Republican challenger Mitt Romney says he would also reduce spending growth by capping it at 20 percent of the economy by 2016. In 2012, spending has accounted for about 23 percent of the economy.
Romney would preserve the Bush-era income tax cuts for all taxpayers, regardless of how much they earn. The economy is too weak to raise taxes on anyone, Romney has argued.
He says his plan to cut income tax rates for everyone by an additional 20 percent would help produce more tax revenue. And he says he would reduce the deficit in part by curbing some tax loopholes and deductions.
Complicating the political options is a crisis that Congress must first resolve: A budget deadlock could send the economy over a "fiscal cliff" next year, when tax increases and deep spending cuts will take effect unless a budget deal is reached.After the elections, Congress may address the budget crisis during a lame-duck session.