President Obama's plan to cut trillions more from deficit

President Barack Obama delivers a rare prime-time address to the nation on July 25, 2011, as polarized lawmakers failed to rally behind a plan to address the pending debt ceiling deadline just a week away.

Jeremy Hobson: In a few hours, President Obama will unveil a new plan to slash trillions of dollars from the deficit. This is in addition to the $1.5 trillion in cuts that the Congressional super committee has been tasked with finding.

Let's get the details now on the president's plan from our Washington bureau chief John Dimsdale who is with us live. Good morning.

John Dimsdale: Good morning, Jeremy.

Hobson: Well John, what do we know right now about what the president will propose later this morning?

Dimsdale: Well, we know that most of the president's deficit reduction comes from extra revenues for the government, which means tax increases. There are the things that we've heard in the past, like letting Bush tax cuts for the wealthy expire, and getting rid of breaks for oil and gas companies. One new part of the plan is a special minimum tax for millionaires. He's calling it the "Buffet rule" after Warren Buffet, who said that he and other rich people should pay more in taxes.

Hobson: And that was something that has not gone over terribly well with Congressional Republicans, John. What are the chances of Congress actually going along with the president's plan?

Dimsdale: Yeah, they said this is dead-on-arrival because of the tax increases. And another thing that sticks in their craw is the president is backing away from some spending cuts in Medicare and Social Security that he supported in the past. So, in that sense, this appears to be campaign-related line in the sand -- that the president's going to be the protector of social safety net programs, and he'll look instead for more sacrifices from the wealthy.

And that's not going to be enough for Christopher Bergin at Tax Analysts.

Christopher Bergin: I think most economists you talk to will say its got to be a combination of the two -- spending and taxes. So the president's helped us get half way there. But I think he still has to take the lead -- he is the president after all -- on the spending side.

And one more thing. The President is counting on a trillion dollars savings from troop reductions in Iraq and Afghanistan.

Hobson: Marketplace's John Dimsdale in Washington. Thanks, John.

Dimsdale: Thank you.

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