President Obama Announces New Budget Plan
Obama unveiled a debt reduction plan Monday that will cut over $3 trillion from the defecit over the next ten years. The plan incorporates a combination of mandatory cuts and taxes hikes for America's wealthiest.
A significant portion of the cuts will come by way of a $1.5 trillion increased tax burden on high-income individuals and companies.
About $800 billion will come from allowing the expiration of many of Bush's tax cuts for high-income individuals and closing tax loop-holes.
An additional tax, which has been named the "Buffett Rule" after proponent and billionaire Warren Buffett, would impose a higher tax rate on Americans making more than $1 million a year. Buffett, a billionaire himself, has argued that the wealthiest Americans are not being taxed enough, since most of their income comes through investments which are subject to decreased tax rates.
The tax increases are coupled with spending reductions, including a projection of $1.1 trillion that will be saved by wrapping up the wars in Afghanistan and Iraq.
The plan is already encountering heated opposition from Republicans, many of whom are accusing the President of initiating class warfare.
House Budget Committee Chairman Paul Ryan told Fox News Sunday that "[The President's] in a political class warfare mode and campaign mode. And that's not good for our economy."
The President directly challenged Republicans who want to cut spending without raising taxes, saying that it's going to take a balanced appproach to steady the economy.
"It's only right that we ask everyone to pay their fair share," the President said in his speech given in the Rose Garden.
The President's budget proposal will next go to Congress where it must survive the Republican Congress in order to take effect.
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