Obama: ‘We Would Not Be a Great Country’ Without Gov’t Entitlements

April 13, 2011 - 4:16 PM
Obama lame duck

President Barack Obama. (AP Photo/Pablo Martinez Monsivais)

Washington (CNSNews.com) – In his major fiscal address today, which called for tax increases, military budget cuts, and entitlement reforms, President Barack Obama said government entitlements make America great.

“‘There but for the grace of God go I,’ we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities,” Obama said. “We are a better country because of these commitments. I’ll go further – we would not be a great country without those commitments.”

In his speech at George Washington University, which was broadcast nationwide, Obama announced a four-step plan to cut $4 trillion over 12 years, and harshly criticized a plan by House Budget Committee Chairman Paul Ryan (R-Wisc.) released last week that calls for $6 trillion in deficit reduction over 10 years and entitlement reform.

Attending the speech were Vice President Joe Biden, Treasury Secretary Timothy Geithner, White House Office of Management and Budget Director Jack Lew and the co-chairs of Obama’s bipartisan debt commission, former Clinton Chief of Staff  Erskine Bowles and former Wyoming Republican Senator Alan Simpson.

Obama called for bipartisan cooperation to solve the nation’s exploding debt and deficit problem, but used uncompromising rhetoric about raising taxes on high-income earners

“In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans,” Obama told a crowd of about 200 at the university. “But we cannot afford $1-trillion worth of tax cuts for every millionaire and billionaire in our society.  And I refuse to renew them again.”

Obama referred to getting rid of the Bush tax cuts and eliminating certain tax deductions as a plan to “reduce spending in the tax code.”

House Budget Chairman Paul Ryan (R.-Wis.)

House Budget Chairman Paul Ryan, R.-Wis. (AP photo)

“Most wealthy Americans would agree with me,” Obama said. “They want to give back to the country that’s done so much for them.”

The Ryan plan, The Path to Prosperity, would keep the current tax rates from the Bush era tax cuts of 2001 and 2003 in place. However, Obama accused Ryan of supporting tax breaks for the wealthy.

“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,” Obama said. “The fact is, their vision is less about reducing the deficit than it is about changing the basic social compact in America.”

Obama – who some Democrats have criticized for compromising with Republicans in December on extending the Bush tax rates for another two years and for cutting another deal with Republicans last week to avoid a government shutdown – warned members of his party that budget cuts and entitlement reforms are necessary for a “progressive vision.”

“Indeed, to those in my own party, I say that if we truly believe in a progressive vision of our society, we have the obligation to prove that we can afford our commitments,” said Obama. “If we believe that government can make a difference in people’s lives, we have the obligation to prove that it works – by making government smarter, leaner and more effective.”

Beyond ditching the Bush tax rates in 2013, Obama also wants to eliminate certain tax deductions for high-income earners: households earning $250,000 or more and single filers earning $200,000 or more.

“The tax code is also loaded up with spending on things like itemized deductions,” Obama said. “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 while doing nothing for the typical middle-class family that doesn’t itemize.”

“My budget calls for limiting itemized deductions for the wealthiest 2 percent of Americans, a reform that would reduce the deficit by $320 billion over 10 years,” Obama said. “But to reduce the deficit, I believe we should go further. That’s why 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.”

$36.3 Trillion Medicare Shortfall Can Be Fixed, Experts Say (image)

Tax increases were only one item in Obama’s four-step plan.

The president first said he would keep annual domestic spending low, but did not provide details, only saying he would not cut “investments,” i.e, federal spending, in medical research and clean energy.

Another step involves reducing military spending.

“We need to not only eliminate waste and improve efficiency and effectiveness, but conduct a fundamental review of America’s missions, capabilities, and our role in a changing world,” Obama said. “I intend to work with Secretary Gates and the Joint Chiefs on this review, and I will make specific decisions about spending after it’s complete.”

The other step is to continue to reduce health care spending, which includes addressing entitlement spending.

We will work with governors of both parties to demand more efficiency and accountability from Medicaid,” Obama said. “…We will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services seniors need.”

He further attacked the Ryan plan for its proposed reforms of Medicare and Medicaid.

“But let me be absolutely clear,” said Obama.  “I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry.”