposed by Congressman Paul Ryan, the Wisconsin Republican whose plan for cutting $4.4 trillion from the deficit the White House believes favors the wealthy at the expense of seniors, the disabled and the poor.
Obama said Ryan's plan had been championed by House Republicans and "embraced by several of their party's presidential candidates" -- a notable reference to the upcoming 2012 campaign -- and said the congressman deserved credit for putting one forward. But he argued the plan's cuts to clean energy, education and transportation and the changes it would make to Medicare and Medicaid would result in a "fundamentally different" nation than the one Americans have known throughout most of the country's history.
"This vision is less about reducing the deficit than it is about changing the basic social compact in America," the president said of the Republican budget. "I don't think there's anything courageous about asking for sacrifice from those who can least afford it."
The president has also proposed allowing the Bush-era tax rates for the wealthy -- couples making more than $250,000 and individuals making $200,000 -- to expire -- a move Republicans have already said they oppose. The president tried to end those tax breaks last year to fulfill a promise he made during the presidential campaign, but was stymied. In today's speech, he said he would "refuse" to renew those cuts again.
Obama and Vice President Biden briefed a bipartisan group of lawmakers on the plan this morning, including House Speaker John Boehner (R-OH), Minority Leader Nancy Pelosi (D-CA), Representatives Eric Cantor (R-VA) and Steny Hoyer (D-MD), Senate Majority Leader Harry Reid (D-NV), Minority Leader Mitch McConnell (R-KY) and Senators Dick Durbin (D-IL) and Jon Kyl (R-AZ). The president has asked Boehner, Reid, Pelosi and McConnell to each designate four members of their caucuses to participate in negotiations on a legislative framework for deficit reduction. The discussions would be led by Biden and would begin early next month.
As part of their pre-buttal to Obama's speech, the Republican National Committee released a video of the president underperforming at various sports from basketball to bowling to golf, while calling for him to engage in an "adult conversation."
Other responses to Obama's proposals were more serious, with Boehner releasing a statement after the speech in support of Ryan's proposals and sounding a familiar GOP refrain against tax increases.
“To reduce the economic uncertainty hanging over American job creators we must demonstrate that we’re willing to take action.” Boehner’s release said in part.” And any plan that starts with job-destroying tax hikes is a non-starter. We need to grow our economy – not our government – by creating a better environment for private sector job growth. That’s why Republicans are fighting for meaningful spending cuts and fighting against any tax increases on American small businesses.”