Balanced Approach - Obama Proposes New Taxes On Wealthy For Half Of Debt Plan - The Washington Post

Combined with his call this month for $450 billion in new stimulus, the proposal represents a more populist approach to confronting the nation s economic travails than the compromises he advocated earlier this summer.

We can t just cut our way out of this hole, Obama said in a speech in the Rose Garden of the White House. It s going to take a balanced approach .

Obama proposed new taxes on the wealthy, a special new tax for millionaires , and eliminating or scaling back a variety of loopholes and deductions for those making more than $250,000 a year. About half of the tax savings would come from the expiration next year of the George W. Bush administration tax cuts for the wealthy.

We can t afford these special lower rates for the wealthy rates, by the way, that were meant to be temporary, Obama said. We can t afford them when we re running these big deficits.

But the presidentAny reduction in Medicare benefits would not begin until 2017.

Other cuts in domestic spending would bring the total spending savings to $580 billion. These cuts include scaling back farm subsidies, altering pensions and benefits for members of both the civil service and military service, and other changes in government operations.

About $1.1 trillion in savings is also expected from winding down the wars in Iraq and Afghanistan.

Obama pledged to veto any cut in entitlements that does not also include increases in tax revenue.

Combined with the debt deal this summer, Obama s plan would reduce the federal debt by $4.4 trillion over a decade.

Coming as a congressional super committee goes to work to find budget savings this fall, Obama s position will probably delight Democrats, who have fretted for months that he is doing too little to solve the nation s jobs crisis while being too willing to embrace major changes to Medicare and Social Security.

But his plan has little chance of passing and is already inflaming Republicans, Senate Minority Leader Mitch McConnell (R-Ky.) said Monday . The good news is that the Joint Committee is taking this issue far more seriously than the White House.