Obama announces debt plan built on taxes for rich

In a blunt rejoinder to congressional Republicans, President Barack Obama called for $1.5 trillion in new taxes Monday, part of a total 10-year deficit reduction

WASHINGTON - In a blunt rejoinder to congressional Republicans, President Barack Obama called for $1.5 trillion in new taxes Monday, part of a total 10-year deficit reduction package totaling more than $3 trillion. He vowed to veto any deficit reduction package that cuts benefits to Medicare recipients, but does not raise new revenues.

"We can't just cut our way out of this hole," the president said.

The president's proposal would predominantly hit upper-income taxpayers, but would also reduce spending in mandatory benefit programs, including Medicare and Medicaid, by $580 billion. It also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.

Long Island Association economist Dr. Pearl Kamer says a tax on the rich could hit some local residents hard since average incomes are higher here than in the rest of the country. But, she says both tax reform and spending cuts are needed to get the nation's financial house in order.

"Until you have a general overhaul of the tax programs and the entitlement programs, we are not going to be able to do very much about the deficit," she says. AP wire services were used in this report.

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