Obama to propose changes to Medicare and Social Security in new budget

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Story highlights

  • Obama pushed this plan before in talks with House Speaker John Boehner
  • Official: Plan would include $400 billion in savings to Medicare over 10 years
  • Budget "will show how we can invest in the things we need to grow our economy," official says

President Barack Obama's upcoming budget plan, which according to senior administration officials will include proposed changes to Social Security and Medicare plus some new tax increases in an effort for the president to reach a deal with Republicans on deficit reduction, quickly drew criticism from liberal groups on Friday.

The progressive group MoveOn.org labeled the president's proposed changes to Social Security as "unconscionable" and Democracy for America called the cuts "profoundly disturbing."

"Millions of MoveOn members did not work night and day to put President Obama into office so that he could propose policies that would hurt some of our most vulnerable people," read a statement from Anna Galland, executive director of the group.

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The budget will include an offer Obama made to House Speaker John Boehner in December, officials said. That proposal included $400 billion in savings to Medicare over 10 years.

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"The president's budget to be presented on Wednesday will show how we can invest in the things we need to grow our economy, create jobs and strengthen the middle class while further reducing the deficit in a balanced way," a senior administration official said.

    But Boehner said he and the president were never able to reach an agreement because Obama's "offers never lived up to his rhetoric," a reality he said still exists.

    "When the president visited the Capitol last month, House Republicans stated a desire to find common ground and urged him not to make savings we agree upon conditional on another round of tax increases. If reports are accurate, the president has not heeded that call," Boehner said in a statement.

    For Social Security, Obama plans to propose a switch to a key Republican request called "chained CPI," which is an inflation formula.

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    Proponents say chained CPI is a more accurate way to measure inflation than the way it's done now, which they say overstates growth in consumer prices. Some critics have said chained CPI is not a better way to measure inflation for Social Security recipients, because they spend so much on health care, which rises faster than inflation.

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    Other highlights:

    - The new budget would lead to $1.8 trillion in savings in 10 years and replace the forced budget cuts that took effect on March 1, also known as the sequester.

    - The budget includes funding for initiatives that Obama outlined in his State of the Union address, including universal access to prekindergarten education. That move would be paid for by increases to cigarette taxes.

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    -The plan would also close a current loophole that allows people to collect disability and unemployment benefits at the same time, a move that could create savings for the government, officials said.

    Obama's budget was due in February.

    Previously White House officials would only say the budget was coming the week of April 8, without revealing a specific date. Republicans were sharply critical of the delay, which came after protracted negotiations over spending cuts and tax rates.

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