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Obama To Offer Deficit Reduction Proposal

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Obama To Offer Deficit Reduction Proposal

Obama To Offer Deficit Reduction Proposal

Obama To Offer Deficit Reduction Proposal

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President Obama weighs in with a budget policy speech at George Washington University Wednesday. He'll lay out his long-range plan for getting the country's fiscal house in order.

STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE, host:

And I'm Renee Montagne.

President Obama is wading into a debate that he avoided until today. In a speech later this afternoon, he will offer a long-range plan for reducing the federal debt. It was the president who last year formed a commission to look into the debt. But this year fiscal experts said the president's own budget proposal did relatively little to deal with the long-term problem.

Joining us to preview the president's speech is NPR's national political correspondent Mara Liasson. Good morning.

MARA LIASSON: Good morning, Renee.

MONTAGNE: Now, why is the president giving this speech at this moment in time?

LIASSON: Well, the White House says this was their plan all along. They say as soon as the budget debate was done last week, and Paul Ryan, the House Republican Budget Committee chair had put his deficit plan forward, and before the debt ceiling debate heated up, they would go forward.

Now, there's no doubt, as you said, that the president has taken some hits for not leading on the big fiscal issues. But the White House believes that waiting was worth it because the Ryan budget - with its deep spending cuts, big tax cuts for the wealthy and privatizing Medicare - has opened up a huge space in the political center. And they want the president to occupy that space.

MONTAGNE: And what does the White House - well, they want him to occupy the space. But what exactly do they want to accomplish with this speech?

LIASSON: Well, I think the political goals for this speech is that the president wants voters to believe that he has a serious plan for dealing with the deficit. He wants to convince them that it's better and fairer than the Ryan plan. And also, he wants to remind them that he wants to work across the aisle with Republicans, just like he did in the lame-duck tax negotiations and last week on the budget negotiations, to solve this problem.

MONTAGNE: How specific will the president get?

LIASSON: Well, I think the big news from this speech is going to be that he will embrace much of the recommendations of his own deficit reduction commission. The White House guidance this morning says he'll be borrowing from it.

This is the Bowles-Simpson plan that he has kept at arm's length until now. It's the plan that that bipartisan group, called the Gang of Six in the Senate, is trying to figure out a way to legislate.

The commission's goals are to reduce spending in every area: military, domestic, Medicare, Medicaid, and to overhaul the tax code so you lower income tax rates across the board by ending or shrinking a lot of tax breaks. And I think you'll hear the president say today that this is the foundation for going forward. It's the best opportunity for a plan that's both balanced and bipartisan.

I also think you'll hear him talk about the differences between cutting spending and reducing the deficit. The White House argument is that the Ryan plan cuts spending, but because of its big tax breaks for the wealthy, it doesn't achieve much actual deficit reduction or enough deficit reduction.

MONTAGNE: Well, Republicans are already attacking Mr. Obama for raising taxes as a way to bring down or cut the deficit. But what do you expect the reaction will be from the president's Democrats in Congress?

LIASSON: Well, Renee, already outside liberal groups like MoveOn.org are warning that if he touches entitlements, they will sit out the next election, donors won't give to him anymore.

But I think the real tripwire for a progressive Democratic revolt inside of Congress would be Social Security. It isn't a big driver of the deficit, although it does need to be put on a more solvent footing for future generations. But Paul Ryan left Social Security out of his plan. And I think today you'll hear generalities, not specifics, about Social Security from the president.

But one important sign: Yesterday the ranking Democrat on the House Budget Committee, Chris Van Hollen, endorsed the Bowles-Simpson approach. So I think it looks like the president's own deficit commission is now shaping up to be the center of this debate.

MONTAGNE: Mara, thanks very much.

LIASSON: Thank you.

MONTAGNE: NPR's Mara Liasson.

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