President Obama has apparently tired of hearing Republicans pointing out that he’s yet to put his debt reduction plan on paper. According to multiple reports, Obama’s fiscal year 2014 budget, set to be released next week, will largely match the final “grand bargain” offer Obama made to Speaker John Boehner in December 2012. That offer, and next week’s budget, reportedly will include billions in cuts to Social Security and Medicare and trillions in new tax hikes.
Obama’s Social Security cuts will be achieved by changing how the federal government calculates inflation, known as “chained C.P.I.” His Medicare cuts will come through either reduced payments to doctors and hospitals, or higher premiums for wealthier Medicare recipients. Obama hopes both of these changes will lure Republican moderates like Sens. Lindsey Graham, R-S.C., and John McCain, R-Ari., into supporting trillions of dollars in new tax hikes.
Obama’s budget will also call for hundreds of billions of dollars in new spending on infrastructure projects and early childhood education programs. The new pre-K programs will be funded by new taxes on cigarettes and other tobacco products.
Obama’s decision to embrace Social Security and Medicare cuts is yet another acknowledgement that his earlier strategy of hoping sequester spending cuts would force Republicans to accept tax hikes, has completely failed. A new Marist poll out this month shows that Americans have largely accepted the sequester cuts.
Unfortunately for Obama, his new entitlement-cut strategy will also fail. None of the cuts Obama has previously outlined significantly reform any of the federal government’s entitlement programs in any way. Almost all Republicans view them as just rearranging the deck chairs on the Titanic. Obama got his tax hikes in January. The more time he wastes trying to get Republicans to raise them again, the less time he has to spend on his other second term priorities.
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