As much a policy speech as it was a political address, Obama laid the blame for the rising debt on the spending increases and tax cuts enacted during the presidency of George W. Bush and the recession that struck in late 2007.

"We lost our way," he said.

Ensuring that the nation's fiscal troubles will be at the center of the 2012 presidential election, Obama drew sharp contrasts with a Republican plan that cuts about $5.8 trillion in spending over the next decade and which the White House says unfairly singles out middle-class taxpayers, older adults and the poor. He pointedly noted that the GOP plan has already been embraced by some Republican presidential candidates.

Such cuts, he said, "paint a vision of our future that's deeply pessimistic."

"Their vision is less about reducing the deficit than it is about changing the basic social compact in America," Obama said, as the author of the Republican plan, House Budget Committee Chairman Paul Ryan, sat in the front row of the university auditorium.

Obama previewed his proposals to congressional leaders Wednesday morning. And even before he delivered his speech, top Republicans were pushing back.

"If we're going to resolve our differences and do something meaningful, raising taxes will not be part of that," House Speaker John Boehner declared shortly after his White House meeting.

This new clash comes just a week after the president announced he would seek re-election. For the past two months, Obama has been arguing for protection of his core spending priorities, including education and innovation. His turn to deficit reduction reflects the pressures he faces in a divided Congress and with a public increasingly anxious about the nation's debt, now exceeding $14 trillion.

"Any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget," the president said.

To help enforce budget discipline, the president called for resurrecting a spending cap that would be triggered if the nation's debt did not stabilize and begin to decline by 2014. The cap would not apply to Social Security, low-income programs or Medicare benefits.

The president's plan, outlined in a seven-page White House fact sheet, draws many of its ideas from the December recommendations of Obama's bipartisan fiscal commission, which proposed $4 trillion in deficit reduction over 10 years. As in the commission's plan, three quarters of the deficit reduction would come from spending cuts, including lower interest payments as the debt eases. One quarter, or $1 trillion, would come from additional tax revenue.

For the White House, the speech comes as Obama pushes Congress to raise the limit on the national debt, which will permit the government to borrow more and thus meet its financial obligations. The country will reach its debt limit of $14.3 trillion by May 16. The Treasury Department has warned that failure to raise the limit by midsummer would drive up the cost of borrowing and destroy the economic recovery.

In laying out his plan, the president is wading into a potential political thicket. Liberals are loath to making cuts in prized Democratic programs like Medicare and Medicaid, and in Social Security. Moderates worry that his plan could unravel bipartisan deficit-cutting negotiations. And Republicans reject any proposal that includes tax increases.

The proposal calls for cutting $770 billion from non-defense domestic spending by 2023. That figure does not include spending on major benefit programs like Medicare, Medicaid and Social Security. The plan also would reduce defense spending by $400 billion during the same 12 years.

Obama envisions spending cuts in Medicare and Medicaid of $480 billion through 2023. Those are in addition to the $500 billion in reductions over 10 years from projected increases in Medicare spending contained in the health care law Congress passed and Obama signed last year.

The president's planned health care reductions include vague proposals to lower Medicaid costs and reduce Medicare prescription drug expenses.

While the White House concedes that Social Security is facing pressure from an aging population, Obama did not specify any changes to the national retirement system other than calling for bipartisan efforts to "strengthen the program."

Next: Highlights of the president's deficit reduction framework >

Obama's Policy Highlights (Source: www.whitehouse.gov):

• Non-security discretionary spending: The president is proposing to build on the savings from the FY 2011 budget agreement, while investing in key drivers of economic growth like energy innovation, education, and infrastructure. This would entail cutting non-security discretionary spending to levels consistent with the Fiscal Commission, saving $770 billion by 2023.
• Security spending: The president’s framework will go beyond the Fiscal Year 2012 Budget to achieve deeper reductions in security spending. It sets a goal of holding the growth in base security spending below inflation, while ensuring our capacity to meet our national security responsibilities, which would save $400 billion by 2023.
• Health care: The president’s framework builds on the Affordable Care Act by including new reforms aimed at further reducing the growth of health care spending – a major driver of long-term deficits. The president opposes any plan that would simply shift costs to seniors and the vulnerable by undermining Medicare and Medicaid. Building on the foundation of the historic deficit reduction achieved through the Affordable Care Act, the framework would save an additional $340 billion by 2021, $480 billion by 2023, and at least an additional $1 trillion in the subsequent decade. These savings complement the new patient safety initiative that could lower Medicare costs by another $50 billion over the next decade by providing better care. The president’s framework includes initiatives that will:
• Bend the long-term cost curve by setting a more ambitious target of holding Medicare cost growth per beneficiary to GDP per capita plus 0.5 percent beginning in 2018, through strengthening the Independent Payment Advisory Board (IPAB).
• Make Medicaid more flexible, efficient and accountable without resorting to block granting the program, ending our partnership with States or reducing health care coverage for seniors in nursing homes, the most economically vulnerable and people with disabilities. Combined Medicaid savings of at least $100 billion over 10 years.
• Reduce Medicare’s excessive spending on prescription drugs and lower drug premiums for beneficiaries without shifting costs to seniors or privatizing Medicare. Combined Medicare savings of at least $200 billion over 10 years.
• Other mandatory spending: Outside of health care, comprehensive deficit reduction must include savings in other mandatory programs, including agricultural subsidies, the federal pension insurance system, and anti-fraud measures, while protecting and strengthening programs that serve low-income families and other vulnerable Americans. The president’s framework includes a target of $360 billion in savings from other mandatory programs by 2023.
• Tax reform: the president is calling for individual tax reform that closes loopholes and produces a system which is simpler, fairer and not rigged in favor of those who can afford lawyers and accountants to game it. The President supports the Fiscal Commission’s goal of reducing tax expenditures enough to both lower rates and lower the deficit.
• Social Security: The president does not believe that Social Security is in crisis nor is a driver of our near-term deficit problems. But, in the context of an aging population and a Social Security wage base that is declining as a share of overall earnings, Social Security faces long-term challenges that are better addressed sooner than later to ensure that the program remains for future generations the rock-solid benefit for older Americans that it has been for past generations. That is why the president supports bipartisan efforts to strengthen Social Security for the long haul. These efforts should be guided by several principles, including strengthening the program and not privatizing it, improving retirement security for the vulnerable while protecting people with disabilities and current beneficiaries, and not slashing benefits for future generations.