WASHINGTON: President Barack Obama unveiled a politically risky plan to reduce the US deficit by $4 trillion over 12 years by cutting health care and defense while raising some taxes. Obama's proposal Wednesday set the stage for the ideological and political fight that is sure to dominate the 2012 presidential and congressional campaign. Under Obama's plan, three quarters of the deficit reduction would come from spending cuts, including lower interest payments as the debt eases. One quarter, or $1 trillion, would come from additional tax revenue. “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,” he said in a speech at George Washington University. Even before Obama's speech announcing his proposal, Republicans argued that it didn't go far enough to reduce a debt that has reached $14 trillion. They also oppose any tax increases. “If we're going to resolve our differences and do something meaningful, raising taxes will not be part of that,” said Republican House Speaker John Boehner. Obama and the Democrats have similarly rejected a Republican proposal which would reduce spending by $5.8 trillion over the next decade, largely through cuts in health care programs for the elderly and the poor. And it would cut taxes for corporations and the wealthy. Prospects are dim for the quick passage of either proposal. While the Republicans are likely to win approval for their plan in the House of Representatives, where they have a majority, the Democratic-led Senate would reject it. For all his tough talk, Obama called for both parties to work with him and strike a deficit cutting compromise. He asked party leaders to name negotiating teams and set a June deadline for an agreement. Still, both parties are taking big political gambles. Obama needs to keep the support of the liberal Democratic base, which opposes cuts to social programs, while demonstrating to independent, moderate voters – who often determine the outcome of elections – that he is serious about reducing the deficit. Republicans have made spending cuts a core issue. They won control of the House last year largely on the strength of the ultraconservative tea party movement, which favors a smaller role for government and sharply reduced spending. But Republicans are walking into a political minefield by proposing an overhaul of Medicare, the health insurance program for the elderly. Millions of beneficiaries living on fixed income depend on the program and fear any changes. Older Americans turn out more for elections than younger ones do.
