Daily Tax Update - April 11, 2011: Obama To Outline Long-Term Deficit Reduction Plan Wednesday

GOVERNMENT SHUTDOWN AVERTED – OBAMA TO OUTLINE LONG-TERM DEFICIT REDUCTION PLAN WEDNESDAY:  A government shutdown was narrowly averted at the last minute when Congress passed a one-week continuing resolution to fund the government.  The final deal cut spending $78.5 billion below President Obama’s original budget request for fiscal year 2011, about $38 billion below current spending levels. 

  • In a speech Wednesday, President Obama will lay out his long-term plan for deficit reduction as Congress gears up for another battle over the fiscal year 2012 budget.  In Wednesday’s remarks, Obama is expected to call for a tax code overhaul to close loopholes on deductions and increase tax rates for upper income earners. 
  • A senior White House Adviser, David Plouffe, said yesterday that Obama will use a "scalpel, not a machete" and take a "balanced approach."  Plouffe said that the President will "lay out his approach this week in terms of the scale of debt reduction he thinks the country needs so we can grow economically and win the future, a balanced approach."  Plouffe added that the President believes the wealthy "need to contribute to the deficit reduction in this country," and supports rescinding the Bush tax cuts for upper income taxpayers.  Plouffe also said, "Revenues are going to have to be part of this."
  • House Majority Leader Eric Cantor (R-VA) responded to Plouffe’s remarks by saying, "I sit here and I listen to David Plouffe talk about, you know, their commitment to cut spending and knowing full well that for the last two months, we've had to bring this president kicking and screaming to the table to cut spending.  I then hear they're going to present a plan as far as how to address the fiscal situation.  So, on one hand, we're going to defend that tax agreement but then go ahead and violate it."  Cantor added, "I have to believe that the president and the White House are beginning to sense the American people get it.  You know, we have a fiscal train wreck before us.  And unless we act, and act deliberately, we're not going to enable our kids to have what we have.  It's plain and simple as that."

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