WASHINGTON â€” President Obama called for reducing the federal deficit by $4 trillion in the next decade through a package that includes tax reform, further cuts in domestic and defense spending, and shoring up of federal entitlements, setting the stage for a spirited debate with Republicans.
After days of build-up, Obama used a major speech at George Washington University to expand on the proposals in his 2012 budget and State of the Union message, leaning on recommendations from his deficit commission in setting the goal of cutting $4 trillion from the federal deficit by 2023.
Obama called his a â€œbalanced approach,â€ one that makes difficult choices but does so fairly.
â€œWe donâ€™t have to choose between a future of spiraling debt and one where we forfeit investments in our people and our country,â€ he said. â€œTo meet our fiscal challenge, we will need to make reforms. We will all need to make sacrifices. But we do not have to sacrifice the America we believe in. And as long as Iâ€™m president, we wonâ€™t.â€
Before detailing his vision, Obama offered a long wind-up detailing how America got to this point.
â€œAfter Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed,â€ he said. Pointing to policies of his predecessor, he said that â€œif we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.â€
But deficits have continued to grow under Obamaâ€™s watch, which he attributed to a dire economy that is now in recovery.
A preliminary analysis of Obamaâ€™s original 2012 budget by the Congressional Budget Office forecast the deficit to shrink to $1.2 trillion in 2012, from $1.43 trillion in 2011. It projects a combined $9.5 trillion in deficits by 2021, which Obama would aim to cut through nearly equal savings from discretionary and mandatory cuts, tax reform and savings in interest paid to the national debt.
Included in his plan is a so-called â€œdebt fail-safeâ€ trigger that would require across-the-board spending reductions â€” with some exceptions â€” if the nationâ€™s debt continued to rise in proportion to the overall size of the economy.
After reaching agreement with Republicans to cut $38 billion from federal spending through 2011, Obama proposed new reductions to discretionary and defense spending in the next decade, and finding nearly half a trillion in savings to healthcare by building on reforms in his health plan adopted last year.