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.
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 A. Boehner (R-Ohio) last December in the discussions over the "fiscal cliff" – which included $1.8 trillion in deficit reduction through spending cuts and tax increases.
"The president has made clear that he is willing to compromise and do tough things to reduce the deficit," a senior administration official said, "but only in the context of a package like this one that has balance and includes revenues from the wealthiest Americans and that is designed to promote economic growth."
Boehner, in a statement Friday, accused Obama of holding entitlement cuts "hostage" in an effort to win support for more tax hikes, despite warnings from Congressional Republicans not to do so.
"That's no way to lead and move the country forward," Boehner said. He also criticized the budget proposal because it does not balance, although according to White House estimates it would significantly reduce the deficit as a percentage of the economy over the next decade.
In addition to Republican opposition, the president also is likely to face immediate heat from some Democrats and liberal supporters over his proposed cuts to entitlement programs. 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 are opposed 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."
The full budget will be released Wednesday, but officials gave a top-line overview to reporters Friday and have previously released details of the offer to Boehner.
rest at http://www.washingtonpost.com/business/economy/obama-budget-would-cut-entitlements-in-exchange-for-tax-increases/2013/04/05/2ee93f82-9dd6-11e2-9a79-eb5280c81c63_story.html?wpisrc=al_comboPNE
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