As Obama and Republicans look for $2 trillion in savings, seniors' benefits might change
While the political jousting continues, President Obama and congressional Republicans are moving closer to a multi-tiered deal that would include changes in Social Security benefits, tax reform, increases in various user fees, and large-scale cuts in annual spending, according to numerous sources close to the negotiations.
No agreement exists and both sides continue to shadow box even as they move cautiously around the underlying policy and unpredictable political reaction any one or all of these potential shifts might incite. On Social Security, it's unclear if Obama is willing to raise the retirement age or merely accept changes in inflation-adjustment calculations that would reduce benefits but not alter the program's basic architecture. Administration officials have said a proposal from Obama's Simpson-Bowles deficit-reduction commission to raise the Social Security income cap are among the ideas being considered if there is a comprehensive deal in the making.
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Outsiders in Name Only
In the nitty-gritty of negotiations, Republicans have made clear to Obama if he wants to spare domestic "investments" funded through discretionary spending he need only embrace structural changes to Social Security or Medicare. Republicans contend altering current benefit schedules would extend solvency for Social Security and put bigger deficit-reduction numbers on the board, giving Obama more room for annual discretionary spending. And both sides are still fighting over how much to cut future defense spending within the context of annual discretionary spending. Democrats want deeper cuts than the GOP and the GOP wants to guard against any legislative bias in favor of defense cuts over non-defense discretionary savings. Like every other issue, much has been discussed and dissected -- but nothing has been agreed to.