WASHINGTON (RNN) - President Barack Obama called for cutting taxes on the middle class while raising taxes on the wealthy - whom he referred to as "jet owners" - as a means of raising revenue and paying down debt.
In his televised address to the nation, Obama said revenue is an essential ingredient in balancing the budget and addressing the crisis imposed by the nation reaching the $14 trillion debt ceiling.
Unless Congress raises the debt ceiling, the U.S. will essentially run out of tools to pay its debts and operate the government, Obama said.
"You can't reduce the deficient without having some revenue in the mix," he said.
Obama's speech comes one week after budget negotiations between Vice President Joe Biden and key Republican leaders over the debt ceiling fell apart.
The deadline to raise the debt ceiling is Aug. 2. After that point, the U.S. will default on loans.
"If the United States - for the first time - cannot pay its bills, it defaults," he said. "Then the consequences for the U.S. economy will be significant and unpredictable. And that is not a good thing."
Obama has challenged the federal government to cut $4 trillion from its budgets over 10 years, while at the same time protecting funding for healthcare over the longterm.
A bi-partisan commission has identified $1 trillion in cuts, he said, and now, it's time for "the rich" to do their part.
Otherwise, deeper cuts might compromise critical services, such as educational scholarships, national weather services, critical medical research and food safety inspections.
"I spent the last two years cutting taxes for ordinary Americans, and I want to continue expanding those tax cuts," he said, noting that the struggles of middle-class families were a big problem before the recession hit in 2007.
However, Speaker of the House John Boehner, R-OH, told Fox News on Tuesday that tax increases on the wealthy are not on the bargaining table.
"There are no votes in the Congress … to raise taxes on anyone," Boehner said.
Obama responded Wednesday by painting the Republican Party as being more interested in rich CEOs and oil companies than in the average, struggling American.
"I don't think that's real radical," the president said of his proposed changes in tax laws. "You'll still be able to ride on your corporate jet, you're just going to have to pay a little more."
He urged Congress to pass other budget-related bills, including extending middle class tax cuts, sending Americans to work on improving the nation's transportation infrastructure and advancing trade agreements with countries like South Korea.
In relaying a sense of urgency, Obama called on members of Congress to skip their vacations and stay in Washington to hammer out a solution to the crisis.
He held his two daughters out as an example of a work ethic that doesn't allow them to wait until the last minute to finish difficult assignments.
"They don't pull all-nighters," he said.
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President Barack Obama proposes raising taxes on the wealthy to ease economic woes. (Source: CNN)
