Obama speaks on debt issues at George Washington

President Barack Obama gave a speech Wednesday at George Washington University about his plans to stop the United States' rapidly increasing debt problem.

Obama began with the plan proposed by the Republican Party, which called for a reduction in spending on Medicare and Medicaid, social security and unemployment. He said that America would lack what it takes to be a great country without these commitments. Early in the speech, he made it clear that keeping these institutions alive was his priority. But what must be given up in order for this to happen?

By 2025 the taxes that will be collected will only serve to cover Medicare, Medicaid, social security and unemployment. Due to the high costs of these programs, borrowed money would have to pay for every remaining penny spent by the government. The Republicans' proposed plan of action, which encourages reform of the healthcare and social security systems, would cause 50 million Americans to lose their means of living and insurance.

We cannot afford to invest nationally in education, healthcare or retirement funds, Obama argued, and yet the government somehow manages to give $1 trillion worth of tax breaks to the wealthy. He stated that everybody will make sacrifices going ahead, but “those who have benefited most from our way of life can afford to give a bit more.”

Obama’s proposed a four-step plan to reduce the national deficit by four trillion dollars over the next twelve years. The first step in this plan is to keep annual domestic spending low, as agreed upon by both political parties. This step alone will save $750 billion by government spending and investment cuts.

The second step proposed that spending on national defense should be reduced. Obama did not mention where exactly the spending cuts would occur in either of these cases.

The third step in this plan is to reduce healthcare spending by reducing the cost of healthcare itself. By speeding generic drugs to the market and holding the government more responsible for Medicare and Medicaid, these reforms would save the country $500 billion by 2023 and another one trillion over the next decade, he said.

The last step in this plan is to reduce tax expenditures by getting rid of itemized deductions and tax cuts for the top 2 percent of the nation. By reforming the individual and corporate tax code, we can save $2 trillion in spending cuts. Of course, this includes letting the Bush tax-cuts expire—another extension of the Bush tax cuts is “not going to happen” as long as he is the President.