Obama sends Congress plan to cut $3 trillion, pay for jobs bill

By Pete Kasperowicz - 09/19/11 12:37 PM ET

President Obama on Monday sent a detailed plan to Congress that he said would help Congress find up to $3 trillion in deficit reduction over the next decade and in part help pay for his $447 billion American Jobs Act.

The $3 trillion in deficit savings is twice the amount that the deficit-reduction supercommittee is required to find in the next three months. However, Obama called on Congress to go well beyond that target, in part to find room for his jobs bill.

"I believe that the Congress should seize the opportunity that this new committee presents, and do much more so that we can put the country on a sustainable fiscal path, which is critical for our long-term economic growth and competitiveness," Obama said in a letter to Congress that was read on the House floor Monday. "For this reason, I am sending to the Congress this detailed plan to pay for this jobs bill and realize more than $3 trillion in net deficit reduction over the next ten years."

Obama said his deficit reduction plan, a summary of which can be found here, is a "balanced one that asks everyone to do their share." His letter said the plan includes $580 billion in cuts and reforms to mandatory programs, including $320 billion in savings from Medicare and Medicaid, which he said are needed to maintain the promise of these programs.

He said $1 trillion would come from drawing down U.S. military forces over the next 10 years and another $1.5 trillion would come from "comprehensive tax reform." That reform, Obama said, should include closing tax "loopholes" and lowering the overall tax rate.

He also said it would "observe the Buffett rule," which is that people earning more than $1 million per year should not pay a smaller portion of their income to taxes than middle-class Americans pay.

"To assist the committee in its work, I also included specific tax loophole closures and measures to broaden the tax base," Obama's letter added. "Together with the expiration of the high-income tax cuts from 2001 and 2003, these measures will be more than enough to reach the $1.5 trillion target."

Republicans have balked at Obama's plan to seek a greater deficit reduction figure by including tax increases, but have said they are willing to work on proposals where there is some agreement in both parties.

After Obama's letter was read on the floor, the presiding officer in the House said the proposal was referred to several House committees. The House then adjourned until 2 p.m. Tuesday.