President Obama on April 13 unveiled plans to restore the nation’s fiscal health by reducing the federal budget deficit by $4 trillion in the next 12 years.

During a recent speech at George Washington University, Obama explained his comprehensive plan to protect and strengthen America’s economy while rejecting the Republican approach to fiscal stability.

The president noted that the Republican-controlled House of Representatives wants to eliminate the $4 trillion difference between what the federal government spends and what it receives through dramatic cuts including reducing the Pell Grant—the heart of U.S. higher education aid–, restructuring Medicare and Medicaid, and scuttling the president’s health care reform law.

The price of fiscal stability is not that steep, Obama said.

“To meet our fiscal challenge, we will need to make reforms,” Obama said, according to remarks posted on The White House’s Web site. “We will all need to make sacrifices. But we do not have to sacrifice the America we believe in. And as long as I’m president, we won’t.”

Obama’s plan calls for the $4 trillion deficit reduction to be phased over time to protect and strengthen the nation’s economic recovery and the recovering labor market. He explained that the move builds on a roughly $1 trillion deficit reduction already outlined in his 2012 budget.

Under his approach, Congress would enact a debt failsafe that will trigger across-the-board spending reductions. Obama said the move will not make stringent cuts to national security, but rather find additional savings in the defense budget.

Obama’s strategy also aims to cut health care spending by reducing wasteful subsidies and erroneous payments. It will also cut spending on prescription drugs by using Medicare’s purchasing power to introduce more generic versions of brand-name drugs to the market. Obama added that he will work with governors of both parties to demand more efficiency and accountability from Medicaid.

The budget also aims to offer new incentives for doctors and hospitals to prevent injuries and improve results, rather than basing payment on the procedure or the number of days spent in hospitals. Medicare costs will also be reduced, administration officials said, by the expected recommendations of an independent health care commission—made up of doctors, nurses, medical experts and consumers—to find ways to reduce unnecessary spending while protecting access to the services that seniors need, Obama said.