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U.S. President Barack Obama speaks about fiscal policy at George Washington University on April 13, 2011 in Washington D.C. President Obama laid out his plan for deficit and debt reduction right. - 

Tess Vigeland: Read his lips: No renewal of Bush-era tax cuts. That was the word today from the White House as President Obama laid out his proposal for reining in government deficits. The president called for cuts in domestic and defense spending, as well as more savings in health care programs like Medicare. More on that in a minute.

But he also said tax increases should be on the table. Even before the president spoke, Republican leaders called talk of tax hikes a non-starter. Are they really?

Marketplace's John Dimsdale has the latest from Washington.

John Dimsdale: The president called for cutting $4 trillion over a dozen years. The plan includes one element not in Republican Paul Ryan's budget proposal: more revenue. The president would limit income tax deductions and let the Bush tax cuts expire for those earning more than $250,000 a year.

Speaking to students at George Washington University, Obama said he and Warren Buffett don't need another tax cut.

Barack Obama: Not if we have to pay for it by making seniors pay more for Medicare or by cutting kids from Head Start or by taking away college scholarships that I wouldn't be here without and that some of you would not be here without.

The president said more sacrifices from the wealthy will ensure a better standard of living for everyone. Economist Diane Swonk at Mesirow Financial says it's legitimate for tax hikes to be part of the national conversation because without them, we can't bring down deficits.

Diane Swonk: Anyone who's ever balanced their own household budget knows you gotta hit it from both sides.

Swonk says Congress has cut programs and raised taxes at the same time before, under President Ronald Reagan. Tax reforms then eliminated special interest deductions and closed loopholes.

Swonk: Yet the last 25 years, it's been lobbyists putting all those deductions back in again.

She says simplifying the tax code and eliminating loopholes will encourage job creation and productivity. And that will help afford retirement and health care benefits in the future.

In Washington, I'm John Dimsdale for Marketplace.