President Barack Obama is backing a $3 trillion deficit reduction plan. How does he plan to cut that much money? Well, it is not necessarily a cut in spending.
Roughly half of the $3 trillion comes from higher taxes on the wealthiest Americans, another $1 trillion comes from the debt ceiling deal, which leaves about half a trillion. Where does that come from? Thankfully it does not come from Social Security, but it does come from Medicare starting in 2017, which leaves the problem for the next president if Obama ends up with eight years in office.
Of his new deficit reduction plan, Barack Obama said, "We can't just cut our way out of this hole. It's going to take a balanced approach. If we're going to make spending cutsÂ—many of which we wouldn't make if we weren't facing such large budget deficitsÂ—then it's only right that we ask everyone to pay their fair share." Of course, some people wonder what exactly is a fair share. What do you think it is?
The good news for most people is that the president said, "I will not support any plan that puts all the burden on ordinary Americans." Hopefully he does not fail on this point.
The scary thing is that something this important is being used as a political tool. The speech was basically Barack Obama's first campaign speech of 2012, and the Republicans are predictably saying that this not going to work and nobody is even getting close to a compromise. How can things keep going like this?
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