Budget deficit cutting strategy unveiled by Barack Obama

Obama bares budget deficit cutting plan

The U.S. budget deficit will be $4 trillion less within 12 years if President Barack Obama's plan comes to fruition.

In a speech today at Georgetown University, Obama unveiled his revamped plan to bring down the budget deficit through a series of tax hikes and spending cuts.

"We have to live within our means, reduce our deficit, and get back on the path that will allow us to pay down our debt," Obama said. "And we have to do it in a way that protects the recovery."

He also reiterated his vow not to renew Bush-era tax cuts which are about to expire next year. Obama wants the tax code to be revamped to do away with some tax breaks to raise revenue while lowering some rates.

To reduce the budget deficit significantly, a prime target is to lower government spending, particularly defense spending worth $400 billion in the next few years.

This early, Republican leaders are saying that they will oppose the President's plan if it involved tax hikes to lower the budget deficit.

"If we are going to resolve our differences and do something meaningful, raising taxes will not be part of that," said House Speaker John Boehner after a meeting at the White House.

The majority of the spending cuts will be implemented in the latter half of the 12-year plan proposed by Obama to make as little impact as possible to the ongoing economic recovery.

In his speech, Obama also took a shot at the previous administration which reversed gains, saying that "we lost our way in the decade that followed" the 1990s when the government was able to bring down the budget deficit and turn into a surplus.

Posted by enriquez on Wednesday May 04 2011, 6:20 AM EST. Ref: Bloomberg. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0