Five things to know about Obama's deficit plan
President Obama this morning outlines a deficit-reduction plan that his economists say would reduce anticipated federal budget deficits by about $4 trillion over the next decade.
As NPR's Scott Horsley said earlier today on Morning Edition, the president and his aides will make the case that he's put together a "balanced" plan of cuts in expected spending and increases in tax revenues. "Balanced," says Scott, is a code word for a plan that includes tax increases — in this case, on the wealthy.
The president is due to officially unveil the plan at 10:30 a.m. ET.
As we wait for him to speak, here are five things to know about what he's going to propose:
1 — Which Is It? $4 Trillion Or $3 Trillion? As they report about what the president's going to say, some news outlets are saying the president will have a plan for saving $4 trillion over the next decade, while others are saying it's a $3 trillion package.
Which is it?
Both (sort of).
Officially, the president's statement will be about what he's recommending to the Joint Committee on Deficit Reduction — the bi-partisan "super committee" of senators and representatives. It's been charged with finding $1.2 trillion in additional budget savings (above the $1 trillion agreed to last month) over the next decade.
As Scott reported, most economists say that $1.2 trillion just isn't enough to make serious progress toward getting the government's accounts in order. So, the president is going to pitch a plan that he says includes and expands on the $1 trillion that's already been agreed to, and adds up to just more than $4 trillion.
2 — Increased Tax Revenues (Translation: Higher Taxes) Account For About Half: If you look at the $3 trillion in projected deficit reduction that the president says his plan would achieve over the next decade (above and beyond the $1 trillion already agreed to), then about $1.5 trillion is expected to come from higher taxes. The president proposes:
Repealing the so-called Bush tax cuts for couples making more than $250,000 a year.
A "Buffett rule" that would, as Bloomberg News writes, "require taxpayers with [annual] incomes of $1 million or more pay at least the same percentage in taxes as middle-income Americans." It gets its name from billionaire investment whiz Warren Buffett, who has said he and other super-wealthy folks should pay more in taxes.
3 — What About "Entitlements?" "The plan includes no changes in Social Security and does not include an increase in the Medicare eligibility age, which the president had considered this summer," The Associated Press reports.
4 — The Cuts: According to senior administration officials, the AP says, the plan includes "nearly $250 billion in reductions in Medicare spending, $330 billion in cuts in other mandatory benefit programs, and savings of $1 trillion from the withdrawal of troops from Iraq and Afghanistan."
5 — Its Chances: Lawmakers just went through a bruising political battle over the deficit and the government nearly went into default as they argued over what to do. What are the chances that this plan — something of a "grand bargain" that could anger liberals and conservatives — will fare any better?
"If the left digs in and says you can't touch Medicare" and other entitlement programs and "the right digs in and says you can't raise taxes ... it's going to be a long and unproductive 14 months" between now and the November 2012 elections, Scott says.