President Obama and congressional Republicans are squaring off again in a budget fight, this time over Obama's new plan to slice the deficit by $3.6 trillion over 10 years. The plan, released on Sept. 19, includes tax hikes to get more revenue from wealthy taxpayers and modifications to Medicare and Medicaid. Congressional Republicans blasted the proposal, signaling a deal will be hard to achieve.

The legislative package also would cover the $447-billion cost of Obama's Jobs for America Act, unveiled on Sept. 9 (ENR 9/19 p. 9), which includes $105 billion for transportation, schools and other infrastructure.

GOP lawmakers have balked at raising taxes. On the other hand, Obama pledged to veto any deficit-cutting legislation that changes Medicare benefits but doesn't tax the wealthy and corporations.

The proposal will go to the joint congressional “supercommittee,” established by the Budget Control Act and charged with cutting the deficit by at least $1.2 trillion over 10 years. Obama's $3.6-trillion plan is larger and includes $1.5 trillion in tax increases; $580 billion in cuts to “mandatory” programs, such as agricultural subsidies and federal workers' benefits; and $430 billion from lower interest on the federal debt; further, it assumes $1.1 trillion in savings from the U.S. military drawdown in Afghanistan and Iraq. It proposes no changes to Social Security.

But GOP leaders quickly criticized Obama's proposal. Senate Minority Leader Mitch McConnell (R-Ky.) said, “Veto threats, a massive tax hike, phantom savings and punting on entitlement reform is not a recipe for economic or job growth—or even meaningful deficit reduction.”