Obama to offer proposal to reduce deficit

Associated Press

WASHINGTON

Even as President Barack Obama prepares his opening bid on long-term deficit reduction, the White House wants to keep the focus on jobs and is determined to avoid getting sucked into another budget fight with lawmakers.

Administration officials see the task of attending to deficits as necessary but not necessarily urgent, compared with the need to revive the economy and increase employment.

The White House also sees this as the time to draw sharp contrasts with congressional Republicans, whose public-approval ratings are lower than Obama’s.

As a result, when Obama announces at least $2 trillion in deficit-reduction measures today, he is not expected to offer all the compromises he reached with House Speaker John Boehner, R-Ohio, in July before those talks broke off.

The 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. He’s submitting it to a special joint committee of Congress given the task of recommending how to reduce deficits by $1.2 trillion to $1.5 trillion over 10 years.

The White House signaled its approach Saturday by highlighting a proposal in the president’s plan that would set a minimum tax rate for taxpayers earning more than $1 million.

The measure — Obama is going to call it the “Buffett Rule” for billionaire investor Warren Buffett — is designed to prevent millionaires from using tax- avoidance schemes to pay lower rates than middle-income taxpayers. Buffett has complained that he and other wealthy people have been “coddled long enough” and shouldn’t be paying a smaller share of their income in federal taxes than middle-class taxpayers.

However, the proposal is a certain dead-letter with Republicans, who have pledged to oppose any increase in taxes.

“It adds further instability to our system more uncertainty and it punishes job creation and those people who create jobs,” said GOP Rep. Paul Ryan of Wisconsin, the House Budget Committee chairman. “Class warfare may make for really good politics but it makes for rotten economics,” he told “Fox News Sunday.”