WASHINGTON — President Barack Obama is proposing $1.5 trillion in new tax revenue as part of his long-term deficit reduction plan, according to senior administration officials, a plan that will draw a bright line with congressional Republicans.
The president on Monday will announce a proposal that includes the new taxes, nearly $250 billion in reductions in spending on Medicare, the federal health care program that primarily benefits the elderly; $330 billion in cuts in other mandatory benefit programs, and savings of $1 trillion from the withdrawal of troops from Iraq and Afghanistan.
The plan includes repeal of Bush-era tax cuts for the wealthiest taxpayers, no changes in Social Security and does not include an increase in the Medicare eligibility age, which the president had considered this summer.
The $1.5 trillion in tax revenue would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.
By adding the tax revenue, about $580 billion in proposed mandatory spending cuts, the savings from troop withdrawals and $1 trillion in spending cuts already in place, the combined deficit reduction would total about $4 trillion over 10 years. The administration also identified $430 billion in savings from lower interest payment on the debt.
Obama backed away from proposing sweeping changes to Medicare, following the advice of fellow Democrats that it would only give political cover to a privatization plan supported by House Republicans that turned to be unpopular with older Americans.
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