President Barack Obama will offer a new plan to reduce the federal deficit by about $3.6 trillion over a decade, almost half of which would come from tax increases, people familiar with the proposal said. While some pieces of Mr. Obama's plan may be agreed upon, Congress is unlikely to pass the package as proposed given Republican resistance to tax increases. Instead the plan marks the White House's opening salvo in negotiations over the next two months on how to reduce the deficit. It is the president's fourth package of deficit-reduction ideas this year.
Mr. Obama's plan, which will be offered to the lawmakers charged with negotiating a deal by Nov. 23, will include $1.5 trillion in tax increases primarily on wealthy Americans and corporations, people familiar with the proposal said. It will lay out principles for an overhaul of the tax code.
The president will also propose changes to Medicare and Medicaid that would reduce the deficit by about $300 billion over 10 years. He won't propose increasing the Medicare eligibility age, people familiar with the plan said, and won't include changes to Social Security.
Congressional Democrats have called for tax increases to be part of any deficit-reduction effort and have campaigned to maintain the country's major entitlement programs, and their wishes appear to be reflected in the president's outline.
A senior administration official also said Mr. Obama will make clear that he will veto any bill that makes changes to Medicare without tax increases on the wealthy.
Mr. Obama will sound a populist tone, with the inclusion of a so-called Buffett Rule, named after billionaire Warren Buffett, which would prevent millionaires from paying lower tax rates than middle-class Americans.
The plan, which Mr. Obama will unveil Monday in remarks at the White House, will be submitted to a congressional supercommittee that was created to craft a deficit-reduction plan of at least $1.2 trillion over 10 years. The committee's efforts follow on the more than $900 billion in spending cuts that were part of a deal Mr. Obama made with congressional Republicans in August.
"I think this is less 'Let's be the grownups in the room and start at the 50 yard line,' and more 'Let's start on our side of the field,'" said Jared Bernstein, former economic adviser to Vice President Joe Biden.
Mr. Obama's plan is meeting resistance from Republicans, who argue that raising taxes would harm, not help, the economy.
GOP leaders on Sunday specifically rejected the proposal Mr. Obama named after Mr. Buffett, who has pushed the federal government to raise the tax rates paid by the wealthiest Americans.
"It's a bad thing to do in the middle of an economic downturn," Senate Minority Leader Mitch McConnell (R., Ky.) said on the NBC program "Meet the Press."
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