"We can't just cut our way out of this hole," Obama said during a Rose Garden speech on the national debt that tops $14.5 trillion.
"If we're going to make spending cuts, many of which we wouldn't make if we weren't facing such large budget deficits, then it's only right that we ask everyone to pay their fair share," Obama said.
The president also said his debt plan will finance the $447 billion jobs bill he unveiled earlier this month.
The deficit-reduction plan to be submitted to a special congressional committee would cut $1.5 trillion through tax increases; $1.1 trillion through winding down the wars in Iraq and Afghanistan; $580 billion from reductions in entitlement programs such as Medicare and Medicaid; and $430 billion from reduced interest costs.
In discussing the plan, Obama criticized House Speaker John Boehner, R-Ohio, for ruling out higher taxes to pay down the debt, the task of the special "supercommittee" created by Congress after the summer battle with Obama over raising the debt ceiling.
Obama pointed out that the tax issue is the reason he and Boehner were unable to reach a "grand bargain" over the summer that would have cut the debt by more than $4 trillion over a decade.
Instead, Obama and congressional Republicans struck a deal to cut $1 trillion in defense and domestic spending, while lifting the debt ceiling than then stood at $14.3 trillion. That agreement also produced the supercommittee assigned to look for further debt reduction, including the revamped plan now submitted by Obama.
Boehner, commenting on Obama's speech Monday, said he could not strike a bigger deal with Obama because of "this administration's insistence on raising taxes on job creators."
"It is evident today that these barriers remain," Boehner said.
Obama's new proposal to cut another $3 trillion or more from the debt includes $1.1 trillion from ending the wars in Iraq and Afghanistan.
Another $580 billion in proposed program cuts include projected savings in Medicare ($248 billion) and Medicaid ($72 billion). Nearly all the Medicare cuts, and all the Medicaid cuts, would spare beneficiaries. Obama will not propose raising the Medicare retirement age gradually to 67, as he offered to do earlier this year during negotiations with Boehner.
Instead, virtually all the Medicare cuts likely would come from the profit margins of doctors, hospitals, drug companies and insurers -- what the White House calls "reducing overpayments."
But must of the political attention is focused on Obama's tax proposals.
Obama's proposed tax changes would include ending former President George W. Bush's tax cuts for upper-income Americans beginning in 2013. Obama also would eliminate tax breaks and loopholes that benefit oil and gas companies, hedge fund managers, and corporate jet owners -- ideas that have previously been rejected by congressional Republicans. His plan to limit deductions and exclusions for people with income above $250,000 has even been rejected by many Democrats in the past.
"If we don't act, the growing debt will eventually crowd out everything else," Obama said, "preventing us from investing in things like education or sustaining programs like Medicare."
Senate Republican leader Mitch McConnell, R-Ky., said tax hikes will kill jobs, and that Obama's submission to the debt committee does not take on major reforms of the entitlement programs that drive much of deficit spending, Social Security and Medicare.
"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," McConnell said. "The good news is that the Joint Committee is taking this issue far more seriously than the White House."
GOP members of Congress have been particularly critical of the proposed Buffett Rule, which Obama said would make sure that loopholes do not allow millionaires to pay a lower tax rate than middle class Americans. The rule is named for billionaire investor Warren Buffett, who protested these loopholes recently.
"Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett," Obama said.
Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, described the Buffett rule and other tax proposals as "class warfare." Ryan said on Fox News Sunday that such an approach "will attack job creators, divide people and it doesn't grow the economy."
Obama said it's not "class warfare" to ask "a hedge fund manager to pay the same tax rate as a plumber or teacher." He also said the nation's $14.5 trillion-plus debt is too big to be reduced by budget cuts only.
"This is not class warfare," Obama said. "It's math."
The special congressional committee that will review Obama's plan is scheduled to report to Congress by Nov. 23. Then Congress is required to vote up or down on the plan by Dec. 23. If it falls through, $1.2 trillion in automatic budget cuts over 10 years would begin to take effect.
See photos of: George W. Bush, Barack Obama, Afghanistan,Iraq, John Boehner
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