President Obama will propose a budget next week that embraces a risky strategy of courting Republicans for a grand bargain on the debt while angering Democratic allies with cuts to the nation’s entitlement programs.
White House officials said Friday that Obama’s budget would cut Medicare and Social Security and ask for less tax revenue than he has previously sought. The budget, to be released Wednesday, will fully incorporate the offer Obama made to House Speaker John A. Boehner (R-Ohio) during December’s “fiscal cliff” talks — which included $1.8 trillion in deficit reduction through spending cuts and tax increases.
It's been criticized by Democrats of being too centrist. Concessions that might have been made after negotiations have been offered as a starting point, so there are concerns about where this might ultimately end up.
The cuts to Social Security will be made by adopting a "chained CPI" as an adjustment to benefits. Wikipedia has a section on it - of course - click here for it. I'll post separately about it, but there is a hunch that the current CPI (cost of living) formula overstates inflation, so Social Security beneficiaries are receving too much in benefits. This will adjust those changes downward - which is already unpopular. The left is not pleased at the moment.
Tax increases are to come from limits on tax deducations and closed loopholes for industries - including oil and gas - so expect pushback from the Texas delegation. Limits on tax deductions will affect households earning more than $250,000. A 28% cap is proposed to be placed on total deductions.
Wonkblog might be the best place to start getting a handle on its content, Obama's strategy and links to additional sources of information about it.
Click here for content:
The upside of this strategy is clear: Obama gets “caught trying” on a budget compromise. House Republicans have put forward a series of extremely conservative budget proposals that show no interest in a compromise. Senate Democrats have a more modest plan, but one that doesn’t include any notable concessions to Republicans. Obama will position himself in the middle. His budget will incude high-profile concessions to Republicans — though he will emphasize that he’ll only accept those concessions if they come with significant new revenues. No one will be able to say he isn’t trying to reach a deal, and the cries from liberals will prove that he’s forcing his base to accept very tough medicine.Expect lots of charts and graphs. We're heading into the budget soon so the numbers will start to fly.
