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Obama to lay out deficit plan today

19 September 2011 14:01 (UTC +04:00)

Baku - APA-Economics. President Barack Obama will lay out a plan on Monday to cut the U.S. deficit, striking a populist tone aimed at galvanizing his Democratic Party base ahead of the November 2012 election, APA reports citing Reuters.

Obama will vow to veto any cuts proposed for the government-run Medicare health program for the elderly unless Congress agrees to raise taxes on companies and the wealthy.

The president’s recommendations to a congressional "super committee" would deliver deficit savings of more than $3 trillion over the next decade, his aides said, with roughly half of those savings coming from higher tax revenues.

Republicans, who control the U.S. House of Representatives, are firmly rejecting any tax hikes to raise revenues. Many Democrats see that as a sign for Obama to stop trying to compromise with Republicans over tackling the debt, and instead to fight for the voters who put him office.

"These things are critical to the base," said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities in Washington and a former economic adviser to Vice President Joe Biden.

Obama, under fire from Democrats to defend Medicare and Medicaid healthcare programs as he seeks to boost flagging support ahead of next year’s election, will demand that all Americans share the burden of controlling the budget.

"He will veto any bill that takes one dime from the Medicare benefits seniors rely on without asking the wealthiest Americans and biggest corporations to pay their fair share," a senior administration official told reporters on Sunday.

Medicare, for elderly and disabled Americans, and Medicaid for the poor, are viewed by analysts as the biggest contributors to long-term U.S. deficits, which many voters see as a key issue in the election.

The U.S. budget deficit in 2011 is expected to be about $1.3 trillion.