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U.S. President Obama to propose $1.5-trillion in new taxes Add to ...

President Barack Obama, in a rallying call to his Democratic base, will vow on Monday to veto any cuts in Medicare if Congress fails to raise taxes on corporations and wealthy Americans to curb the U.S. deficit.

Mr. Obama’s recommendations to a congressional “super committee” would deliver deficit savings of more than $3-trillion over the next decade, his aides said, with roughly half of those savings coming from higher tax revenues.

Under fire from Democrats to defend Medicare and Medicaid health-care programs as he seeks to galvanize supporters ahead of the election next year, Obama will demand that all Americans share the burden of controlling the budget.

“He will veto any bill that takes one dime from the Medicare benefits seniors rely on without asking the wealthiest Americans and biggest corporations to pay their fair share,” a senior administration official told reporters.

Medicare, for elderly and disabled Americans, and Medicaid for the poor, are viewed by analysts as the biggest contributors to the long-term U.S deficit.

The so-called super committee of six Democrat and six Republican lawmakers is seeking at least $1.2-trillion in new budget savings by Nov. 23. That is on top of $917-billion in 10-year savings agreed in an August deal to raise the U.S. debt limit.

Mr. Obama will lay out his recommendations in the White House Rose Garden at 10.30 a.m. on Monday.

“In his remarks tomorrow, the president will make clear he is not going to support any plan that asks everything of some Americans, nothing of others,” the official said.

The plan will include a “Buffett Rule,” named after billionaire investor Warren Buffett, that would set a minimum tax rate for anyone making more than $1-million a year.

A clearly populist step, the tax would only apply to a tiny minority of the millions of Americans who file tax returns every year. But White House aides said it would set a standard of fairness that would yield more revenue if it became law.

Congress can ignore his suggestions. With the House of Representatives controlled by Republicans who oppose any tax hikes, they are likely to be declared dead on arrival.

Mr. Obama’s opening bid to find deficit savings by Dec. 23 to head off painful automatic cuts will be under close scrutiny.

Investors want evidence that the political process in Washington is capable of tackling the towering U.S. deficit and the country’s mounting debts, after ratings agency Standard and Poor’s cut the U.S. AAA rating in August.

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