[Audie Cornish:] I'm Audie Cornish. Tomorrow, President Barack Obama will lay out his new plan for reducing the federal deficit. His proposal will also include specific recommendations to the bipartisan deficit supercommittee on how to offset the cost of his $447 billion jobs plan. Yesterday, in the president's weekly address, he again promoted his jobs bill and offered a brief preview of how he plans to tackle the debt.
[P:] On Monday, I'll lay out my plan for how we'll do that, how we'll pay for this plan and pay down our debt by following some basic principles: making sure we live within our means and asking everyone to pay their fair share.
[Audie Cornish:] For more, we're joined by Mara Liasson, NPR's national political correspondent. Mara, what do we know about what the president will say tomorrow in the Rose Garden?
[Mara Liasson:] Well, what we know is that he'll offer more than $1.9 trillion in spending cuts and new taxes. We also know that he will include a new higher tax rate for millionaires. This is something that he will call the Buffett rule. That's for Warren Buffett, the billionaire who has famously criticized a tax system that allows him to pay a smaller percentage of his income in federal taxes than his secretary. We know he won't touch Social Security. What we don't know and what we're waiting to find out is what he'll say about Medicare and other entitlement programs. You know, when he and Speaker Boehner negotiated the so-called grand bargain in the spring of course, it didn't work out but they were talking about, among other things, raising the retirement age for Medicare from 65 to 67.
[Audie Cornish:] There was some talk of resurrecting the so-called grand bargain. Any chance that President Obama will bring back some of the things that he and House Speaker John Boehner discussed a few weeks ago during that debt ceiling debate?
[Mara Liasson:] Well, that's what we're waiting to find out. However, Speaker Boehner gave a speech on Thursday and it certainly sounded like he was giving up on the grand bargain.
[Audie Cornish:] It's a very simple equation. Tax increases destroy jobs and the Joint Committee is a jobs committee. Its mission is to reduce the deficit that is threatening job creation in our country. And we should not make its task harder by asking it to do things that will make the environment for job creation in America even worse.
[Mara Liasson:] That was House Speaker John Boehner speaking at the Economic Club of Washington on Thursday. As you can hear, he doesn't want any tax hike of any sort, even though 36 senators are telling the supercommittee that everything should be on the table. The fact of the matter is Republicans think cutting government will fix the economic problem; Democrats think some government support is needed.
[Audie Cornish:] Mara, the president seems to be making two arguments at the same time. On the one hand, he's arguing for short-term stimulus, like infrastructure spending, and then at the same time he wants long-term deficit reduction. What kind of case is that to make?
[Mara Liasson:] Well, it's a hard case to make 'cause they sound contradictory. But it's what most economists and the CBO director, Doug Elmendorf, says you have to do something short-term for the economy, which would mean more spending or tax cuts and then you have to put in place some kind of credible long-term plan to cut the deficit over time. And the analogy that's been given for this is the economy is like a house with the attic on fire that's the current economic crisis and the basement is flooded. That's the long-term deficit. You have to put the fire out first or else the house will burn down. Putting out the fire means the basement is going to get a little more flooded. But at the same time you're putting out the fire, you should be investing in a sump pump. If you invest in some kind of long-range plan to fix that flood...
[Audie Cornish:] I love where this is going. You're going to take water from the basement and bring it up to the attic. [Laughing]
[Mara Liasson:] Something like that. That's right.
[Audie Cornish:] Now, this past week, President Obama hit the road kind of in campaign mode to battleground states Virginia, North Carolina, Ohio. Any signs that any of this is working?
[Mara Liasson:] Not yet. A Bloomberg poll this week showed about 50 percent of Americans thinks the president's job plan won't work. There are many parts of the president's plan that are popular with the public, but it's very hard to make this happen because people now see him as weak and ineffective, unable to get his programs through even if they agree with the substance of them.
[Audie Cornish:] This has just been bad news and more bad news for President Obama, it sounds like.
[Mara Liasson:] This week was a very tough week. The Democrats lost two special elections one of them was in Nevada, a Republican seat that wasn't too surprising but the other one was in New York in a three-to-one Democratic district. Now, the idea that President Obama could be a one-term president has really entered the political bloodstream, and it's having a big psychological effect on Democrats who are very gloomy. And that makes it harder for someone like Mitt Romney to argue that Rick Perry is too conservative to win in 2012. Because right now it looks like, from the Republican point of view, that almost anyone could beat the president.
[Audie Cornish:] Mara Liasson, NPR's national political correspondent. Mara, thanks so much.
[Mara Liasson:] Thank you, Audie.