WASHINGTON, April 13 (UPI) -- U.S. President Barack Obama has called for tax increases on higher-income Americans and a "fail-safe" mechanism to prompt automatic spending cuts to reduce the country's surging debt levels.
"We cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society," Obama said in a speech Wednesday at George Washington University. "And I refuse to renew them again."
Republican criticism was quick, with House Budget Committee Chairman Paul Ryan, R-Wis., calling the president's speech a decision "to pour on the campaign rhetoric."
Obama said his plan would achieve $4 trillion in deficit reductions over 12 years, with annual shortfalls dropping to 2.5 percent of economic output in 2015. This year's federal budget deficit is projected to reach $1.4 trillion, about 10 percent of the economy, the Congressional Budget Office said last month, projecting a cumulative deficit of $6.7 trillion over the next decade.
The president's fiscal policy address came nearly a week after Congress compromised on a budget for the current year at the 11th hour to stave off a government shutdown and to fund federal services until September while cutting more than $38 billion.
Obama pitched the idea of a fail-safe trigger that would automatically cut spending and raise taxes in 2014 if projections didn't show the debt level stabilizing. The trigger would bar government arrears from exceeding 2.8 percent of economic output, though administration officials said the exact fail-safe design doesn't exist.
"My plan will require us to come together and make up the additional savings with more spending cuts and more spending reductions in the tax code," Obama said. "That should be an incentive for us to act boldly now."
The president's remarks also follow a Republican proposal delivered by Ryan, which the congressman said would slash $6 trillion in spending over 10 years while lowering corporate and individual tax rates.
The president rejected the GOP proposal as not serious and said the congressman's plan to cap spending on Medicaid healthcare for the poor and transition Medicare to a voucher-like system would change "the basic social compact in America."
"They want to give people like me a $200,000 tax cut that's paid for by asking 33 seniors to each pay $6,000 more in health costs?" he said. "That's not right and it's not going to happen as long as I'm president."
Obama echoed the promise made during his 2008 campaign to let income tax rates increase for wealthier Americans. They are set to rise in 2012 after the president agreed to an extension in December.
Republicans have called any tax hikes a non-starter for a budget agreement and House Majority Leader Eric Cantor, R-Va., said the president's commitment to allowing the taxes of top earners to rise was akin to "waging class warfare."
"This was not a plan. This was a speech," Ryan said.
Some experts say maintaining government commitments like Social Security while trimming the nation's red ink requires higher taxes for more than the wealthiest citizens.
"The administration is in a difficult position because of the president's commitment not to support increases in taxes below $250,000," Henry Aaron, a senior economics fellow at the Brookings Institute, said in an interview before the speech. "The American public needs to be told that taxes on the middle class have to go up in order to deal with this deficit and to sustain some pretty solemn and valuable commitments."
The country's total debt, including that held within the U.S. government, stands at $14.3 trillion, about 97 percent the size of the economy.