Barack Obama reveals $3 trillion deficit-cutting plan

President Barack Obama

President Barack Obama has declared a $3.6 trillion plan on Monday to cut budget deficits partly by raising taxes on the rich, but Republicans rejected it as a political stunt and made clear the proposal had little chance of becoming law.

Vowing to veto any plan that relies solely on spending cuts to reduce deficits, the Democratic president's recommendations set the stage for an ideological fight with Republicans opposed to tax increases that will stretch through Election Day 2012.

"I will not support any plan that puts all the burden of closing our deficit on ordinary Americans," Obama said. "We are not going to have a one-sided deal that hurts the folks who are most vulnerable."

Obama has previously shown interest in means-testing — asking high-income seniors to pay more for their medical care.

The White House plan rules out lifting the Medicare eligibility age from 65 to 67, as some Republicans have suggested. Other savings would come from what one senior White House official called "overpayments," signaling that the administration wants to ask medical providers and drug makers to help reduce costs.

Obama's speech reflected a more aggressive defense of Democratic principles after he took a battering in two previous budget battles with Republicans this year, which helped drive his approval rating to new lows.

Most Americans say they are unhappy with Obama's economic leadership, and the president's re-election hopes could hinge on his ability to convince voters that Republicans represent the rich, not the middle class.

On Monday, he repeatedly said all Americans must pay their "fair share" of taxes, and he sharpened the difference between his vision for America and that of Republicans in a speech meant to regain support among core supporters who have said Obama has failed to stick to liberal principles.

Republicans have consistently opposed any measures resembling tax hikes, saying they will hurt the struggling economy by increasing the burden on job-creating businesses. Republican leaders stuck to that position on Monday, quickly rejecting Obama's plan.