Obama’s 2014 Budget Will Edit Entitlements And Push Taxes
Next week, President Barack Obama will propose changes to Social Security and other benefit programs when he releases his 2014 budget. The details are not due to be released until April 10, but a senior administration official confirmed some key points on Friday.
The proposal would cut the deficit by $1.8 trillion over 10 years, from an expected 5.5 percent of GDP this year to about 1.7 percent of GDP by 2023. This will be achieved by editing a mixture of federal inlays and outlays — such as ending certain tax provisions and implementing the sequestration spending cuts — and until recently afforded few GOP calls for entitlement cuts.
Now, at least one provision in the 2014 budget will explicitly lower cost-of-living adjustments to Social Security, which will partially curb the growth of the benefits. Changes to Medicare are also expected to be in the budget. With these changes in hand, the President is weighing the ire of some from his party against a need to cooperate with the GOP. The two parties have been locked in political trench warfare for months, and each change in the battle line has been a Pyrrhic victory at best.
Some observers suggest that the edits to entitlements are more of a political move than anything. The President will have to do something to placate Republicans if he is going to push more tax reform through. Ceding ground on entitlements would be a start…
The House and the Senate each recently passed separate and pointedly different budget proposals. The GOP has made of point of balancing the budget as soon as possible, a strategy that would hurt the economy in the short term. However, Republicans argue that the cost would be worth the damage, and that delaying the budget will only make things worse.
Obama, for his part, told ABC News: ”My goal is not to chase a balanced budget just for the sake of balance. My goal is how do we grow the economy, put people back to work, and if we do that we are going to be bringing in more revenue.” Revenue increases aside, Obama’s goal is to grow the economy first, and balance the budget as a result — as opposed to balance the budget, and grow the economy as a result.
“We’re not gonna balance the budget in ten years because if you look at what Paul Ryan does to balance the budget, it means that you have to voucher-ize Medicare, you have to slash deeply into programs like Medicaid, you’ve essentially got to — either tax — middle class families a lot higher than you currently are, or you can’t lower rates the way he’s promised,” the President said in his interview with ABC News.