Alert
Close

Watch the NASCAR race on Sunday at Martinsville Speedway. Join the Drive to End Hunger!

Highlights

Open

 

FREE FUN!

AARP Games - Play Now!

Contests and
Sweeps

$10,000 Winter Escapes Sweepstakes

Beat the cold and cozy up to a chance of winning $10,000! See official rules.

AARP Auto Buying Program

MOST POPULAR

Viewed

Obama Fires Deficit-Cutting Salvo

His 10-year, $3 trillion plan would spare Social Security and raise taxes on millionaires

En español | President Obama offered up $3 trillion in deficit cuts, including tax hikes on the wealthy but smaller-than-expected changes to major programs affecting older Americans.

Obama proposed no changes to the Social Security and Medicare eligibility ages. He did offer $248 billion in Medicare cuts, including new costs for future beneficiaries, and $72 billion from Medicaid.

See also: AARP rejects proposals that cut Medicare benefits.

President Obama gives a speech about his deficit-cutting plan on September 19, 2011.

President Obama speaks from the Rose Garden about his deficit-cutting plan. — Photo by: Jason Reed/Reuters

"We came out of this much better than we thought we would even a few weeks ago," said Max Richtman, head of the National Committee to Preserve Social Security and Medicare. "On balance, it's a very good plan."

Republicans immediately assailed his tax hikes on the wealthy as a threat to the economy and criticized him for not seriously tackling expensive entitlement programs.

"Pitting one group of Americans against another is not leadership," said House Speaker John Boehner, R-Ohio. "This administration's insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programs are the reasons the president and I were not able to reach an agreement previously, and it is evident today that these barriers remain."

Obama said his plan "is not class warfare. It's math."

"Either we ask the wealthiest Americans to pay their fair share in taxes, or we're going to have to ask seniors to pay more for Medicare. We can't afford to do both," Obama said in a Rose Garden speech.

The Obama package would cut $3 trillion of deficit spending over the next 10 years if it passed — a tall order given GOP objections. But a bipartisan congressional committee is working on cutting federal spending, and if it can't win final approval for at least $1.2 trillion in cuts before the end of the year, automatic spending cuts will kick in.

Not long ago, the president had offered major cuts in entitlement spending as he tried to win a deficit reduction deal with congressional Republicans and signaled he could support raising the Medicare normal retirement age to 67.

But the latest plan makes no change to Social Security. The vast majority of the $248 billion in Medicare cuts he proposed would come from reducing overpayments, according to the White House. Any changes that affect beneficiaries would not kick in until after 2017.

Next: The major changes to Medicare. >>

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Downloadable mobile app from AARP® Roadside Assistance from Allstate.

AARP Credit card from Chase

Members can earn 3% cash back on purchases with the AARP® Credit Card from Chase.

Member Benefits

Join or renew today! Members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points