White House Budget to Include Social Security Cuts
This is something we've never seen from a Democratic president: An official White House budget that includes cuts to both Social Security and Medicare.
White House officials say the budget the president will unveil next week will include proposed cuts to Medicare (by increasing premiums for wealthier retirees) and Social Security (by reducing annual cost of living increases).
The proposals themselves are not new - they were part of the ill-fated offer the president made to Speaker of the House John Boehner, R-Ohio, during the December negotiations over the fiscal cliff - but they are now part of the official White House budget. And that is a significant change that will open the president up to criticism from liberals and put pressure on Republicans to offer a response.
These proposed cuts will infuriate liberals, but in the budget plan - as in the offer made last year to Boehner - the cuts will be paired with $580 billion in tax increases. Without the tax increases, there would be no cuts to Social Security and Medicare.
All told, the White House claims the president's budget would reduce the deficit by $1.8 trillion. Combined with spending cuts and tax increases made over the past two years, that would bring total deficit reduction to $4.3 trillion.
These cuts and revenue increases would also replace the spending cuts now in place under the sequester.
Of course, the tax hikes are precisely why Republicans rejected the president's offer in December and there's no indication they will now agree to them. But by including the offer, the White House says it is sending a signal that the president is serious about reducing the deficit, even if it means cuts that are sure to upset his liberal allies.
"This isn't about political horse trading," says a senior administration official. "It's about reducing the deficit in a balanced way that economists say is best for the economy and job creation."