Obama lays out $3 tril. debt reduction plan

President Barack Obama has laid out a new plan to reduce the US budget deficits partly by raising taxes on wealthy Americans.

Obama announced the plan on Monday which aims to cut the fiscal deficits by 3 trillion dollars over the next decade.

The plan includes a 1.5-trillion-dollar reduction through tax increases on the rich and oil companies in the country.

1.1 trillion dollars in savings in military spending is expected to come from withdrawing US forces from Iraq and Afghanistan.

The plan also includes some deficit reduction through health care reform which the Democratic Party has been reluctant to support.

Obama said that the country has to cut what it can't afford in order to pay for what really matters.

Senate Minority Leader Mitch McConnell said in a statement that veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth or even meaningful deficit reduction.

Differences between the Democratic Party and the Republican Party over deficit reduction could affect congressional debates on bills related to a new stimulus package.

Obama is aiming for an early enactment of the bills.