Obama offers $3 trillion debt plan
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China.org.cn, September 20, 2011
US President Barack Obama Monday laid out a US$3.6 trillion plan to cut US budget deficits partly by raising taxes on the rich.
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On Sep. 19, US President Barack Obama laid out a US$3.6 trillion plan to cut US budget deficits partly by raising taxes on the rich. |
However, Republicans rejected it as a political stunt and made clear the proposal has little chance of becoming law, China Daily reported Tuesday.
Obama said "I will not support any plan that puts all the burden of closing our deficit on ordinary Americans … We are not going to have a one-sided deal that hurts the folks who are most vulnerable."
His speech reflected a more aggressive defense of Democratic principles after he took a battering in two previous budget battles with Republicans this year that helped drive his approval rating to new lows.
Republicans have consistently opposed any measures resembling tax hikes, saying they will hurt the struggling economy by increasing the burden on job-creating businesses.
"Veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth," said Republican Senate leader Mitch McConnell.
John Boehner, speaker of the House of Representatives and the top Republican in Congress, said Obama failed to offer a "serious" recommendation to the special bipartisan congressional committee tasked with finding at least US$1.2 trillion in savings.
He said "pitting one group of Americans against another is not leadership."
Analysts were skeptical Obama's plan would help America's standing with credit rating agencies such as Standard & Poor's.
Last month S&P downgraded US government debt and expressed concern that Washington was too divided to tackle its mountain of debt, China Daily reported.
Obama's plan, which will be sent to the "super committee" of six Republicans and six Democrats considering deficit reduction, proposes US$3 trillion in savings over 10 years.
These include cuts to Medicare spending aimed mainly at healthcare providers, particularly big drug companies, and some hospital stocks fell sharply on Wall Street on Monday.
But roughly half of overall savings come from higher tax revenues, under the president's proposal.
Obama's call to overhaul the US tax code included a "Buffett Rule," named after billionaire investor Warren Buffett, that would set a minimum tax rate for people earning more than $1 million a year.
The tax would only apply to a tiny minority of the millions of Americans who file tax returns, but White House aides said it would set a standard of fairness.
Most Americans say they are unhappy with Obama's economic leadership, and the president's re-election hopes could hinge on his ability to convince voters that Republicans represent the rich, not the middle class, according to China Daily.
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