Saturday, February 17, 2018
Politics

Social Security, Medicare facing cuts in Obama budget

President Barack Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say.

In a significant shift in fiscal strategy, Obama on Wednesday will send a budget plan to Capitol Hill that departs from the usual presidential wish list that Republicans typically declare dead on arrival. Instead it will embody the final compromise offer that he made to Speaker John Boehner late last year, before Boehner abandoned negotiations in opposition to the president's demand for higher taxes from wealthy individuals and some corporations.

Congressional Republicans have dug in against any new tax revenues after higher taxes for the affluent were approved at the start of the year. The administration's hope is to create cracks in Republicans' anti-tax resistance, especially in the Senate, as constituents complain about the across-the-board cuts in military and domestic programs that took effect March 1.

Obama's proposed deficit reduction would replace those cuts. And the White House believes that if Republicans continue to resist the president, most Americans will blame them for the fiscal paralysis.

Besides the tax increases that most Republicans continue to oppose, Obama's budget will propose a new inflation formula that would have the effect of reducing cost-of-living payments for Social Security benefits, although with financial protections for low-income and very old beneficiaries, administration officials said.

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