This morning, President Obama will speak in the White House Rose Garden, where he’s expected to unveil his plan to cut the national debt, while proposing a change to the tax system that would force millionaires to pay more. The President is expected to introduce roughly $3 trillion in savings this morning, in addition to the approximately $1 trillion in cuts already called for under the debt ceiling deal enacted in August. The proposed savings over the next ten years would include $1.5 trillion in tax increases, primarily on the wealthy, through a combination of closing loopholes and limiting the amount that high earners can deduct. It would also include just over $1 trillion in war savings, coming from the ending of the combat mission in Iraq and the withdrawal of U.S. troops from Afghanistan. $ 580 billion would be cut from mandatory spending, which includes approximately $250 billion from Medicare and $800 billion from Medicaid. White House officials say the Medicare cuts will not come from raising the retirement age, but it may include some means testing.
The guiding principle behind the president’s proposal is that wealthier Americans should not pay less in taxes than middle class citizens who make less than $250,000 a year. The White House calls it “The Buffett Rule,” named after billionaire investor Warren Buffett, who has frequently argued that the rich aren’t taxed enough. In a New York Times op-ed last month, Buffett said that he has been “coddled long enough by a billionaire friendly congress.” However, like many Republicans, Senate Minority Leader Mitch McConnell is rejecting the President’s proposal, while taking a shot at Buffett’s argument. He said, “With regard to his tax rate, if he’s feeling guilty about it, I think he should send in a check. But we don’t want to stagnate this economy by raising taxes. It won’t just hit individuals…there are over 700,000 of our most successful small businesses that pay taxes as individuals, not as corporations.”