White House: Obama to Propose New Plan to Reduce Long-Term Deficits

AP

President Obama is introduced by senior adviser David Plouffe before he speaks at a Democratic National Committee event in Washington March 16.

White House senior adviser David Plouffe said Sunday that President Obama plans to outline a new proposal for bringing down the federal deficit this week. 

The announcement comes shortly after the White House reached a deal with Congress to fund the government for the rest of the fiscal year, and ahead of two other spending battles. Republicans are pushing for trillions in additional spending cuts over the next decade as part of their 2012 budget proposal and are threatening to torpedo a vote to raise the debt ceiling unless their spending-cut demands are met. 

Plouffe, who served as Obama's campaign manager in 2008, told "Fox News Sunday" that Obama wants to take a "balanced approach" to these issues and will lay out his proposal this week. The Obama plan, a follow-up to an earlier White House budget outline, would effectively serve as a counterproposal to the 10-year plan unveiled last week by Rep. Paul Ryan, R-Wis. -- a plan that aims to reduce the deficit by $4.4 trillion in that period through spending cuts and entitlement reforms.  

"We have to use a scalpel, not a machete," Plouffe cautioned, while vowing to look at "all corners of government" for savings. "We're going to have a big debate."

Plouffe said the president's plan would address Medicare and Medicaid, though he said Obama would downplay Social Security as a minor contributor to the country's short-term deficits. He said the president would continue to push for rolling back the Bush tax cuts for wealthy Americans. 

"His budget for this year says for upper-income Americans, he does believe that they need to contribute to the deficit reduction in this country," he said. 

The White House said in a Twitter post that the president would deliver his opening speech on the plan Wednesday. 

Plouffe, in the interview, criticized Ryan's plan for making cuts to education and energy investment while giving tax breaks for the wealthy. But Plouffe made clear that the White House is outlining its new deficit reduction plan with an eye toward the upcoming debt ceiling vote. 

"We're not going to default on the debt limit. We can't do that," Plouffe said, warning that such a move would hurt job creation and lead to increased interest rates. He said the White House wants to make clear that deficit reduction is possible, suggesting lawmakers on both sides of the aisle should back an increase in the debt ceiling while working toward long-term deficit reduction. 

"We don't disagree that we cannot continue on this fiscal path," he said. Plouffe said that, as the latest budget deal proves, "compromise is not a dirty word."  

But House Republican Leader Eric Cantor, R-Va., questioned whether Obama had found religion on spending cuts. Though Republicans and Democrats just reached a deal to cut $38.5 billion out of the budget for the rest of the current fiscal year, Cantor said the White House wasn't exactly cooperative. 

"We've had to bring this president kicking and screaming to the table to cut spending," Cantor told "Fox News Sunday. "It's really hard to believe what this White House and what this president is saying." 

He said Republicans will still need to see genuine spending cuts and entitlement reforms to go along with an increase in the $14.3 trillion debt ceiling. 

Earlier in the year, Obama proposed a 10-year budget plan that forecast $1.1 trillion in deficit reduction. But Republicans derided the proposal, noting that the president was looking to freeze discretionary spending at already-high levels and that the national debt would continue to soar under his plan. 

Sen. Jeff Sessions, R-Ala., top Republican on the Senate Budget Committee, said Sunday that he hopes the next proposal will be "sincere." 

"I think he needs to do more than just give a speech," he told Fox News. "I think he needs to submit a new budget." 

Cantor said Sunday that the weekend's budget deal was "only the beginning" in the battle to control spending. 

"We have a fiscal train wreck before us," he said. "This is the first bite of the apple." 

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Obama outlines plan to reduce oil imports

By Pablo Martinez Monsivais, AP

President Obama talks about America's energy security on Wednesday at Georgetown University in Washington.

EnlargeCloseBy Pablo Martinez Monsivais, AP

President Obama talks about America's energy security on Wednesday at Georgetown University in Washington.

"Tell a Democrat in Washington that gas prices are too high, and, as if on cue, they'll throw together a speech or press conference" to call for tapping into oil reserves or to tout expensive new cars that run on alternative fuels, Senate Republican leader Mitch McConnell said.

By midafternoon, the tempo had increased.

"Same old, same old," chided Sen. David Vitter, R-La., who said Obama was simply restating his "failed" energy policy of the past two years that has resulted in $3.60-a-gallon gas prices.

Amid such skepticism from Republicans in Congress, Obama turned to energy Wednesday after weeks of focus on unrest across the Middle East, the devastation and nuclear crisis in Japan, and tense congressional budget negotiations.

The White House cast his speech to an audience at Georgetown University as an effort to pivot from crisis management to policymaking.

Acknowledging that it has been "a tumultuous time for the world," Obama said the various crises point to a pressing need to reduce the nation's dependence on oil. "There are no quick fixes," he said, as he pledged to reduce oil imports by a third by 2025.

He said the nation "has known about the dangers of our oil dependence for decades. Presidents and politicians of every stripe have promised energy independence, but that promise has so far gone unmet. ... We've also run into the same political gridlock and inertia that's held us back for decades. That has to change."

His plan to cut by a third the roughly 10 million barrels of oil a day imported from abroad hinges on producing more domestic oil, increasing energy efficiency and relying on cleaner alternatives. Obama said the nation must:

•Tap into the nation's large reserves of natural gas. He said he had directed Energy Secretary Steven Chu to improve the safety of the extraction process so that the water supply isn't polluted during excavation.

•Increase reliance on renewable biofuels made from ethanol, switch grass, wood chips and biomass. Obama has directed the Navy and the Energy and Agriculture departments to create biofuels to power fighter jets, trucks and commercial airliners.

•Decrease reliance on oil by making cars and trucks more fuel-efficient. He said the White House soon will propose new standards for heavy-duty trucks and an additional round of new standards for cars.

•Continue investing in high-speed rail and mass transit.

He also made a plug for nuclear energy — as long as it's safe.

"In light of our tight fiscal situation, it's fair to ask how we'll pay for all of it," Obama said. But as the nation confronts high gas prices, pollution and lost jobs, "we are already paying a price for our inaction. ... If we do nothing, that price will only go up."

Obama also cast aside oil industry complaints about his administration's slow approval of drilling permits after last spring's BP oil spill off the Gulf Coast. The White House said the industry needs to make greater use of the leases it has been granted.

The Western Energy Alliance, a trade group of 400 oil and gas companies, said Wednesday that the "increasing costs and regulatory uncertainty" created by the Obama administration have stalled new development.

Government policies under Obama "only serve to make federal lands less attractive for companies to develop," the group's Kathleen Sgamma said.

Vitter, meanwhile, said he'll introduce his own plan today, in the form of a bill likely to spark objections from Democrats. It would open the Arctic National Wildlife Refuge to drilling, speed the permitting process for new exploration and block some Environmental Protection Agency anti-pollution regulations.

Obama doesn't have a bill to offer, but he will — as McConnell suggested — try to make his case to the public on Friday when he tours a UPS shipping plant in Maryland that uses clean-energy alternative fuel for its trucks.

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