"So today, I’m proposing a more balanced approach to achieve $4 trillion in deficit reduction over 12 years...It’s an approach that puts every kind of spending on the table -- but one that protects the middle class, our promise to seniors, and our investments in the future."

President Obama outlined four steps.  First, to keep domestic spending down, "but I will not sacrifice the core investments that we need to grow and create jobs. We will invest in medical research. We will invest in clean energy technology. We will invest in new roads and airports and broadband access. We will invest in education. We will invest in job training. We will do what we need to do to compete, and we will win the future."

Second, to cut defense spending--not only by getting rid of unneeded programs, but (in a little noticed assertion): "We need to not only eliminate waste and improve efficiency and effectiveness, but we’re going to have to conduct a fundamental review of America’s missions, capabilities, and our role in a changing world."

Third is to reduce health care spending, but not by the GOPer budget's idea: "Now, here, the difference with the House Republican plan could not be clearer. Their plan essentially lowers the government’s health care bills by asking seniors and poor families to pay them instead. Our approach lowers the government’s health care bills by reducing the cost of health care itself."  This can be accomplishment by implementation of the health care reform bill and by "building on these reforms" to dramatically lower the costs of Medicare and Medicaid.  But the President was also clear on what he would not do:

"But let me be absolutely clear: I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry, with a shrinking benefit to pay for rising costs. I will not tell families with children who have disabilities that they have to fend for themselves. We will reform these programs, but we will not abandon the fundamental commitment this country has kept for generations. That includes, by the way, our commitment to Social Security."