Obama to lay out his deficit strategy

Handicapping Obama's budget speechSTORY HIGHLIGHTSThe president enters tricky political territory with highly anticipated speechPresident Obama is responding to a Republican budget planThe speech comes amid a national debate on budget issues Washington (CNN) -- President Barack Obama enters politically tricky territory Wednesday when he outlines his plan for reducing long-term deficits and the national debt amid a climate of tense budget negotiations.

The speech at George Washington University will follow White House talks in the morning with congressional leaders who are staking out positions on upcoming issues including approval of last week's budget deal for the rest of the current fiscal year, increasing the federal debt ceiling and crafting a budget for fiscal year 2012.

For Obama, the speech is a response to a Republican budget plan for next fiscal year released last week by House Budget Committee Chairman Paul Ryan, R-Wisconsin, that would overhaul the Medicare and Medicaid government health care programs for the elderly while reforming the tax code to lower rates and eliminate loopholes.

The Ryan plan is strongly opposed by the White House and congressional Democrats, who say it protects the wealthy while putting the burden of spending cuts and other reforms on the middle class and the poor.

A White House official said Obama's speech would emphasize "shared prosperity and shared responsibility," advocating a balanced approach to control expanding deficits while protecting vital spending for education, innovation and clean energy.

According to the official, Obama will call for holding down domestic spending, cutting defense spending, reducing costs while strengthening Medicare and Medicaid, and tax reform.

"The president's proposal will build off of the deficit reduction measures included in his 2012 budget and will borrow from the recommendations of the bipartisan Fiscal Commission he created" last year, the White House official said.

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