Obama to offer budget that cuts Medicare and Social Security
AP Images. Obama budget: Obama to offer Social Security and Medicare cuts in new budget. IMAGE
President starts where he left off during "fiscal cliff" fight, offering big entitlement cuts in exchange for new revenues in bid to cut deficit by $1.8 trillion.
WASHINGTON — President Barack Obama’s proposed budget will call for reductions in the growth of Social Security and other benefit programs by including a proposal to lower cost-of-living adjustments to government social safety net spending, a senior administration official says.
The proposal attempts to strike a compromise with congressional Republicans on the fiscal 2014 budget by combining the president’s demand for higher taxes with GOP insistence on reductions in entitlement programs.
The official, who spoke on a condition of anonymity to describe a budget that has yet to be released, said Obama would reduce the federal government deficit by $1.8 trillion over 10 years.
A key feature of the plan Obama is proposing for the federal budget year beginning Oct. 1 is a revised inflation adjustment called "chained CPI." This new formula would effectively curb annual increases in a broad swath of government programs, but would have its biggest impact on Social Security.
Economists generally agree that the "chained" consumer price index is a more accurate way to measure the cost of living than the traditional CPI, but it faces opposition from groups on both the left and the right because of its impacts on both entitlement payouts and tax bracket calculations., FactCheck.org reported in a December story explaining the chained CPI proposal.
Obama’s budget proposal also calls for additional tax revenue, including a proposal to place limits on tax-preferred retirement accounts for wealthy taxpayers. Obama has also called for limits on tax deductions by the wealthy, a proposal that could generate about $580 billion in revenue over 10 years.
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The inflation adjustment would reduce federal spending over 10 years by about $130 billion, according to past White House estimates. Because it also affects how tax brackets are adjusted, it would also generate about $100 in higher taxes and affect even middle income taxpayers.
Obama’s budget, to be released next week, comes after the Republican-controlled House and the Democratic-run Senate passed separate and markedly different budget proposals. House Republicans achieved long-term deficit reductions by targeting safety net programs; Democrats instead protected those programs and called for $1 trillion in tax increases.
Obama’s budget proposal essentially picks up where he left off with his "final offer" to House Speaker John Boehner in negotiations to avoid the "fiscal cliff" late last year. Those talks ultimately failed but Congress did agree to increase tax rates on the wealthiest Americans.
The reductions in growth of benefit programs, which would affect veterans, the poor and the older Americans, is sure to anger many Democrats. Labor groups and liberals have long been critical of Obama’s offer to Boehner for including such a plan. Critics on the left also suggest that in using a proposal already rejected by the GOP as his starting point means Obamas plan is likely to lurch still further to the right, with deeper cuts to social programs and perhaps fewer revenues.
In fact, Boehner almost immediately rejected the proposal, saying that the spending cuts should not be "held hostage" to tax increases.
The budget will also include an expansion of pre-K education that the president first proposed in the State of the Union, Politico reports
Editors Note:
The above article was MSN.
Cuts to Social Security, Medicare and Medicaid were and still are major sticking points in ratifying a new budget.
President Obama reluctantly put Social Security, Medicare and Medicaid, which the Republicans continue to refer to as entitlement programs, on the budget cutting block only after Republicans steadfastly refused to negotiate with him on any budget deal until he did. As for Social Security Seniors will still receive their benefits as they have but with the chained CPI they will receive a much lower annual cost of living annual increase than what they now receive. As per Medicaid and Medicare The scope of the programs will be moderately reduced with more out of pocket expenses passed on to the participants. In return President Obama wants to raise the tax rate on the wealthy and reduce the amount of deductions that the wealthiest of Americans can deduct from there Federal Income Tax.
The Republicans do not like this plan because they want deeper cuts to Social Security, Medicaid and Medicare with no raise in the Federal Income Tax rate for the wealthy and no reduction of the amount of deductions that the wealthiest of Americans can take. They also object to the Chained CPI that the President has suggested because along with the reduced cost of living yearly increase that Seniors would receive it would also slightly increase the tax rate. This would be almost negligible for the Seiners and the Poor because of their reduced income. Where it would be felt the most is in the higher income brackets. In short the less income you have the less tax you have to pay but the more income you have the more tax you will have to pay and we all know how the Republicans feel about raising taxes on the rich. The republicans also support The Ryan Budget plan which will turn the Federal Medical Assistance Program for the Poor into a voucher program. What this means that around the fist part of the year each poor family would be allotted so much in vouchers depending on a number of factors including family size. When a family member receives medical care the cost would be deducted from the vouchers. The problem with that is when you have exhausted your allotment of vouchers that’s it. You will receive no more government medical assistance for you or your family until the beginning of the next year and any medical bills you or your family accrue after the vouches have run out means you will be responsible for paying out of your own pocket. The Ryan Budget Plan also calls for massive tax reductions and brakes for large Corporations and large Businesses. Of course the lost Federal Revenue caused by these tax reductions and tax breaks would have to be made up by increasing taxes, remember that the Republicans are stead fast again raising taxes on the rich so the burden would be placed squarely on the shoulders of the Poor, Middle Class and Elderly who can least afford it.
What I strongly suggest is like in the article above. Please consider contacting your U.S. Congressional Members in both the U.S. House and Senate, especially if they are Republican, by Phone, Letter or Email and let them know how you feel. The Republicans keep talking about changing there image and making themselves more appealing to the voters so as votes let them know what you feel and want. I don’t know if it will help or not but it’s worth a try. Don’t threaten them just explain to them your feelings and thoughts and as a voter what you would like them to do. That’s all we can do besides remembering not only what they say but also what they do when go to vote in the midterm elections in 2014 and the Presidential elections in 2016. And please most of all don’t forget to register to vote and to show up at the poles on election day. If you would be so kind as to let me know what response you get if any and I will gladly publish a sampling hear on my blog. Thanks.
Ramblings of an Occupy Liberal 