Today, President Obama recommended a plan to lower the deficit by $4 trillion over 12 years through a mix of tax changes and spending decreases. In a speech delivered at the George Washington University, the president laid out a plan that will cut the deficit by using “three dollars of spending cuts and interest savings for every one dollar from tax reform.” Almost $1.2 trillion of the spending cuts would come from reducing discretionary budgets (provided in appropriations acts).
The president proposed $400 billion in reductions to the defense budget through 2023. This amount is in addition to the $78 billion cut and $100 billion savings and reallocation included in the FY2012-16 plan he presented in February. The president vowed to maintain DOD’s capabilities necessary to meet national security goals even though his new spending goals would hold DoD budgets below inflation into the foreseeable future.
He pointed to the success Secretary Gates had in identifying “waste and duplication” and indicated that more such savings could be made without adversely affecting capabilities. The president will direct DoD’s leaders to “conduct a fundamental review of America’s missions, capabilities, and our role in a changing world.” He said he will decide on specific cuts after the review is completed.
The president’s plan would also cut $700 billion from non-security budgets by 2023. He did not identify any specifics, but said that these savings could be reached by implementing many of the recommendations made by the Fiscal Commission.