Monday, September 19, 2011

Fiscal fight looms on Obama's deficit reduction plan

Half of $3 trillion reduction in higher taxes

Washington – A $3 trillion deficit-reduction plan scheduled for a White House announcement this morning will almost certainly take shape as another chapter in the epic Congressional battle over taxes and spending.

President Barack Obama seeks to finance the reduction by increasing taxes by $1.5 trillion through a combination of higher assessments on the wealthiest of Americans while closing corporate tax loopholes.

The plan will go directly to the twelve-member House-Senate negotiating committee.

If a deal on the 10-year plan is not struck by Dec. 23, spending cuts will likely take place across the board.

Attached to the President's deficit-reduction plan is the guarantee that he will veto any proposed legislation which contains only spending cuts and no tax increases.

House Speaker John Boehner will surely marshal his forces to oppose the President's plan, according to lesser lights observing on Capitol Hill.

Along with $1.5 million in increased tax revenue, the plan includes $580 billion in adjustments to health and entitlement programs, inlcuidng $248 billion to Medicare and $72 billion to Medicaid.

The proposal also includes $1.1 trillion to be realized from the end of the American combat mission in Iraq and the withdrawal of forces from Afghanistan as a savings to be applied against the deficit.

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