WASHINGTON - President Barack Obama proposed cutting ballooning U.S. budget deficits by $4 trillion over 12 years Wednesday and called for talks with Democratic and Republican lawmakers to address the worsening fiscal woes.
Obama, who has been criticized by both Democrats and Republicans for taking too low a profile in the debate over how to tame long-term debt and deficits, said the budget savings should be achieved through a mix of spending cuts and revenue increases through higher taxes.
Obama shared details of his plan with Democratic and Republican lawmakers ahead of a speech at 1:35 p.m.
According to congressional sources, Obama will propose:
* Reducing the deficit by $4 trillion in 12 years or less
* Curbing deficits to 2.5 percent of GDP in 2015, 2 percent toward the end of the decade
* Ending Bush-era tax rates for the wealthiest Americans
* Seeking $770 billion in savings by 2023 in cuts to non-security discretionary spending
* Saving $480 billion in Medicare and Medicaid by 2023 and at least $1 trillion more by 2033.
Obama will use the speech to try to regain control of the spending debate by drawing a contrast with a Republican plan to combine an overhaul of the Medicare health program with lower taxes to reduce the deficit by $4.4 trillion in 10 years.
Obama was expected to point to recommendations made last year by his debt commission, co-chaired by Republican Alan Simpson and Democrat Erskine Bowles, as a starting point for discussion.
He has so far declined to endorse their report but in a sign he was moving closer toward their findings, the panel co-chairmen were expected to attend the speech.
The deficit issue has become entangled with a vote Congress will consider in the next few weeks on raising the nation's borrowing limit. Republicans say they will not vote to lift the debt limit without commitments to rein in long-term deficits.
The debt is expected to hit the $14.3 trillion ceiling as early as mid-May and a failure to lift it could raise the specter of default and ripple through financial markets.
Jamie Dimon, chief executive of JPMorgan Chase, warned in a call with reporters on Wednesday that it would be unwise to "play with that fire."
"If it (the United States) actually defaults on its debt, it would be potentially catastrophic." (Additional reporting by Andy Sullivan, David Morgan, Deborah Charles, Richard Cowan and Patricia Zengerle; Editing by Jackie Frank)
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