Obama to lay out plan to cut $4 trillion from deficit

President Obama, seeking to reframe the debate after a budget battle driven by spending cuts, will lay out a plan to reduce the federal deficit by $4 trillion in the next decade during a speech in Washington on Wednesday.

As the Republican-controlled House prepares to vote on both the 2011 budget compromise and its own austere 2012 proposal, which calls for major changes to entitlement programs, Obama will set out what the White House says will be a "balanced approach" to deficit reduction while pledging to maintain investments he says are needed to keep the economy strong.

“The president will make clear that while we all share the goal of reducing our deficit and putting our nation back on a fiscally responsible path, his vision is one where we can live within our means without putting burdens on the middle class and seniors or impeding our ability to invest in our future,” a White House official said in previewing the speech, set for 1:30 p.m. at the George Washington University.

It is unclear just how specific the president's speech will be. The official described four broad steps guiding Obama’s approach: keeping domestic spending low, trimming the defense budget, reducing excess healthcare spending “while strengthening Medicare and Medicaid,” and reforming the tax code.

The latter two points will be the biggest dividing lines between the president and Republicans. The 2012 proposal offered by Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, eventually seeks to privatize Medicare and hand Medicaid over to states. Obama also seeks to raise taxes for higher earners – which Republicans say is a non-starter.

The White House says Obama’s speech will lean on his own 2012 budget and “borrow from” recommendations from the bipartisan fiscal commission he assembled last year.

Before the speech, Obama is to huddle with congressional leaders to share details. House Majority Leader Eric Cantor (R-Va.), one of the expected participants, said the “gesture is appreciated” and he looks forward to hearing the full plan.

“We need to get specific here, because for the last two months this White House has refused to really engage in the debate,” he told MSNBC’s “Morning Joe” on Wednesday. “When he gave the State of the Union, the president was calling for more investment, and just freezing spending -- basically no cuts. And what we’re seeing now is, hopefully, the willingness for this president and the White House to enter the debate, put a plan on the table.”

A new Gallup poll released Wednesday found that 62% of Americans supported the budget agreement reached late Friday and that a majority viewed it as a victory for neither party. Looking ahead, 59% of Americans say they would support raising taxes for families with incomes of $250,000 or more, while 37% would oppose it.

Respondents were split on further cuts to domestic spending – 45% said they supported “significant additional cuts,”, and 47% would oppose them. And only 13% of those surveyed backed a complete overhaul of Medicare; 18% would support major changes. A combined 61% said they would back only minor changes or none at all.

The survey of 1,004 adults was conducted Monday; it has a margin of error of plus or minus 4%.


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