Defiant Obama seeks new taxes on wealthy to cut debt

Defiant Obama seeks new taxes on wealthy to cut debt

Defiant Obama seeks new taxes on wealthy to cut debt

In a White House address Monday he also threatened to veto any debt reduction legislation that cuts benefits like Medicare and Medicaid, government provided healthcare for the elderly,  and doesn't include higher taxes on the wealthy.

"I will not support any plan that puts all the burden on ordinary Americans," he said abandoning earlier compromises as the Washington Post suggested.

Obama has "adopted a posture that cedes far less ground in cutting the nation's social safety net and demands much more in terms of new levies on millionaires, other wealthy Americans and some industries," it said.

"Rather than trying to identify common ground, the president is taking the same kind of tough stance that Republicans adopted in the debt-ceiling debate," said the influential New York Times.

The proposal drew an angry response from key Republicans, underscoring the considerable opposition to his plan on Capitol Hill as a special bipartisan committee on deficit reduction ramps up its work in coming weeks.

The special committee must find $1.2 trillion to $1.5 trillion in savings by Nov 23 or the federal budget will automatically be reduced by $1.2 trillion starting in 2013, a deep cut that would be split between defence and domestic spending. Obama even introduced the "Buffett Rule" for millionaires-named after investor Warren Buffett, who has frequently argued that the very rich are not taxed enough.

All told, the White House estimates Obama's plan would reduce debt to 73 percent of the size of the economy by 2021, well below the nearly 91 percent it's on track to hit without any budgetary changes. It also estimates the annual deficit that year would fall to 2.3 percent of GDP, down from the 5.5 percent currently projected.