Obama Eyes Medicare Changes, Tax Increases

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ObamaChallenging Republican budget plans, President Barack Obama on Wednesday proposed lowering the nation's future deficits by $4 trillion over a dozen years through a blend of specific measures and vague objectives designed to lower spending in politically sensitive health care programs while also increasing taxes.

The president proposed reductions in the growth of Medicare spending, cuts in defense, an overhaul of the tax system to eliminate many loopholes enjoyed by individuals and corporations, and an end to Bush era tax cuts for wealthier Americans.

In a speech at George Washington University Wednesday, Obama drew sharp contrasts with a Republican plan that cuts about $5.8 trillion in spending over the next decade and which the White House says unfairly singles out middle-class taxpayers, older adults and the poor.

This new clash, just a week after the president announced he would seek re-election, ensures that the nation's fiscal health will be at the center of the 2012 presidential campaign. For the past two months, Obama has been arguing to protect his core spending priorities, including education and innovation. His turn to deficit reduction reflects the pressures he faces in a divided Congress and with a public increasingly anxious about the nation's debt, now exceeding $14 trillion.

To help enforce budget discipline, the president called for resurrecting a spending cap that would be triggered if the nation's debt did not stabilize and begin to decline by 2014. The cap would not apply to Social Security, low-income programs or Medicare benefits.

Even before the president spoke, Republicans were heaping scorn on any plan from the president that would increase taxes. At the same time, the president was risking liberal anger by seeking reductions on venerable Democratic programs like Medicare and Medicaid.

The president's plan, outlined in a seven-page White House fact sheet, draws many of its ideas from the December recommendations of Obama's bipartisan fiscal commission, which proposed $4 trillion in deficit reduction over 10 years. Like the commission's plan, three quarters of the deficit reduction would come from spending cuts, including lower interest payments as the debt eases. One quarter, or $1 trillion, would come from additional tax revenue.

The proposal calls for cutting $770 billion from non-defense domestic spending by 2023. That figure does not include spending on major benefit programs like Medicare, Medicaid and Social Security. It also would reduce defense spending by $400 billion during the same 12 years.

Obama envisions spending cuts in Medicare and Medicaid of $480 billion through 2023. Those are in addition to the $500 billion in reductions over 10 years from projected increases in Medicare spending contained in the health care law Congress passed and Obama signed last year.

The president's planned health care reductions include vague proposals to lower Medicaid costs and reduce Medicare prescription drug expenses.

While the White House concedes that Social Security is facing pressure from an aging population, Obama did not specify any changes to the national retirement system other than calling for bipartisan efforts to "strengthen the program."

In laying out his plan, the president is wading into a potential political thicket. Liberals are loath to making cuts in prized Democratic programs like Medicare and Medicaid, and in Social Security. Moderates worry that his plan could unravel bipartisan deficit-cutting negotiations. And Republicans already are poised to reject any proposal that includes tax increases.

Obama briefed Congress' bipartisan leadership on the contents of his speech Wednesday morning in the Cabinet Room of the White House. Photographers captured the image of Obama, flanked by House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., before the meeting got under way.

For the White House, the speech comes as Obama pushes Congress to raise the limit on the national debt, which will permit the government to borrow more and thus meet its financial obligations. The country will reach its debt limit of $14.3 trillion by May 16. The Treasury Department has warned that failure to raise it by midsummer would drive up the cost of borrowing and destroy the economic recovery.

The president's proposal is meant to be in sharp contrast with the plan offered by House Budget Committee Chairman Paul Ryan., R-Wis. That budget proposal, embraced by the House Republican leadership, would reduce spending by more than $5 trillion over 10 years with structural overhauls to Medicare and Medicaid while also making permanent all Bush-era tax cuts.

Obama could face resistance from Democrats. Senate Majority Leader Harry Reid, D-Nev., on Tuesday reiterated his opposition to changes in Social Security.

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Samir semaan

What the president is proposing will not work only if there is enforcement of laws on the book and that is to see who is eligible or not because those programs are for americans and holders of permanent residents in the country they are america' safety net for middle class and poor people.

April 15 2011 at 1:12 AM Report abuse rate up rate down Reply
inasctg56

the national debt – President Obama directed the secretary of defense to come up with wasteful spending in defense because this is a huge part of the budget and doubled under Bush. The secretary of defense reported this to congress in January. How much did Boehner and the gop cut from defense? $3 billion. Ryan’s budget? Zero. Obama? $400 billion over 12 years. You betcha! Or should I say "So be it".

April 14 2011 at 3:31 PM Report abuse rate up rate down Reply
inasctg56

EDBOOBYMARK: I heard the economists say that we are out of the ditch, back on the road, and accelerating. Last night the Nightly Business Report stated that all sections of the country are experiencing economic growth.
* 1.8 million job creation
* 20 months of manufacturing gains
* 20 months of export gains
* Retail sales up
* Demand for machinery and equipment way up from 100% write offs for improvements made in this country
* Trade deficit actually has seen a decline
* Dow has gone from 6500 to 12,400

April 14 2011 at 3:29 PM Report abuse rate up rate down Reply
1 reply to inasctg56's comment
inasctg56

Gop and tea party followers should watch the Nightly Business Reports - you will learn something.

April 14 2011 at 3:30 PM Report abuse rate up rate down Reply
inasctg56

Reported last night on Nightly Business Report: Every section of the country seeing economic gains. Go Obama and dems.

April 14 2011 at 3:11 PM Report abuse rate up rate down Reply
inasctg56

REPLY TO LONGJOHNIN REGARDING ILLEGAL IMMIGRANTS: Dems passed legislation holding businesses accountable for hiring illegals - no job, go home. The senate offered to move it up on the agenda but the republicans declined. Where is this on Boehner and the gop's agenda when they campaigned on this? No where because the chamber of commerce loves cheap labor. And the southern gop is passing legislation that exempts their gardeners, housekeepers, and nannies.

April 14 2011 at 3:09 PM Report abuse rate up rate down Reply
inasctg56

President Obama directed the secretary of defense to come up with wasteful spending in defense because this is a huge part of the budget and doubled under Bush. The secretary of defense reported this to congress in January. How much did Boehner and the gop cut from defense? $3 billion. Ryan's budget? Zero. Obama? $400 billion over 12 years.

April 14 2011 at 3:05 PM Report abuse +1 rate up rate down Reply
inasctg56

What has President President Obama and Democrats done?
* 1.8 million job creation
* 20 months of manufacturing
* 20 months of export gains
* Retail sales up
* Demand for machinery and equipment way up from 100% write offs for improvements made in this country
* Trade deficit actually has seen a decline
* Dow has gone from 6500 to 12,400
* IRS given resources to go after offshore accounts with over 14,000 coming forward
* Eliminated incentives for corporations to go overseas
* Eliminated 2004 gop for overseas profits to be taxed at 5%
* Passed legislation that addresses the problems of the 2002 gop banking legislation that allowed predatory lending and less oversite on wallstreet, banks, and mortgage companies
* And those ground break ceremonies he attended – now hiring at $12 to $18 an hour (but he was just campaigning)
* In 2007 dems took money away from big oil and steered it toward our auto industry for R&D with mandates for better mileage and now low and behold we have suv's that get 32 mpg as well as waiting lists for chevy volts and almost all auto workers have returned to work
* Electric batteries, charging stations, and wind turbines slated overseas under Bush are being built here now
* And now the national debt – President Obama directed the secretary of defense to come up with wasteful spending in defense because this is a huge part of the budget and doubled under Bush. The secretary of defense reported this to congress in January. How much did Boehner and the gop cut from defense? $3 billion. Ryan’s budget? Zero. Obama? $400 billion over 12 years.
* And the gop? They continue to cut jobs and wages while fighting for more tax cuts for the wealthy and corporations. Same old gop failed policies. I'd say Obama and dems have stepped on a few toes.

April 14 2011 at 11:49 AM Report abuse rate up rate down Reply
1 reply to inasctg56's comment
RichardPoole

Rasing the age to 70 to recieve the social security benefits WORKING citizens paid into for 30-40 years is a travesty.Try cutting ANY government aid to illegal immigrants and obamas old illegal immigrant aunt would not be on our dollar.The insurance companies will be subsidized with our tax dollars(must be why their stocks are doing great) and they know that most recipients of social security will be dead before recieving a dime of the money they paid into the system.I guess this will make more money available for ENTITLEMENT programs for illegals and others who paid not one dime into the system.You try working at 65 to 70 years old or even being considered for a job.We are living longer but still suffer the illness and pain associated with aging.It makes more sense to require the young and middleage to support their own children and welfare to require drug testing and stopping the billions of fraud in the system before stealing the money from older americans that PAID into a system to supplement their retirement.

April 14 2011 at 11:40 AM Report abuse +1 rate up rate down Reply
1 reply to RichardPoole's comment
inasctg56

Where cuts should be made: President Obama directed the secretary of defense to come up with wasteful spending in defense because this is a huge part of the budget and doubled under Bush. The secretary of defense reported this to congress in January. How much did Boehner and the gop cut from defense? $3 billion. Ryan’s budget? Zero. Obama? $400 billion over 12 years.

April 14 2011 at 3:03 PM Report abuse rate up rate down Reply
ndc1234mlss

The country is not broke! The 2% Elite class and the corporations don't pay their fair share. How is it that America's largest corp., General Electric ($79 billion strong) made $15 billion in profit, paid absolutely $0 in federal tax and received a $3.1 billion refund from the IRS??? of our money! The moneyed interests sock it away and don't spend it on the middle class in the form of jobs, they hoard it or use it to purchase other corporations to increase their power base and monopolistic control of the general masses-the wage earners or working poor all collectively known as the former middle class-a dying breed sentenced to a slow extinction by the Rich.

April 14 2011 at 10:11 AM Report abuse +3 rate up rate down Reply
1 reply to ndc1234mlss's comment
inasctg56

Reported on the News Hour last night that corporate and wealthy taxes are at their lowest in 50 years.

April 14 2011 at 3:04 PM Report abuse rate up rate down Reply
edbobbymarc

Funny, I thought AP was a NEWS organization - yet, this is an editorial complete with obvious bias.

Please, please tell me your tongue was firmly in your cheek when you wrote the words that Obama wants to "enforce budget discipline."

After the last two year Democratic spending spree, how does anyone take this man at his word? That statement is as believable as his efforts to get everyone to work together in a "bipartisan way." Now that the dems are no longer in the majority, Obama is lecturing the Republicans about working together - the very same people the President of the U.S. called "enemies" and didn't bother to invite to closed door meetings about healthcare?????

April 14 2011 at 1:16 AM Report abuse +3 rate up rate down Reply