Obama announces debt plan built on taxes on the rich

WASHINGTON (AP) — In a blunt rejoinder to congressional Republicans, President Barack Obama called for $1.5 trillion in new taxes today, part of a total 10-year deficit reduction package totaling more than $3 trillion.

He vowed to veto any deficit-reduction package that cuts benefits to Medicare recipients but does not raise taxes on the wealthy and big corporations.

"We can't just cut our way out of this hole," the president said.

The president's proposal would predominantly hit upper income taxpayers but would also reduce spending in mandatory benefit programs, including Medicare and Medicaid, by $580 billion. It also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.

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.

And it gives the president a voice in a process that will be dominated by a joint congressional committee charged with recommending deficit reductions of up to $1.5 trillion.

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