Obama budget to drop trims to cost-of-living increases

Associated Press

WASHINGTON

President Barack Obama will propose an election-year budget that would drop reductions he had previously embraced in federal benefits, officials disclosed Thursday. He also will ask Congress to approve about $56 billion in new or expanded programs, stepping back from aggressive efforts to tackle long-term government deficits and debt.

Obama is scrapping his previous offer to trim cost-of-living increases in Social Security and other benefit programs. That idea had been a central component of his long-term debt-reduction strategy, even though it was considered odious by many Democrats.

The decision amounts to a White House acknowledgement that Obama has been unable to conclude a “grand budget bargain” with GOP leaders, even by proposing a benefit reduction embraced by Republicans and opposed by many in his own party. But it is also a testament to the recently diminished importance of government red ink as a driving political issue amid falling deficits and public exhaustion over threats of federal shutdowns and defaults.

Officials said that some potential spending reductions included in last year’s Obama budget had been designed to initiate negotiations with Republicans over how to reduce future deficits and the nation’s debt. But Republicans never accepted Obama’s calls for higher tax revenue to go along with the cuts. The new budget for fiscal 2015 is to be released March 4.

“The president was willing to step forward and put on the table a concrete proposal,” White House spokesman Josh Earnest said.

Republicans promptly portrayed the White House move as abandoning any commitment to fiscal discipline.