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Obama to offer Social Security cuts in new budget in exchange for tax hikes
Hotair ^ | 04/05/2013 | Ed Morrissey

Posted on 04/05/2013 9:22:29 AM PDT by SeekAndFind

No wonder it's taking so long for Barack Obama to send his budget proposal to Congress. The budget is almost two months overdue, but Republicans may find it worth the wait. The Washington Post reports that Obama will offer cuts to Social Security in exchange for tax hikes to close the deficit --- in effect, the grand bargain he and John Boehner nearly made two years ago:

President Obama will release a budget next week that proposes significant cuts to Medicare and Social Security and fewer tax hikes than in the past, a conciliatory approach that he hopes will convince Republicans to sign onto a grand bargain that would curb government borrowing and replace deep spending cuts that took effect March 1.

When he unveils the budget on Wednesday, Obama will break with the tradition of providing a sweeping vision of his ideal spending priorities, untethered from political realities. Instead, the document will incorporate the compromise offer Obama made to House Speaker John Boehner (R-Ohio) last December in the discussions over the so-called “fiscal cliff” – which included $1.8 trillion in deficit reduction through spending cuts and tax increases. …

While Republicans are certain to be skeptical of Obama’s call for more taxes, the president also is likely to face immediate heat over his budget proposal from some Democrats and liberal supporters. Obama proposes, for instance, to change the cost-of-living calculation for Social Security in a way that will reduce benefits for most beneficiaries, a key Republican request that he had earlier embraced only as part of a compromise. Many Democrats say they areopposed to any Social Security cuts and are likely to be furious that such cuts are now being proposed as official administration policy.

“While this is not the president’s ideal deficit reduction plan, and there are particular proposals in this plan like the [cost-of-living] change that were key Republican requests and not the president’s preferred approach,” the senior administration official said, “this is a compromise proposal built on common ground, and the president felt it was important to make it clear that the offer still stands.”

Strictly from a political standpoint, the public offer is surprising, almost shocking. Without a doubt, Democrats in the 2014 cycle would have used the senior-scaring tactics of the last decade or more when it comes to Republican demands for entitlement reform and deficit control. Most of those efforts have focused on Medicare and its greater threat to the nation’s fiscal health. When Paul Ryan offered two budgets to turn Medicare into an exchange program not dissimilar to ObamaCare for the rest of the nation, Democrats ran ads that pictured a Ryan stand-in pushing Grandma over a cliff.

That strategy is useless now that Obama has essentially endorsed entitlement reform, and proposed his own Social Security cuts — and also to Medicare, as the Post notes deeper in the piece:

The budget proposal slices $200 billion from already tight defense and domestic budgets. It would cut $400 billion from Medicare and other health programs by negotiating better prescription drug prices and asking wealthy seniors to pay more, among other policies. It would also generate $200 billion in savings by scaling back farm subsidies and federal retiree programs, among other proposals.

The proposal to change the formula to calculate Social Security payments, also originally part of the offer to Boehner, would generate $130 billion in savings and $100 billion in revenue, a result of the impact of the formula change on other government programs. But it is the change in Social Security payments to most recipients that is likely to generate the greatest outcry from the Obama administration’s traditional allies.

The change in Social Security actually is more modest than in Medicare. The former appears to be the adoption of chained CPI to calculate increases in payments, which will result in lower increases rather than cuts, which means that the savings are based on future projections rather than current rates of expenditures. The cuts to Medicare look like actual cuts, and perhaps even more significant, use means testing to generate revenues, a strategy that both parties have avoided in order to maintain the illusion that Medicare (and Social Security, which acts as a qualifier) aren’t welfare programs.

This proposal puts both parties on the political hook for proposing entitlement cuts and higher fees. A good entitlement reform package might be worth a trade for tax hikes, although comprehensive tax reform would be a better idea, which this proposal nibbles at but doesn’t deliver. Unfortunately, while the SSA reform on chained CPI is a good idea, the Medicare reform goes in the wrong direction — or at least in an ineffective direction. Ryan’s strategy to introduce choice in the form of public/private exchanges and most importantly a defined-contribution relationship of government to the system is the most effective way to solidify Medicare and solve the fiscal disaster than looms in the program. Perhaps this admission by Obama of the need to restrain costs in a real way will open the door to the Ryan/Wyden approach, which would be worth a tax hike to get passed.


TOPICS: Breaking News; Business/Economy; Culture/Society; Government
KEYWORDS: budget; destroyingus; entitlement; nwoalliance; obama; obamabudget; obamalies; obamataxhikes; socialsecurity; socialsecuritycuts; taxhikes; usurper
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1 posted on 04/05/2013 9:22:29 AM PDT by SeekAndFind
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To: SeekAndFind

sticking it to the people who dont like him. again


2 posted on 04/05/2013 9:24:07 AM PDT by turdhopper
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To: SeekAndFind

AARP will still continue to kiss BO’s butt and tell seniors that they can make up the shortfall with AARP’s superb insurance programs.


3 posted on 04/05/2013 9:27:32 AM PDT by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
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To: SeekAndFind

Hey you POS-in-Chief, how about getting rid of free stuff to illegals and new immigrants who swore they would not be a burden to the American taxpayer.


4 posted on 04/05/2013 9:28:30 AM PDT by notaliberal ( Democraps denied God thrice!)
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To: SeekAndFind

Shove it up your smelly Obama, Obama.

Only fools, idiots, and progressives are buying your act any more.


5 posted on 04/05/2013 9:31:09 AM PDT by Da Coyote
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To: SeekAndFind

There is a trap buried in here somewhere.

I am sure the GOP will be credited with screwing over the old folks.


6 posted on 04/05/2013 9:32:00 AM PDT by Venturer
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To: SeekAndFind

At least they’re not going to cut welfare payments, EBT cards, subsidized housing or Obama phones. Aunt Zatootie and Uncle Obummer are relieved.


7 posted on 04/05/2013 9:32:00 AM PDT by ladyjane (For the first time in my life I am not proud of my country.)
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To: Venturer
The man lies as usual.



Several programs, notably Social Security, which the White House said would be "cut" under President Obama's fiscal 2014 budget which he's finally unveiling next week would actually grow at close to the currently projected rates, according to experts.

Instead of the "cuts" heralded in headlines today, the president's budget writers are seizing on a formula that simply tweaks the rate of growth. While it could still significantly reduce the projected 10-year budget deficit, it won't cut anything from what seniors, veterans, students and others who rely on the programs get.

In fact, one Senate analysis reveals that the Obama "cut" will lower slightly the growth of Social Security benefits over the next 10 years to 5.9 percent from 6.1 percent.

Ditto for reports on the "cuts" to Medicare. The plan is to reduce future payments in the program to doctors and hospitals, though wealthier recipients might see higher premiums.

Reports today said that the president plans to switch how inflation is measured to account for cost of living increase to something called a "chained Consumer Price Index," which many feel more accurately figures inflation.

The nonpartisan Moment of Truth Project headed by Democrats Erskine Bowles and Alice Rivlin and Republican Alan Simpson issued a report just last month that said the chained C.P.I. won't cut spending, but instead will limit future growth.

"Since 2000, the chained C.P.I. has, on average, been 0.25 to 0.3 percentage points lower per year than the standard C.P.I. measures. Though this difference is small on average, it compounds over time; depending on which index you use, prices have either increased by 34 percent or 29 percent (chained C.P.I.) between 2000 and 2011. Over a longer time frame, this difference would become even more pronounced," their report said.

More bluntly, their report quoted Robert Greenstein of the Center for Budget and Policy Priorities, who said: "This change should not be regarded as a benefit cut or a tax increase. It should be regarded more as a technical change to achieve Congress's stated goal of keeping pace with inflation in as accurate a way as possible."

Plus, Obama would include financial protections for the poor and elderly, so they would be guaranteed from seeing any decreases.

Among the program spending increased tied to the C.P.I are Social Security, Obamacare, veterans benefits, Pell Grants, and taxes such as the alternative minimum tax.

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8 posted on 04/05/2013 9:35:29 AM PDT by SeekAndFind
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To: Venturer

Yea!! it’s the old Charlie Brown/Lucy football show again!
I’m sure the budget has some cuts but then replaces w/tax hikes..


9 posted on 04/05/2013 9:35:54 AM PDT by rainee (Her)
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To: ladyjane

my first thoughts was how about welfare, EBT where they can use at strip club, get beer and wine, pay for their car payments etc.
how about stopping illegals getting free education, welfare, food stamps, health care etc, nah hit the old people who worked but then again the old idiots which voted for this turd pusher agenda deserve everything they get or should I say don’t get .

The north east, are you taking note, , old supposed to be Catholics voting all the time for the Dem regime


10 posted on 04/05/2013 9:37:07 AM PDT by manc (Marriage =1 man + 1 woman,when they say marriage equality then they should support polygamy)
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To: SeekAndFind
Take from senior US citizens that have been paying into social security their whole lives...transfer to new illegal democrats after both parties push amnesty through.

same pattern with Obamacare

11 posted on 04/05/2013 9:38:57 AM PDT by opentalk
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To: SeekAndFind

What a one-trick pony.

Embarrassing.


12 posted on 04/05/2013 9:39:21 AM PDT by Noamie
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To: Noamie

RE: Embarrassing.

He does not know the meaning of the word. Neither did Clinton.


13 posted on 04/05/2013 9:40:41 AM PDT by SeekAndFind
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To: SeekAndFind

Oh but the media says that it’s the eeeevvvvviiiilllll Republicans who want to cut Medicare! Everybody knows the media wouldn’t lie.

< / is this necessary /s>


14 posted on 04/05/2013 9:44:24 AM PDT by I want the USA back (Pi$$ed off yet?)
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To: SeekAndFind

Is the Republican leadership looking to cut SS? They need to go after plenty of other things like disability, food stamp and welfare and medicare fraud.


15 posted on 04/05/2013 9:45:26 AM PDT by ryan71 (The republican party is dead to me. Dead. Don't bother trying to revive it.)
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To: SeekAndFind
Cuts to foreign aid, UN climate-change, state department us-aid are never considered ....prioritizing quality of life US citizens comes last.

Ben Carson is correct ....this administration /government has done nothing to make our nation stronger.

16 posted on 04/05/2013 9:47:23 AM PDT by opentalk
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To: ryan71

Agreed, but all entitlements should be cut. Including SS. There simply aren’t enough young people working and the young people aren’t making enough to support the current benefits scheme.


17 posted on 04/05/2013 9:52:20 AM PDT by JCBreckenridge (Texas is a state of mind - Steinbeck)
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To: manc

Apparently you like losing elections. The only time the GOP ever won an election is with Catholic support.


18 posted on 04/05/2013 9:53:01 AM PDT by JCBreckenridge (Texas is a state of mind - Steinbeck)
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To: SeekAndFind

Boehner needs to respond in only a statement: How macroeconomics works—the more taken from the private sector, the smaller the private sector. The answer is no, this plan does not have the American Economy’s best interest in it. Record tax revenues are currently being collected, the spending needs to be managed. I, as Speaker of the House, will no longer join this failure.


19 posted on 04/05/2013 10:03:54 AM PDT by Son House (The Heath Care Recovery Never Gets Here, Like The Economic Recovery, Easily Predictable.)
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To: Venturer

talking points on how to blame republican’s are going out to the corrupt lapdog media as I type I bet


20 posted on 04/05/2013 10:05:27 AM PDT by manc (Marriage =1 man + 1 woman,when they say marriage equality then they should support polygamy)
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