In addition to his proposed $1.5 trillion in upper-class tax increases, Obama's plan would also cut about $580 billion from medicare and medicaid, as well as $1 trillion in military spending by bringing home troops from Iraq and Afghanistan. Obama punctuated his threat to veto any proposal to cut medicare benefits without accompanying tax increases by saying "I will not support any plan that puts all the burden for closing our deficit on ordinary Americans."
For reference, here are the key points of Obama's deficit-reduction package:
- $1.5 trillion in new revenue, which would include about $800 billion over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.
- $580 billion in cuts in mandatory benefit programs, including $248 billion in Medicare and $72 billion in Medicaid and other health programs. Other mandatory benefit programs include farm subsidies and federal employee benefits. Administration officials said 90 percent of the $248 billion in 10-year Medicare cuts would be squeezed from service providers. The plan does shift some additional costs to beneficiaries, but those changes would not start until 2017.
- $430 billion in savings from lower interest payment on the national debt.
- $1 trillion in savings from drawing down military forces from Iraq and Afghanistan.
Of course, it took no time for the Republicans to dismiss Obama's package before the ink dried on it. Senator Mitch McConnell of the "Our only priority as Republicans in Washington is to make Obama a one-term president" fame released a statement saying, "Veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth - or even meaningful deficit reduction." He went on to add, "The good news is that the Joint Committee is taking this issue far more seriously than the White House."
So, once again Obama is taking drastic and decisive action to try and get our economy out of the quagmire of recession we've been stuck in for four years and once again congressional Republicans are doing anything and everything they can to stop him. However, the Republican zeal to do the opposite of whatever Obama says only betrays their hypocrisy and true agenda to wreck the economy, devastate the middle class and do as much damage to the country as possible between now and 2012 in order to best insure a Republican presidential victory...
For example, McConnell dismisses the $1 trillion in savings by drawing down troop numbers in Iraq and Afghanistan as "phantom savings". However, it was the house Republicans who first proposed those savings in their own budget proposal earlier this year and speaker John Boehner had agreed to count them as savings during the debt ceiling negotiations. So, they're real savings when house Republicans propose them, but they're only "phantom savings" when Obama does it?
Also, the cuts to medicare and medicaid spending are also taken straight from the Republican budget proposals from earlier this year.
In fact, the only thing in Obama's deficit reduction package that isn't a Republican idea is the tax cuts for middle-class Americans and the tax increases for the wealthiest people and corporations.
As usual, the Republicans and all the talking heads are decrying this as more "class warfare" from Obama. However, the numbers betray their hypocrisy.
Right now, the wealthiest Americans and largest corporations pay a tax rate that is lower than the average middle class family. How? Well, currently, the upper-class tax rate is 32%, however, most ultra-wealthy individuals and corporations make the bulk of their income/revenue through investments, which are only taxed at 15%. The average middle-class family is taxed at an average rate of 25%, so - like Obama said - it's simple math. 15% is less than 25%. Obama's plan would increase that 15% tax rate to insure that the wealthiest Americans and corporations pay their fair share. I mean, it is only fair, right? That a billionaire or a multi-billion dollar company pay at least as much in taxes as a struggling, middle-class family living paycheck to paycheck?
Obama's plan calls for fairness and equity in our tax code, making sure all Americans pay their fair share. It closes loopholes and ends certain corporate tax breaks. In an economy where the middle-class is shrinking more and more each day and corporations and the wealthiest Americans are seeing the highest average income in history, is Obama really the one committing "class warfare" here?
Just think about that for a minute. The middle-class is earning less money on average now than they were 4 years ago, between 3-6% less to be exact. At the same time, the wealthiest Americans have seen their average income increase by at least 10%. The middle-class is doing worse, the wealthy elite are doing better than ever, but if the middle-class says anything about it, if we point out the growing income disparity in our country, if we simply ask the question "Why do we have to pay for everything? Why can't the richest, most successful people in the country help out too?" We're the ones committing class warfare?
Why is it only ever class warfare when it's the poor and the middle-class fighting back against the rich?
-Why isn't it class warfare when major corporations lay off tens of thousands of working-class Americans so that they can boost their profits and increase their stock value?
-Why isn't it class warfare when billionaires like Warren Buffett pay an average 15% tax rate, while a middle-class family making $50,000 a year pays 25% in taxes?
-Why isn't it class warfare when Republicans want to gut medicare and social security, slash welfare and unemployment benefits, cut public education funding and attack universal health care?
-Why isn't it class warfare when politicians send our young men and women off to fight and die for a war that doesn't need to be fought in the first place? When the vast majority of enlisted men and women come from poor and lower-middle class families?
-Why isn't it class warfare when politicians ignore the problems of inner cities? When they ignore the rampant crime, poverty and strife? When they underfund inner-city schools? When they allow generations of institutional poverty to go unchecked?
-Why isn't it class warfare when our nation is dealing with over 14 million people out of work and all the Republicans can talk about is giving more tax cuts to the corporations who laid many of those people off and putting more money in the pockets of so-called "job creators" who not only haven't created any jobs in the last 4 years, but have laid off hundreds of thousands of hard-working Americans?
I suppose it's only "class warfare" when the "lower" class doesn't know it's place...
It's only class warfare when the proletariat starts to think it has the same rights and entitlements as the bourgeois...
It's only class warfare when the impudent middle-class thinks it has the right to take bread from the table of the wealthy elite...
It's only class warfare when we protest our exploitation...
But, this is how it's going to be. Obama has proposed a plan to reduce spending, increase taxes and take meaningful steps towards paying down our record-high debt. Clinton did much the same thing during his presidency and was met with a similar stonewall of non-cooperation from congressional Republicans, led by Newt Gingrich. That time, the stalemate resulted in a government shut-down, but in the end the Republicans capitulated, Clinton got his take increases and left office with a budget surplus. 10 years later, can Obama show the same backbone and resolve and get the same results? He can, but not without the support of the American people.
If congressional Republicans are content to leave the middle-class languishing in unemployment, financial hardship and stagnation while they wait 14 months for the next election, then we can make sure they lose that election. If congressional Republicans are content with playing politics with our economy and the lives of hard-working Americans, then we can make sure it doesn't work out the way they're planning it to. Congressional Republicans want to do as much damage to this country as they can over the next 14 months, so they can lay it at Obama's feet in November and coast into the white house. They have been engaged in class warfare with the middle-class for 30 years, it's time we finally fight back. We have the numbers, we have the voice and we can make real change happen in this country, if we're willing to have the courage to do it.
It's not class warfare, it's math. They have all the wealth, but we have all the votes.