President Obama announces debt reduction plan

President Barack Obama called for $1.5 trillion in new taxes Monday, part of a total 10-year deficit reduction package totaling more than $3 trillion. "We can't just cut our way out of this hole," the president said.

Obama's plan would end Bush-era tax cuts for top earners and would limit their deductions.

Responding to a complaint from Republicans about his proposed tax on the wealthy, Obama added: "This is not class warfare. It's math."

28 recent polls show Americans support some tax increases as part of any serious deficit reduction plan.

Coupled with about $1 trillion in cuts already approved by Congress and signed by the president, overall deficit reduction would total more than $4 trillion, a number many economists cite as a minimum threshold to bring the nation's debt under control.

Key features of Obama's plan:
• $1.5 trillion in new revenue, which would include about $800 billion realized 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.
• $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.
• $48 billion - The administration’s Financial Crisis Responsibility Fee, which has been proposed multiple times but never moved in Congress, would require the nation’s biggest banks to pay any outstanding costs associated with the Troubled Asset Relief Program (TARP). I would expect the Tea Party to support this whole-heartedly.
• $4 billion annually - Repealing tax subsidies to the hugely profitable oil and gas industries.

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