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Details Of Obama's Debt Plan


President Obama this morning laid out a plan to cut more than three trillion additional dollars from the deficit through a combination of tax increases and spending cuts. In the Rose Garden this morning, Mr. Obama said his plan would jumpstart economic growth and job creation in the short term, while at the same time putting in place a long-term plan to bring the deficit under control.

BARACK OBAMA: This is how we can reduce spending: by scouring the budget for every dime of waste and inefficiency, by reforming government spending and by making modest adjustments to Medicare and Medicaid.

GREENE: Joining us to talk about the president's speech and the president's plan, NPR national political correspondent Mara Liasson. Good morning, Mara.

MARA LIASSON: Hello, David.

GREENE: So how does the president get to $3 trillion in deficit reduction?

LIASSON: Well, one - a little over $1 trillion comes from winding down the wars in Afghanistan and Iraq. One-point-five trillion dollars comes from taxes, 800 of that from letting the Bush tax cuts expire. And 700 billion of the $1.5 trillion in taxes - cuts comes from closing loopholes and raising taxes on the wealthiest Americans. Then he has another $430 billion in interest savings. And then he says the whole package is going to be more than four trillion, because don't forget, $1.2 trillion was already agreed to in the debt ceiling deal. So he's saying put it all together. You get the $4 trillion that all economists on both sides say is the right number to solve our long-term deficit problem.

GREENE: Four trillion. So, as we just heard the president say there in the clip that we played, he's willing to make modest adjustments to Medicare and Medicaid. But he has said that he'd veto any bill that doesn't also raise taxes on wealthy Americans. And we have Republicans who have said they won't raise a dime in taxes on anybody. Doesn't this speech really just leave us in the same stalemate?

LIASSON: We have two sides very far apart. But the other thing the president is doing is he's putting down a very specific plan, and he's been asked to do that. He's also putting down his platform for the 2012 elections. This is his economic plan. He believes there should be balance in deficit reduction. He says it's two times as many spending cuts to one portion of tax hikes.

GREENE: Well, really briefly, let's talk about one of his ideas to raise taxes on the wealthy. He calls it the Buffett Rule, named after billionaire investor Warren Buffett, who basically has said recently: Tax me more. Tax me more. How likely is that to be accepted by Congress?

LIASSON: Not likely at all. And that's not why he said it. He's laying down the gauntlet, here. He is saying that he believes that if we're going to reduce the deficit, it's not fair that middle-class Americans pay a higher federal tax rate - a higher percentage of their income in taxes - than wealthy people do. He said there should be basic fairness. He's going to run on this. The Republicans call it class warfare. He spent a lot of time in this speech very feisty, very energized, saying this just isn't fair. Why should someone earning $50,000 a year, a teacher or a construction worker, pay more in income taxes - more in federal taxes - than a billionaire? He says this isn't class warfare. It's math.

GREENE: NPR's national political correspondent Mara Liasson, speaking to us about the president's speech this morning. Mara, thank you.

LIASSON: Thank you. Transcript provided by NPR, Copyright NPR.