Obama Kicks Off 2012 Political Season With Debt-Reduction Speech

Opening the door on the 2012 presidential campaign, President Barack Obama laid out his plan for reforms to the budget, tax code, entitlements and spending in a speech Wednesday afternoon. Citing the example of former Democratic Speaker of the House Tip O'Neill and Republican President Ronald Reagan, who worked together to save Social Security in the early 1980s, Obama laid out hope that the two parties could come together to find a way to reform the debt and deficit. Obama's plan rests on four main pillars: Reforming entitlements, raising taxes on the wealthy, reducing defense spending, and reducing overall discretionary spending. He called for doing all these things with an eye on keeping our American priorities of fairness squarely in our minds. Overall, his plan cuts $4 trillion in deficit in 12 years. For the tax code, Obama called for reforming the tax code to benefit the middle class rather than the wealthy, saying that "We cannot afford one trillion dollars in tax cuts for every millionaire and billionaire in our society," referring to the Bush-era tax cuts of the last decade. Obama also called on Congress to not seek to turn Medicare into a voucher program, calling it an unfair system that would saddle the elderly and poor with rising health care costs they would not be able to pay. Instead, Obama wants to affix a cap to Medicare spending, and use the size and might of the government's pool of recipients to negotiate lower prices and lower health care costs throughout the system. Overall, Obama warned of shocking the system by enacting too much reform, too quickly, arguing instead that a slower approach would balance the needs of a recovering economy with our debt-load realities. Be sure to follow Benzinga's coverage of the news through the afternoon and into tomorrow to see how the markets react to President Obama's plan, and the inevitable Republican and Democratic responses.