Obama to pitch $3 trillion more in deficit cuts

President Obama will unveil a plan this morning to reduce federal deficits by more than $3 trillion over 10 years, about half of which would come from higher taxes on upper-income Americans and corporations.

Obama -- who has clashed repeatedly with congressional Republicans over higher taxes -- will also pledge to veto any debt plan that cuts Medicare while not demanding more revenue from the wealthy, two senior administration officials said.

The deficit-reduction plan to be submitted to a special congressional committee would cut $1.5 trillion through tax increases; $1.1 trillion through winding down the wars in Iraq and Afghanistan; $580 billion from reductions in entitlement programs such as Medicare and Medicaid; and $430 billion from reduced interest costs.

The president will formally announce the plan during a 10:30 a.m. speech in the White House Rose Garden. He'll pitch it as his vision for deficit reduction combined with the need to invest in jobs, education, innovation and infrastructure -- not his effort to compromise with Republicans.

More details will follow -- as will a largely negative reaction from Republicans opposed to higher taxes on anyone.

Obama's proposed tax changes would include ending former President George W. Bush's tax cuts for upper-income Americans beginning in 2013. Obama also would eliminate tax breaks and loopholes that benefit oil and gas companies, hedge fund managers, and corporate jet owners -- ideas that have previously been rejected by congressional Republicans. His plan to limit deductions and exclusions for people with income above $250,000 has even been rejected by many Democrats in the past.

House Speaker John Boehner said last week that tax increases should be off the table for the 12-member "supercommittee" tasked with finding at least $1.2 trillion in deficit cuts. At the same time, however, he said neither side should draw lines in the sand.

Together with about $1 trillion in defense and domestic spending cuts already signed into law last month, Obama's plan would reduce future deficits by $4.4 trillion over 10 years while paying for his $447 billion job-creation plan.

The revamped Obama deficit plan features what senior administration officials call a new "Buffett Rule:" No millionaire should pay a lower percentage of taxes on their income than middle-class Americans.

The proposed rule is named for billionaire investor Warren Buffett, who has said that various tax breaks enable him to pay a lower percentage of taxes than many of his employees.

Senate Republican leader Mitch McConnell said the idea of a millionaire's tax has been rejected before, even by Democratic-run Congresses that also opposed higher taxes in general.

"It's a bad thing to do in the middle of an economic downturn," McConnell said on NBC's Meet The Press.

The $580 billion in proposed program cuts include projected savings in Medicare ($248 billion) and Medicaid ($72 billion). Nearly all the Medicare cuts, and all the Medicaid cuts, would spare beneficiaries. Obama will not propose raising the Medicare retirement age gradually to 67, as he offered to do earlier this year during negotiations with Boehner.

Instead, virtually all the Medicare cuts likely would come from the profit margins of doctors, hospitals, drug companies and insurers -- what the White House calls "reducing overpayments."

The special congressional committee is scheduled to report to Congress by Nov. 23. Then Congress is required to vote up or down on the plan by Dec. 23. If it falls through, $1.2 trillion in automatic budget cuts over 10 years would begin to take effect.

Contributing: Richard Wolf