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President Obama proposes $3 trillion in long-term deficit reduction

September 19, 2011 12:00:00 AM PDT
President Barack Obama announced a long-term deficit reduction plan totaling over $3 trillion at the White House on Monday.

According to senior administration officials, the core of the president's plan totals just more than $2 trillion in deficit reduction over 10 years.

Obama will propose $1.5 trillion in new tax revenue and a repeal of Bush-era tax cuts for the wealthiest taxpayers.

Obama also wants nearly $250 billion in reduction in Medicare spending and $330 billion in cuts in other mandatory benefit programs.

The president is also counting on savings of $1 trillion from the withdrawal of troops from Iraq and Afghanistan.

In a defiant note, Obama made clear that he would veto any Medicare benefit cuts that aren't paired with tax increases on upper-income people.

"We can't just cut our way out of this hole," the president said. "I will not support any plan that puts all the burden for closing our deficit on ordinary Americans."

The president again cited Warren Buffet, the Omaha, Neb. billionaire, who supports increased taxes on the wealthy.

"Warren Buffet's secretary shouldn't pay a higher tax rate than Warren Buffet," Obama said.

It comes just days after House Speaker John Boehner ruled out tax increases to lower deficits.

"You know, we could get into this 'tax the rich, tax the rich,' but that is not the basis for America and it's not going to get our economy going again," Boehner said.

It also comes amid a clamor in Obama's own party to take a tougher stance against Republicans.

His plan served as a sharp counterpoint to Republican lawmakers, who have insisted that tax increases should play no part in taming the nation's escalating national debt. Obama's plan would end Bush-era tax cuts for top earners and would limit their deductions.

"It's only right we ask everyone to pay their fair share," Obama said from the Rose Garden at the White House. "This is not class warfare. It's math."

The deficit reduction plan represents an economic bookend to the $447 billion in tax cuts and new public works spending that Obama has proposed as a short-term measure to stimulate the economy and create jobs.

The Associated Press contributed to this story.

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