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Obama speech: His four-part plan to cut $4 trillion from federal deficits

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Obama also called for changes in some mandatory spending programs, such as agricultural subsidies and the federal pension insurance system. In that category, his plan projects savings of $360 billion by 2023.

And on Social Security, a particularly sensitive issue among his Democratic base, Obama did not offer specific reforms, just a repeat of his call “to strengthen Social Security for future generations.” He stated that while the program is “not the cause of our deficit, it faces real long-term challenges in a country that’s growing older.”

The White House's budget projections earlier this year suggested that cumulative annual federal deficits over the next 10 years (to 2021) would amount to $7.2 trillion. The nonpartisan Congressional Budget Office last month said the White House's figures might underestimate the 10-year deficits by $2.3 trillion.

A 'fail safe' debt trigger

Obama’s deficit-reduction framework aims to put the nation’s accumulated debt, currently at $14 trillion, on a “fail-safe trigger,” so that by the second half of the decade, it is on “declining path” as a share of US gross domestic product. To do that, he is calling on Congress to enact a “debt fail safe” that will trigger across-the-board spending reductions and revenue increases via the tax code, if the projected ratio of debt to GDP has not begun to decline by 2014.

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