Obama threatens veto to get $1.5tn tax increases
US President Barack Obama cast himself as a champion of "fairness" for the middle class yesterday in the fight to reduce the deficit with a call for $1.5 trillion in tax increases.
The rises will be introduced gradually over the next 10 years and will be aimed at the wealthy.
Mr Obama combined his call for a tax increase with a threat to veto any legislation Congress sends him that would reduce benefits from the Medicare health-insurance plan for the elderly, unless wealthy Americans also face higher taxes.
"This is not class warfare, it's math," Mr Obama said, speaking at the White House as he unveiled his recommendations to a 12-member congressional committee charged with finding ways to trim at least $1.5tn from the deficit. "The money's going to have to come from someplace."
However, the gung ho approach puts Mr Obama on a warpath with Republican congressional leaders such as House Speaker John Boehner, who last week declared tax increases "off the table".
The Republicans also called for a bipartisan supercommittee to focus on scaling back entitlement programmes such as Medicare. The panel has a November 23 deadline to come up with a plan.
The positions represent a retreat from compromises that Mr Obama and Mr Boehner struck in unsuccessful negotiations in July to reduce long-term deficits and a sharpening of partisan differences over the budget. It sets the stage for a potential stalemate in the supercommittee's deliberations.
Mr Obama coupled the call for tax increases with spending cuts that he said would reduce the long-term deficit by $3tn beyond the $1tn that was agreed to as part of a deal to raise the US debt ceiling.
He included a proposal to overhaul the tax code. He said his plan would eliminate "special lower rates for the wealthy" which were "meant to be temporary".
He also would close loopholes in corporate tax law.
Republicans swiftly condemned the president's plan.
"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," Senate minority leader Mitch McConnell said.
Former Massachusetts governor Mitt Romney, a leading contender for the Republican Party nomination to face Mr Obama next year, criticised the president's plan as a threat to job creation saying it would have a "crushing" effect on economic growth.