Tax Cuts Still an Issue in Obama's Deficit Plan

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President Barack Obama drew a line in the sand for lawmakers Monday, saying he will not sign any deficit bill that reduces benefits to Medicare recipients without raising taxes.

The president's plan is a 10-year deficit-reduction package that calls for raising taxes on the wealthy and cutting government spending.

Republicans say tax increases shouldn't be on the table, setting the stage for another heated debated in Washington on how to tame the nation's growing deficit.

Kereakos Zuras, a former advisor to President George W. Bush, examined the president's deficit reduction plan on the CBN News Channels Morning News, Sept. 20.

President Obama wants to let the Bush tax cuts for higher earners expire, limit tax deductions used by wealthy Americans, and end some corporate tax breaks.

The White House calls the plan the "Buffett Rule," named after billionaire Warren Buffett.

"I think that people of the high end, people like myself should be paying a lot more in taxes," Buffett said recently.

Buffett's secretary currently pays 29 percent in taxes on an income of $60,000, while he only pays 17 percent in taxes on a $46 million income.

"An outrage he (Buffett) has asked us to fix," Obama said.

The Obama administration hasn't offered specifics on how the plan will work, but officials say there are lots of ways it can be done.

"It is wrong that in the United States of America a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than someone pulling in $50 million," Obama said Monday.

In all, the president proposes raising $1.5 trillion in new taxes as part of his plan to reduce more than $3 trillion in federal spending over the next 10 years.

In his argument for tax hikes, the president addressed Republicans who accuse him of waging class warfare.

"This is not class warfare. It's math," Obama said.

House Speaker John Boehner suggested it was the president's speech that didn't add up.

"This administration's insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programs are the reasons the president and I were not able to reach an agreement previously," Boehner said in a statement. "And it is evident today that these barriers remain."

Where the two sides may agree is on spending cuts.

Obama said his plan cuts $2 for every $1 raised in taxes by reforming agriculture subsidies, adjusting retirement for federal workers, and asking financial firms that received bailouts to pay taxpayers back.

The president's plan also counts savings of $1 trillion by ending the wars in Iraq and Afghanistan. He wants to cut $320 billion from Medicare and Medicaid.

Obama's plan does not address social security.

The proposal will now be sent to the "super committee" -- a bipartisan group of lawmakers meeting on Capitol Hill to come up with deficit reduction measures both parties can agree on.

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Jennifer Wishon

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Jennifer Wishon is the White House correspondent for CBN News based in the network’s Washington, D.C. Bureau.  Before taking over the White House beat, Jennifer covered Capitol Hill and other national news, from the economy to the 2010 oil spill in the Gulf of Mexico. Follow Jennifer on Twitter @JenniferWishon and "like" her at Facebook.com/JennWishon.