What is Obama going to propose now to reduce the budget?

We know that Obama's last proposed attempt to cut the deficits actually increased them over the coming decade by $1.2 trillion. Didn't Obama just promise four months ago not to try raising taxes for the next two years? Under the headline of "Obama to Make Small Counteroffer," here is the outline of Obama's newest proposal.

The details on President Obama’s opening bid in his deal seeking an increase in the $14.3 trillion federal debt ceiling are emerging, and he is certainly leaving himself lots of room to negotiate.
The details reported thus far include:
--A tax increase on high earners
--A Social Security tax hike
--Reduced Defense spending
--Changes to Medicare and Medicaid payments to encourage savings
Not mentioned specifically is an oft-discussed initiative by the administration to raise tax receipts by closing loopholes on the corporate code and lowering the rate in a bid to get multi-nationals to allow more of their income to be taxed in the U.S. Whether this idea will be part of Obama’s Wednesday afternoon speech at George Washington University or tackled on its own is unclear.
There is a lot of potential money there, to be sure. But the sources of the funds are not likely to win many plaudits from Republicans.
The Republican budget plan, meanwhile, comes without tax increases and finds its biggest savings by making cuts. Medicaid, a welfare program for poor Americans, would become a block grant system operated solely by states. Medicare, an entitlement program for senior citizens, would become a subsidy program that helps seniors buy private insurance.
Obama’s modest counteroffer reinforces the notion that Democrats mean to use the Republican plan as a blunt object in 2012. . . .