WASHINGTON — President Obama, jumping into a debt-reduction debate that will help define the rest of his term, will outline his ideas today for curbing the costs of Medicare and Medicaid and taking other steps to turn around the nation’s spending habits. Ahead of his effort, House Republicans warned they would not consider any plan that includes tax increases.
Obama will give congressional leaders of both parties a preview of his speech, scheduled for delivery at 1:30 p.m. EDT, during a private meeting at the White House this morning. The White House has refused to discuss details of the speech, but Obama is expected to call for a “balanced” approach of shared burdens that takes on entitlement programs, defense spending and taxes.
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The president’s move also is intended to serve as a counter to a major GOP proposal from Rep. Paul Ryan of Wisconsin.
Ryan’s plan – due for a House vote Friday – would seek to cut more than $5 trillion in spending over the next decade, built around a drastic reshaping of Medicare and other federal safety-net entitlement programs, and would lower the tax rate for the nation’s top payers.
“The point is that balance is essential,” Obama spokesman Jay Carney said.
“What is not acceptable in the president’s view – and we believe in the American people’s view – is a plan that achieves serious deficit reduction only by asking for sacrifice from the middle class, seniors, the disabled and the poor, and while providing substantial tax cuts to the very well off.”
In a divided Washington, where a budget standoff between Obama and House Republicans nearly led to a government shutdown last week, the broader debt debate now begins in earnest. It is expected to shape both the course of legislation and a presidential campaign that already has Obama seeking a second term.
Congress’ best hope for changes in entitlement programs probably rests with the six senators, three from each party, who have been trying for months to negotiate a compromise.
The senators hope to have recommendations ready soon, and the primary motivator, they believe, will be the forthcoming debate over raising the $14.3 trillion debt limit.
While the White House is discouraging any deal-making tied to that vote, saying it could set off a global economic crisis, the threat of fiscal conservatives withholding their support could serve as leverage to negotiate at least incremental spending cuts.
“It’s amazing how quickly things get done when people get their backs against the wall,” said Sen. Saxby Chambliss, R-Ga., co-leader of the group that is working on a compromise debt-reduction plan.
Sen. Susan Collins, R-Maine, a moderate who is not part of the so-called “Gang of Six,” said Obama needs to go beyond talking in broad strokes and to engage in specifics about what he wants and what he’s willing to accept. “The president needs to set out his own plan.”
Obama has renewed his call to end the Bush-era tax cuts for households earning over $250,000 a year or individuals earning above $200,000. The White House has insisted that every aspect of the government must be considered as part of a serious discussion on debt, including revenue, which tends to be Washington-speak for taxes.
“If the president begins the discussion by saying we must increase taxes on the American people – as his budget does – my response will be clear: Tax increases are unacceptable and a nonstarter,” House Speaker John Boehner, R-Ohio, said.
“We don’t have deficits because Americans are taxed too little. We have deficits because Washington spends too much.”
The top Senate Republican, Mitch McConnell of Kentucky, said Tuesday: “Hopefully the president will put forward a plan that doesn’t just pay lip service to the commitments we’ve made to seniors and the poor, but which acknowledges the unique problems that this generation and a rising generation of Americans face.”
The ballooning year-by-year deficit has pushed the national debt above a staggering $14 trillion.
The administration is clamoring for Congress to raise the government’s borrowing authority above $14.3 trillion to avoid a government default on its debt, but Republicans want spending cuts in return. That showdown helps sets the context for Obama’s speech.
– McClatchy Newspapers contributed to this report.
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