Obama Proposes New Taxes On Top Earners To Slash Deficit

President Obama made an impassioned appeal to Republican lawmakers to support his latest deficit reduction plan, details of which had already been released to the press by the time he took the podium on Monday morning.

(Click here for the White House’s summary of the plan)

Speaking in the White House Rose Garden, the president said his proposal represents a balanced approach to reigning in the nation’s bloated debt level while at the same time providing a shot in the arm to a fledgling economy.

“It’s a plan,” he said, “that reduces our debt by more than four trillion dollars, and achieves these savings in a way that is fair, by asking everybody to do their part so that no one has to bear too much of the burden on their own.”

Obama added that the measure would fully offset his jobs bill, a $447 billion plan that includes a mix of tax cuts and tax credits and spending on public works projects.

Like everything these days, the biggest challenge for the president will be getting Congress to support the plan. Republicans, led by House Speaker John Boehner (R-Ohio) and House Budget Committee Chairman Paul Ryan (R-Wis.), have already drawn a line in the sand over tax increases, which happen to comprise $1.5 trillion of the total savings found within Obama’s measure.

In a statement put out on Sunday, Ryan called the plan an example of “class warfare” — referring to Obama’s idea to raise tax rates on those making more than $250,000 per year. The president’s plan also includes the so-called “Buffett rule,” a nod to billionaire investor Warren Buffett, who has come out in support of raising investment taxes on those making more than $1 million per year.

The president, in his remarks this morning, pushed back strongly against Ryan’s assertion.

“I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare,” he said. “I think it’s just the right thing to do.”

Republicans will also likely accuse Obama of using gimmicks, such as counting $1 trillion in new cuts from ending the wars in Iraq and Afghanistan, to inflate total savings. However, as the Associated Press noted on Monday, Ryan included those future savings in his budget proposal earlier this year.

It’s Official: Warren To Help Lead New Consumer Protection Agency

President Barack Obama ended weeks of speculation on Friday by announcing that consumer advocate Elizabeth Warren would be tasked with helping launch the new consumer watchdog agency proposed within the financial reform law passed earlier this year.

Warren, 61, was born and raised by blue-collar parents in Oklahoma. She entered college at the age of 16 on a debate scholarship and eventually earned a law degree from an affiliate of Rutgers University. She joined the faculty of the Harvard Law School in 1992.

Warren is also credited as being the brainchild of the Bureau of Consumer Financial Protection. This, along with her history of butting heads with credit card companies and pay-day lenders alike, made choosing her an easy decision for Obama.

“Secretary Geithner and I both agree that Elizabeth is the best person to stand this agency up. She was the architect behind the idea for a consumer watchdog, so it only makes sense,” said the president from the Rose Garden on Friday. “I have known Elizabeth Warren since law school. She’s a native of Oklahoma. She’s a janitor’s daughter who has become one of the country’s fiercest advocates for the middle class.”

Officially, Warren will serve as a special advisor to both the president and Treasury Secretary Tim Geithner. This allows her to sidestep a potentially lengthily confirmation process. It also means that Warren is unlikely to be appointed the agency’s director since that position would require a Senate confirmation. One of her tasks in the coming months will be to find someone to lead the agency.

The president’s decision to tap Warren has been criticized roundly by Republicans who say the move lacks transparency. Sen. Bob Corker (R-Tenn.) wrote a letter to Obama this week asking him to reconsider his choice.

“I strongly believe the intent of the Dodd-Frank legislation was to have the head of this bureau go through the nomination, vetting and confirmation process,” Corker wrote. “This particular position, one that was created just months ago, is unprecedented in the nature of its unfettered and unchecked authorities, which makes the confirmation process even more important to the interests of the American people.”

Meanwhile, the top Republican on the House Oversight Committee, Darrell Issa (R-Calif.), lamented the president’s decision to exempt Warren from congressional review.

“By giving Professor Warren responsibilities at both the White House and the Treasury Department, he is undermining Congressional oversight while giving her substantive authority over the CFPB.  This is unprecedented.”

Pair Of GOP'ers Repeat Calls To End Fannie And Freddie Bailouts

Two prominent House Republicans called on the Obama administration Tuesday to swiftly address the future of mortgage lenders Fannie Mae and Freddie Mac.

“With the national debt at nearly $14 trillion and unemployment still near 10 percent, the administration has yet to stop the bailouts of Fannie Mae and Freddie Mac,” House Republican Conference Chairman Mike Pence (R-Ind.) said in a statement. “It is past time to rid the American taxpayer of the liabilities of these financial institutions once and for all.”

Treasury Secretary Tim Geither and Housing and Urban Development Secretary Shaun Donovan held a listening session with top private lending officials on Tuesday that was expected to address the long-term plan for the two government sponsored enterprises.

Darrell Issa (R-Calif.), the top Republican on the House Oversight Committee, said the two GSE’s should stop benefitting from taxpayer dollars, and called on the administration to investigate Fannie Mae’s dealings earlier this decade with other lenders.

“As our nation marched down the path leading to a crippling financial crisis, Fannie Mae should have been trying to cool off risky sub-prime lending and protect the economy from a volatile housing bubble,” said Issa. “The reality is that as Fannie-Freddie executives were accepting Countrywide VIP loans, they were also developing a strategy to form a partnership with Countrywide with the goal of using that relationship to influence the mortgage industry and policymakers.”

Geithner: Changes Coming To Fannie Mae And Freddie Mac

The two-headed mortgage lending monster known as Fannie Mae and Freddie Mac will more than likely undergo serious reforms next year, according to U.S. Treasury Secretary Tim Geithner.

The pair of GSE’s, both of which required federal bailouts in 2008 after faltering as a result of the housing collapse, are headed for certain changes when the Obama administration puts forth a plan to overhaul the industry in early 2011.

Geithner told a panel of executive lending officers on Tuesday that the administration “will not support returning Fannie and Freddie to the role they played before conservatorship, where they fought to take market share from private competitors while enjoying the privilege of government support.”

“We will not support a return to the system where private gains are subsidized by taxpayer losses,” he added.

Before being placed under total government control in 2008, the twin lenders ran into trouble, stemming mainly from involvement in the subprime mortgage movement in the early 2000’s. Speculators argue that entering that market under federal directives to increase home ownership is what caused Fannie and Freddie to become vulnerable when the skyrocketing housing bubble burst around 2006.

Geithner told the panel that he and Department of Housing and Urban Development (HUD) Secretary Shaun Donovan have been presented with a wide array of options for reforming the system, from nationalization of the lending market to complete government withdrawal.

However, Geithner admitted that as of today, a solution has not yet been reached.

“It’s safe to say there’s no clear consensus yet on how best to design a new system.”

Administration Officials Tout New Report On Status Of Medicare

The Democrats’ sweeping healthcare reform law will extend the life of the Medicare hospital insurance fund by 12 years, according to a new government report on the status of Medicare and Social Security.

According to U.S. Treasury Secretary Tim Geithner, the nation’s Medicare trust fund should stay solvent until 2029. In addition, the healthcare overhaul, passed earlier this year, improves the long-term outlook for the Social Security trust fund, which analysts previously warned will be depleted by 2037. In 2010, Social Security expenditures will exceed receipts for the first time in more than 25 years.

While the short-term prognosis for the two big entitlements is slightly troublesome, Geithner said the Medicare figures are encouraging.

“These are very, very substantial improvements,” he said during a briefing on Thursday.

U.S. Health and Human Services Secretary Kathleen Sebelius added that the “outlook for Medicare has improved greatly,” as a result of the new healthcare law.

Sebelius, however, said that Congress must work on finding a permanent solution to the way in which physicians that accept Medicare are reimbursed by the federal government. Congress recently extended the “doc-fix” as it is known, but officials from the Centers for Medicare and Medicaid Services (CMS) have concluded that continued temporary fixes will in the long run negate some of the savings produced by the Affordable Care Act.