Thursday, September 18, 2014
Inquirer Daily News

Obama: Keep Medicare, cut Pentagon, restore millionaire tax rates

Highlights of President Obama's budget proposal

Obama: Keep Medicare, cut Pentagon, restore millionaire tax rates

Outline of Obama's budget plan here. Excerpts from Obama's speech:

"Most Americans tend to dislike government spending in the abstract, but they like the stuff it buys... A strong military... education and medical research... Social Security and Medicare... Almost no one believes they should be paying higher taxes...

"So here’s the truth.  Around two-thirds of our budget is spent on Medicare, Medicaid, Social Security, and national security.  Programs like unemployment insurance, student loans, veterans’ benefits, and tax credits for working families take up another 20%.  What’s left, after interest on the debt, is just 12 percent... for all of our other national priorities like education and clean energy; medical research and transportation; food safety and keeping our air and water clean... Cuts to that 12% alone won’t solve the problem...

"Republicans in the House of Representatives (have) a plan that aims to reduce our deficit by $4 trillion over the next ten years... A 70% cut to clean energy.  A 25% cut in education.  A 30% cut in transportation.  Cuts in college Pell Grants...

"These are the kind of cuts that tell us... if our roads crumble and our bridges collapse, we can’t afford to fix them... We are presented with a vision that says the United States of America – the greatest nation on Earth – can’t afford any of this... (GOP plan also) ends Medicare as we know it... It says... up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit... Grandparents... Kids with autism... These are the Americans we’d be telling to fend for themselves.       

"Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy... That’s who needs to pay less taxes... That’s not right, and it’s not going to happen as long as I’m President...

"The first step in our approach is to keep annual domestic spending low by building on the savings that both parties agreed to last week...

"The second step in our approach is to find additional savings in our defense budget... As the Chairman of the Joint Chiefs, Admiral Mullen, has said, the greatest long-term threat to America’s national security is America’s debt... We need... a fundamental review of America’s missions, capabilities, and our role in a changing world...

"The third step in our approach is to further reduce health care spending... We will cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market.  We will work with governors of both parties to demand more efficiency and accountability from Medicaid.  We will change the way we pay for health care – not by procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results...

"We believe the reforms we’ve proposed to strengthen Medicare and Medicaid will enable us to keep these commitments to our citizens while saving us $500 billion by 2023, and an additional one trillion dollars in the decade after that.  And if we’re wrong, and Medicare costs rise faster than we expect, this approach will give the independent commission the authority to make additional savings by further improving Medicare...

"While Social Security is not the cause of our deficit, it faces real long-term challenges in a country that is growing older... We must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market...

"We cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society.  And I refuse to renew them again.

"Beyond that, the tax code is also loaded up with spending on things like itemized deductions.  And while I agree with the goals of many of these deductions, like homeownership or charitable giving, we cannot ignore the fact that they provide millionaires an average tax break of $75,000...  My budget calls for limiting itemized deductions for the wealthiest 2% of Americans – a reform that would reduce the deficit by $320 billion over ten years...

"I’m calling on Congress to reform our individual tax code so that it is fair and simple – so that the amount of taxes you pay isn’t determined by what kind of accountant you can afford... (also) our corporate tax code...

"If, by 2014, our debt is not projected to fall as a share of the economy – or if Congress has failed to act – my plan will require us to come together and make up the additional savings with more spending cuts ... instead of kicking our problems further down the road."  

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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