By Jennifer Eder
President Barack Obama announced his deficit reduction plan Wednesday at the George Washington University, calling for a mix of tax increases for the wealthiest Americans and spending cuts that would lower the federal deficit by $4 trillion over the next 12 years.
During a 43-minute speech in the Jack Morton Auditorium, President Obama outlined his plan for reducing the nation’s debt while continuing to support economic recovery and protect entitlement programs such as Medicare and Medicaid.
“We have to live within our means, reduce our deficit and get back on a path that will allow us to pay down our debt. 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,” said President Obama.
Before a packed auditorium, President Obama thanked GW President Steven Knapp and told GW students it was great to be back on campus. The president held a town hall meeting at the Marvin Center last fall leading up to the midterm elections.
“I want you to know that one of the reasons I kept the government open was so I could be here today with all of you. I wanted to make sure you had one more excuse to skip class. You’re welcome,” President Obama joked.
Under President Obama’s plan, Bush-era tax cuts on families making more than $250,000 a year would be abolished and itemized deductions would be limited.
“We cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. I say that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate can afford to pay a little more. I don’t need another tax cut. Warren Buffett doesn’t need another tax cut. Not if we have to pay for it by making seniors pay more for Medicare. Or by cutting kids from Head Start. Or by taking away scholarships,” said President Obama. “That’s not right, and that’s not going to happen as long as I’m president.”
President Obama’s plan also calls for a reform to the nation’s individual tax code so that “the amount of taxes you pay isn’t determined by what kind of accountant you can afford.”
President Obama was accompanied to GW by Vice President Joe Biden; Treasury Secretary Timothy Geithner; Jacob Lew, director of the Office of Management and Budget ;Gene Sperling, director of the White House National Economic Council; Rep. Paul Ryan (R-Wis.); Rep. Jan Schakowsky (D-Ill.); Rep Jeb Hensarling (R-Texas); Rep. Dave Camp (R-Mich.); and both co-chairs of the President’s Fiscal Commission: Alan Simpson, former Republican Wyoming senator, and Erskine Bowles, former chief of staff to President Bill Clinton.
By piggybacking on the reforms made in the president’s health care bill that the White House says will reduce the deficit by $1 trillion, President Obama’s plan seeks to reduce health care spending even further by getting generic prescription drugs on the market faster, giving incentive for doctors and hospitals to prevent injuries and improve results and requiring more accountability for Medicaid – a move he argues will save $480 billion by 2023 and an additional $1 trillion in the following decade.
President Obama criticized the plan brought forth by House Republicans last week calling it “deeply pessimistic” and arguing that it aims to lower the deficit by increasing seniors’ health costs by $6,400 annually starting in 2022, cutting federal Medicaid spending by one-third by the end of the decade and increasing the number of uninsured Americans by 50 million.
“The fact is, their vision is less about reducing the deficit than it is about changing the basic social compact in America,” President Obama said as he promised to preserve both Medicare and Medicaid. “I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry. I will not tell families with children who have disabilities that they have to fend for themselves. We will reform these programs, but we will not abandon the fundamental commitment this country has kept for generations.”
Jason Lifton, Student Association president, and Sally Nuamah, a GW senior in the Columbian College of Arts and Sciences, had the opportunity to meet the president and vice president before his speech.
“Meeting President Obama and Vice President Biden was one of the highlights of my time at GW. Today was a great example of why people come to GW. I could have taken political science classes anywhere in the world, but this is my education beyond the walls of the classroom,” Mr. Lifton said. “The chance to meet both of them in a small setting was something that I’ll remember for the rest of my life.”
In addition to health care and tax reforms, President Obama called for reductions in the country’s defense and domestic budgets.
Included in the president’s proposal is a “debt fail safe” mechanism that would require Congress to make further cuts if the nation’s deficit has not decreased significantly by 2014.
President Obama also announced that beginning in May, Vice President Biden will meet with leaders in both political parties to hash out a bipartisan deficit reduction plan by the end of June.
“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. A serious plan doesn’t require us to balance our budget overnight…but it does require tough decisions and support from leaders in both parties,” President Obama said. “And above all, it will require us to choose a vision of the America we want to see in five and 10 and 20 years down the road.”