Obama concedes to some GOP demands in budget proposal

President Obama urged Republican lawmakers to meet him “halfway” on the deficit during a speech on his 2014 budget proposal in White House Rose Garden on Wednesday. (The Washington Post)

President Obama announced his proposed 2014 budget Tuesday. The spending plan contains both proposals to increase tax revenue and to decrease spending on various programs, including Medicare and Social Security:

Obama’s deficit-reduction plan mirrors the offer he made in December to House Speaker John A. Boehner (R-Ohio) in negotiations over the so-called fiscal cliff. At the time, Obama called for $1.2 trillion in new taxes. The fiscal cliff deal included roughly $600 billion in new revenues over the next decade, with the bulk of the money coming from higher rates on households earning more than $450,000 a year.

Obama is now proposing to collect the rest of the revenue by limiting itemized deductions — other than charitable contributions — for families in the top tax brackets and by imposing a minimum tax rate of 30 percent on households earning over $1 million a year.

Another $1.2 trillion in savings would come from cutting spending over the next decade on programs across the federal government. But the most politically significant reductions would come from trimming payments to Medicare beneficiaries and providers, and applying a less-generous measure of inflation to government programs, including Social Security.

Ezra Klein and Evan Soltas write that by including both liberal and conservative objectives in the budget, Obama could force Republican legislators to take a clear position:

Today’s budget is the White House’s effort to reach the bedrock of the fiscal debate. Half of its purpose is showing what they’re willing to do. They want a budget compromise, and this budget proves it. There are now liberals protesting on the White House lawn. But the other half is revealing what the GOP is — or, more to the point, isn’t — willing to do. Republicans don’t want a budget compromise, and this budget is likely to prove that, too.

They note, however, that this approach also carries risks for Democrats:

Obama risks pushing a final compromise to the right. It is unlikely that Republicans can accept Obama’s initial budget offer, no matter how much good will it embodies. They will have to respond with a counteroffer. If the White House wants to continue pursuing a deal, they’ll then have to respond with something more compromised than even their initial compromise. And so on.

As Rep. Chris Van Hollen (D-Md.), an important Congressional ally of the president, said last week:

“I have some tactical concerns about the White House approach and some substantive concerns. . .

The president has essentially said this is his end point and this is a compromise proposal. Republicans have rejected this as a compromise. From the Republican perspective, the president’s budget is the starting point for negotiation.”

The left reacted angrily to the White House’s proposal to limit Social Security benefits, protesting outside the White House on Tuesday. Post opinion writer Dana Milbank reports:

In reality, the progressives’ street protest did Obama a favor. . . It strengthens his hand and helps him negotiate a better deal with Republican leaders, who can now see that liberal backbenchers and interest groups can sometimes be as intransigent as conservatives.

Find a comprehensive analysis of the budget by agency here, and keep reading for more coverage from The Post.

Analysis | A political void awaits Obama’s plan

It isn’t clear who will negotiate the budget on behalf of Republicans, writes Lori Montgomery:

The Republican architects of past agreements — House Speaker John A. Boehner (Ohio) and Senate Minority Leader Mitch McConnell (Ky.) — have taken themselves off the playing field, saying they are not interested in any more backroom talks with the White House.

House Republicans are also resisting appointing a conference committee that would be led by House Budget Committee Chairman Paul Ryan (R-Wis.) and Senate Budget Committee Chairman Patty Murray (D-Wash.) and would bring together negotiators from both chambers.

Mental health | Obama proposes $235 for new programs

“We have to tell Congress it’s time to strengthen school safety and help people struggling with mental health problems get the treatment they need before it’s too late,” Obama said in a speech on gun violence Monday night at the University of Hartford in Connecticut.

The new budget plan will propose $130 million for programs that train teachers and other adults to help recognize the early signs of mental illness in students. ...

Another $50 million would go toward training master’s-level mental health specialists, such as psychologists, nurses and counselors, who work in schools.

Wonkblog | A $4.6 trillion difference

House Republicans see an average deficit of 0.6 percent over the next decade, while Obama’s looking at 2.5 percent. The difference there is 1.9 percent of GDP, or more than $4 trillion. ...

That $4.6 trillion represents a stark choice. If used as Obama hopes, it means tens of millions more Americans with health insurance, a more generous food stamp program, more college aid, and more investments in biomedical research, among others. If used as the Republicans hope, it means less debt and lower taxes on the wealthy.

Both budgets bring the deficit down to more-than-manageable levels. Republicans, of course, are looking to eliminate the deficit entirely. But the White House brings the deficit down to 1.7 percent of GDP. Achieving that goal would mean America’s debt load would be falling as a percentage of GDP, which is the measure most economists look to to see if our finances are stable.

Winners and losers | What you may have missed

Jennifer Rubin | GOP: Benefits of budget overstated

The cuts to providers are phony, as Congress inevitably rides to the rescue with measures such as the “doc fix” so that medical providers will still take patients. So the only real savings here are $130 billion over a decade. We are more than  $16 trillion in debt . Under Obama’s budget it would go to more than $25 trillion.

The Plum Line | Why Obama wants a grand bargain

The president’s approach of proposing a compromise budget is justified by his opponents’ intransigence, Greg Sargent argues:

A Grand Bargain is good for Democrats in general, because it essentially would lock in a medium-term agreement over core disputes — about the safety net and about the size of government, and who should pay for it — that have produced a debilitating stalemate in Washington.

Yes, Republicans would continue railing about government spending, the thinking goes, but no one would listen, since they would have already endorsed a deal stabilizing the deficit. This would deprive Republicans of the ability to focus attention on one of their core targets — Big Government — as a way to avoid grappling with other issues, such as jobs and long-term middle class economic security, immigration, guns, and perhaps even climate change.

GOP: Cut social security but don’t tax the rich

Discuss this topic and other political issues in the politics discussion forums.

Max Ehrenfreund is a blogger on the Financial desk and writes for Know More and Wonkblog.
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