TPM provides the highlights of Obama's new deficit reduction plan:
A debt failsafe that will be triggered if the debt-to-GDP ratio hasn’t stabilized, and begun to decline by mid-decade. This will include automatic spending cuts, and reductions in tax subsidies, but no tax increases. Social Security, Medicare, and low-income programs will be exempted. It will not tie the government’s hands in the event that an economic downturn requires fiscal stimulus.
Cuts to discretionary spending, compatible with those in the Bowles-Simpson recommendations.
Defense spending cuts, contingent on a thorough review conducted by Secretary Robert Gates, the Joint Chiefs of Staff, and Obama himself, and savings generated by winding down operations in Iraq and Afghanistan.
Strengthening the Independent Payment Advisory Board, created by the health care law to recommend and implement cost savings reforms to hold down the cost-per-Medicare-patient.
Simplifying the formula for providing federal matching funds to states for Medicaid, which would automatically increase in the event of a recession
This is a big one — Obama will propose using Medicare’s purchasing power to reduce prescription drug costs for seniors
Reductions in agricultural subsidies
Comprehensive tax reform, which reduces loopholes, simplifies the system, allows the Bush tax cuts for high-income earners to expire, and reduces the corporate tax rate.
The Republicans have already dismissed many of Obama's proposals and will only consider the conservative elements of the package. This leads to the question why Obama even bothers to cater to GOP demands in the first place. Why not present a package that might actually work (ie. one with adequate job stimulus spending) and demand Republicans meet him half way? Instead, he has taken his traditional centrist route that will get thrown back in his face leaving him with Republican policies doomed to fail.