Chicago reacts to Obama deficit plan; GOP rejects it

September 19, 2011 6:59:10 PM PDT
President Barack Obama presented a $3 trillion package to reduce the nation's deficit, but it was rejected by Republicans, who say it won't grow the economy.

Republicans are rejecting a major part of President Obama's plan that involves raising taxes on the very wealthy, something the president says is not class warfare but "math."

Tijuana Smith owns a small accounting firm. She and hundreds of other small business owners attended a seminar Monday to get tips on how to do business with government. Smith says she has no problem with government taxing the rich.

"I don't even think it is going to affect the millionaire, because they have so much money they're not going to feel it anyway. Maybe they won't be able to buy a new boat or an island or new house or buy that plane, but hey, you got to somehow or another come out of this," Smith said.

Higher taxes for millionaires and corporations is a major part of Mr. Obama's deficit reduction plan, which includes $1.5 trillion in new revenue, repealing the Bush tax cuts for couples making more than $250,000, placing limits on deductions for the wealthy and closing some corporate loopholes.

Bob Roig owns a small disaster proof housing business. He disagrees with the higher tax approach.

"I think raising taxes is not the answer because when you remove money from people's pockets, they're less apt to spend it, and I think in the long run, that hurts the economy more," Roig said.

Illinois Republicans believe raising corporate taxes kills jobs.

"Since January, we have lost 100,000 jobs," Illinois Republican Party Chairman Pat Brady said.

But Democrats say, it's time for the wealthy to pay their fair share.

"This is the only time in American history that we have been to war, not once but twice, and we've actually reduced taxes on richest sector of America," Luis Gutierrez said.

Mr. Obama's plan also calls for $1 trillion in savings by withdrawing troops in Iraq and Afghanistan and $580 million in mandatory benefit programs. The plan also calls for cuts in government spending including reductions in medicaid and medicare - but not raising the age of eligibility.

However political experts say the higher tax plan is the key to motivating the president's Democratic Party base.

"When people are suggesting that Hillary Clinton should be the candidate, that has got to get your attention," Paul Green, Roosevelt University, said.

There is talk that Mr. Obama may be painting the Republicans as the party of the rich as part of a strategy for winning re-election. The president vowed he will veto any cuts to Medicare if Congress does not approve a tax hike for the wealthy and corporations. Experts say this plan has very little chance of getting through Congress.

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