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Obama: Cut spending, raise taxes on the wealthy

By David Espo

Associated Press

Published: Wednesday, April 13 2011 3:30 p.m. MDT

President Barack Obama outlines his fiscal policy during an address at George Washington University in Washington, Wednesday, April 13, 2011.

Charles Dharapak, Associated Press

WASHINGTON — President Barack Obama coupled a call for $4 trillion in long-term deficit reductions with a blistering attack on Republican plans for taxes, Medicare and Medicaid on Wednesday, laying down markers for a roiling debate in Congress and the 2012 presidential campaign to come.

Obama said spending cuts and higher taxes alike must be part of any deficit-reduction plan, including an end to Bush-era tax cuts for the wealthy. He proposed an unspecified "debt failsafe" that would go into effect if Congress failed to make sure the national debt would be falling by 2014 relative to the overall economy.

"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," the president said in a speech at George Washington University a few blocks from the White House. "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."

Obama's speech was salted with calls for bipartisanship, but it also bristled with attacks on Republicans. They want to "end Medicare as we know it," he said, and to extend tax cuts for the wealthy while demanding 33 million seniors pay more for health care.

"That's not right, and it's not going to happen as long as I am president," he vowed.

Obama spoke to an audience that included Rep. Paul Ryan, R-Wis., author of the House Republican budget that drew repeated presidential scorn. The Budget Committee chairman later told reporters he had been excited to receive an invitation to the speech, believing the administration was extending an olive branch.

"Instead, what we got was a speech that was excessively partisan, dramatically inaccurate and hopelessly inadequate to addressing our country's pressing fiscal challenges," Ryan said. "What we heard today was not fiscal leadership from our commander in chief. What we heard today was a political broadside from our campaigner in chief."

Speaker John Boehner noted that the administration has asked Congress to raise the debt limit, but said, "the American people will not stand for that unless it is accompanied by serious action to reduce our deficit. More promises, hollow targets and Washington commissions simply won't get the job done."

The president spoke less than a week after he reached a compromise with Boehner on an unprecedented package of $38 billion in spending cuts for this year just in time to avoid a partial government shutdown. Both houses of Congress are expected to pass the measure in the next 24 hours or so, closing the books on the current budget year and clearing the way for a far more defining debate about the size and shape of the government.

Obama stepped to the podium at a juncture when tea party-backed Republicans are relishing early victories in the House, the 2012 Republican presidential field is just beginning to take shape and moderate Democratic lawmakers are charting their re-election campaigns in swing seats. His emphasis on deficit reduction marked an appeal to independents as well as other voters who are eager to stem record annual deficits as well as a national debt that is over $13 trillion.

At the same time, he sought to keep faith with liberals and other supporters.

To opponents of revisions in Medicare, Medicaid or Social Security, he said, "I guarantee that if we don't make any changes at all, we won't be able to keep our commitments to a retiring generation that will live longer and face higher health care costs than those who came before."

Of $4 trillion in cuts, Obama said $2 trillion should come from spending, $1 trillion from taxes, including ending Bush-era tax breaks for the wealthy, and the rest recouped from lower interest payments on the national debt.

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