Obama to Outline Deficit Reduction Proposal

Posted April 10, 2011 at 11:20am

Updated: 1:05 p.m.

With a government shutdown averted, President Barack Obama will pivot to a broader fiscal outlook this week by detailing a spending reduction plan that would address politically popular entitlement programs, a senior White House adviser said Sunday.

Obama is “going to be clear about the type of deficit reduction we need in terms of dollar amounts, over what period of years,” David Plouffe said on CNN’s “State of the Union” in one of several morning news show appearances that he made Sunday. “He believes we need significant deficit reduction in the coming years, and that’s what he’s going to speak to this week.”

The president’s plan will be offered as a response to a fiscal 2012 budget proposal that House Republicans unveiled last week. House Budget Chairman Paul Ryan (R-Wis.) put forth a proposal Tuesday that would include drastic cuts and alterations in Medicare and Medicaid.

Future fights over the next fiscal year’s budget, as well as whether to raise the debt limit this spring, are expected to dwarf the recent dispute over this fiscal year’s spending. Obama and Congressional leaders agreed Friday to $38 billion in budget cuts for fiscal 2011, and Congress cleared a weeklong spending stopgap early Saturday morning to avert a government shutdown and give lawmakers time to consider and vote on the compromise plan. The compromise does not include a number of policy changes sought by Republicans, including eliminating federal funding for family planning programs.

The president will outline his deficit reduction plan in a speech this week, possibly Wednesday or Thursday. Although Plouffe did not offer details Sunday, he said Obama will discuss proposals for Medicare and Medicaid and address the long-term viability of Social Security.

“You are going to have to look at savings you might be able to get in Medicare and Medicaid in the long term,” Plouffe said on “State of the Union.” He added that while Social Security is “not a short-term contributor” to the deficit, “we ought to look if there is a way to strengthen Social Security in the long term that doesn’t endanger anybody, you know, who’s a current beneficiary and doesn’t slash benefits.”

The president believes in a “balanced approach” that includes federal investment in such areas as education and research, Plouffe said.

“We need to take a scalpel, not a machete,” he added. “We need to take a balanced approach to this that allows us to win back the future.”

The president’s plan would also look at defense spending and revenues, including reconsidering existing tax cuts for wealthier people.

Republican leaders expressed skepticism about Obama’s seriousness.

“For the last two months, we’ve had to bring the president kicking and screaming to the table to cut spending,” House Majority Leader Eric Cantor said on “Fox News Sunday.”

The Virginia Republican also questioned why the president would raise the issue of ending tax cuts on the wealthy after signing legislation in December that extended tax cuts for top income earners that were enacted under President George W. Bush.

“So in my opinion it’s really hard to believe what this White House and the president is saying,” Cantor said.

Republicans also said they would push for budget reform and more debt reductions as part of the debate over raising the debt limit, although Obama has said he wants a vote on a “clean” bill on raising the ceiling, without other provisions attached.

“No one wants America to default on its debt,” House Republican Conference Chairman Jeb Hensarling (Texas) said on “State of the Union.” But the government will have to find a way “to cut up the credit cards” as part of the debt ceiling discussion, he added.

On NBC’s “Meet the Press,” Ryan said, “You will need real fiscal reform” as part of any debt ceiling legislation.

Senate Budget ranking member Jeff Sessions outlined some examples Sunday on CBS’ “Face the Nation.”

“You could have a two-year budget, for example, instead of one. I think that would help. We can put statutory caps on spending. We can have a balanced-budget constitutional amendment that failed by one vote about a decade ago,” the Alabama Republican said. “So I think there are a number of serious things of that nature that we must confront. And the president just can’t waltz in and say we’re going to have a debt crisis if you don’t raise the debt limit, Congress, and we’re not going to have any changes and I’m not going to support any changes. He’s going to have to meet Congress halfway — really, the American people halfway.”

Without concessions from the president, Sessions said, Congress won’t vote to raise the debt limit. In a statement Sunday afternoon, Sessions called on Obama to resubmit his fiscal 2012 budget proposal with the specifics of the deficit reduction plan he is to outline in his speech this week.

“Today’s announcement that the President will deliver an address this week on deficit reduction is an apparent recognition that the budget plan he submitted to Congress, as required by law, fails to address our dire fiscal challenges,” Sessions said in the statement. “However, it will not be sufficient for the President to simply make a speech. … The President’s vision, whatever it is, must be presented in a detailed, concrete form.”

Plouffe did not rule out a debt ceiling legislation that included fiscal riders. “Those are specifics we’re going to get into down the road,” he said on CNN.

But “we should not play brinkmanship with the full faith and credit of the United States,” he said on “Fox News Sunday.”

Ryan also defended his fiscal 2012 budget proposals against criticism from Democrats and health care advocacy groups. His plan would create a block grant system for Medicaid that would be carried out by the states and give seniors on Medicare a fixed amount of federal money they could use for private insurance. Critics say these proposals would result in substantial increased costs for the people enrolled in the health care programs.

But Ryan said on “Meet the Press” that his plan was intended to “repair the safety net” for the programs and make them “more sustainable.”