In announcing his Plan the President said, "You know, last week, Speaker of the House John Boehner gave a speech about the economy [See WIMS 9/15/11]. And to his credit, he made the point that we can't afford the kind of politics that says it's "my way or the highway." I was encouraged by that. Here's the problem: In that same speech, he also came out against any plan to cut the deficit that includes any additional revenues whatsoever. He said -- I'm quoting him -- there is 'only one option.' And that option and only option relies entirely on cuts. That means slashing education, surrendering the research necessary to keep America's technological edge in the 21st century, and allowing our critical public assets like highways and bridges and airports to get worse. It would cripple our competiveness and our ability to win the jobs of the future. And it would also mean asking sacrifice of seniors and the middle class and the poor, while asking nothing of the wealthiest Americans and biggest corporations. So the Speaker says we can't have it 'my way or the highway,' and then basically says, my way -- or the highway. That's not smart. It's not right. If we're going to meet our responsibilities, we have to do it together."
The President continued, "This is not class warfare. It's math. The money is going to have to come from someplace. And if we're not willing to ask those who've done extraordinarily well to help America close the deficit and we are trying to reach that same target of $4 trillion, then the logic, the math says everybody else has to do a whole lot more: We've got to put the entire burden on the middle class and the poor. We've got to scale back on the investments that have always helped our economy grow. We've got to settle for second-rate roads and second-rate bridges and second-rate airports, and schools that are crumbling. That's unacceptable to me. That's unacceptable to the American people. And it will not happen on my watch. I will not support -- I will not support -- any plan that puts all the burden for closing our deficit on ordinary Americans. And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share. We are not going to have a one-sided deal that hurts the folks who are most vulnerable. . ."
According to the summary, "The President's Plan for Economic Growth and Deficit Reduction lives up to a simple idea: as a Nation, we can live within our means while still making the investments we need to prosper -- from a jobs bill that is needed right now to long-term investments in education, innovation, and infrastructure. It follows a balanced approach: asking everyone to do their part, so no one has to bear all the burden. And it says that everyone -- including millionaires and billionaires -- has to pay their fair share. Overall, it pays for the President's jobs bill and produces net savings of more than $3 trillion over the next decade, on top of the roughly $1 trillion in spending cuts that the President already signed into law in the Budget Control Act -- for a total savings of more than $4 trillion over the next decade. This would bring the country to a place, by 2017, where current spending is no longer adding to our debt, debt is falling as a share of the economy, and deficits are at a sustainable level."
In summary form the President's Plan proposes to produce approximately $4.4 trillion in deficit reduction net the cost of the American Jobs Act.
- $1.2 trillion from the discretionary cuts enacted in the Budget Control Act.
- $580 billion in cuts and reforms to a wide range of mandatory programs;
- $1.1 trillion from the drawdown of troops in Afghanistan and transition from a military to a civilian-led mission in Iraq
- $1.5 trillion from tax reform
- $430 billion in additional interest savings
Speaker Boehner included a note saying, "The President's proposal would raise taxes on both small businesses and on private capital, which is the essential ingredient for job creation in our economy. By declining to support structural improvements to strengthen our entitlement programs, the President has chosen to ignore the warnings about our debt crisis sent by the markets in August leaving Americans exposed to the possibility of further downgrades that will further damage confidence and make it harder for our economy to grow and create jobs."
Senate Minority Leader Mitch McConnell (R-KY) also issued an immediate response saying, "Veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth -- or even meaningful deficit reduction. The good news is that the Joint Committee is taking this issue far more seriously than the White House."
Senator McConnell appeared on Meet the Press Sunday and commented on the President's $447 billion AJA proposal and said, in part, "Right now, we've got -- we've thrown a big, wet blanket over the private sector economy. We've borrowed too much. We've spent too much. We're dramatically overregulating every aspect of the private sector in our country and now we're threatening to raise taxes on top of it. That's not going to get the economy moving. . . I mean, if you look at the stimulus bill, David, what did we get out of that? Turtle tunnels and Solyndra. Solyndra. Look, more money was lost on Solyndra than came to my state to fix roads and bridges out of the entire stimulus package last year. And now he's asking us to do it again. One of my favorite sayings here in Kentucky, out in the rural areas, is there's no education in the second kick of a mule. I mean, we've been there. We've done that. Now he's asking us to do it again. I'm trying to get him to go in a different direction."
American Petroleum Institute (API) President and CEO Jack Gerard issued a statement saying, "President Obama's call for higher taxes on the U.S. oil and natural gas industry would undercut efforts to create jobs." He said, "The president's plan to raise taxes would destroy jobs and drive investment out of the United States. It's ironic that in his search for revenues, the president overlooks the revenues available from increased access to domestic oil and natural gas. Rather than raising taxes on a single industry, he could raise revenues, create jobs and strengthen our energy security. With one stroke of his pen, the president could allow the oil and natural gas industry to create a million new American jobs in just the next seven years. This could also generate $127 billion in new revenue to the government. . ."
John Engler, president of Business Roundtable (BRT) issued a statement saying, "With the current, anemic economic conditions, the unemployment rate will remain consistently high and tax receipts will remain low unless the focus shifts to long-term policies and economic growth. The uncertainty created by the threat of even higher taxes helps neither job creation nor growth. . . We remain convinced that a lower corporate rate and a competitive territorial system are essential elements of successful economic growth strategy."