President Obamas budget due for release Wednesday already faces bipartisan opposition in Congress over planned tax increases on the wealthy and possible reductions in spending on some health and social programs.
His plan for the fiscal year starting Oct. 1 would reduce the deficit by about $1.8 trillion over the next 10 years in place of the $1.2 trillion remaining in automatic cuts required by sequestration. It would replace across-the-board cuts with more flexibility in meeting the targeted reductions as sought by some members of Congress.
President Obama would achieve the savings by hiking taxes, mainly on the wealthy whom he has regularly targeted for new revenue, and by slowing the rise in spending on Social Security and other popular government programs with a change in how the consumer price index is calculated.
Republicans, as might be expected, are already objecting to President Obamas proposal to raise nearly $580 billion in new taxes. It includes a proposed 28 percent cap on reductions for couples earning more than $250,000 and individuals earning more than $200,000 along with higher tobacco taxes to finance expanded prekindergarten education and limits on tax-sheltered retirement savings.
But a second proposal aimed at slowing the grown of spending on entitlement programs could also hit middle-income taxpayers. President Obamas plan embraces a Republican-backed proposal to revise how the CPI is calculated to reduce automatic increases in Social Security, veterans benefits, federal pensions and other benefits tied to the CPI. However, it would also be felt in the tax code, since it affects how tax brackets are adjusted. Middle-income workers also could be asked to pay more.
Rep. Paul Ryan, House budget Committee chairman, commended the president for taking aim at entitlement reform. House Speaker John Boehner, though, objected that entitlement reform should not be held hostage to tax hikes.
However, Democrats and liberal supporters of President Obama have also taken aim at his proposal with its slowdown on entitlement spending that could limit future benefit hikes to retirees and disability recipients of Social Security.
Sen. Bernie Sanders, an independent who usually sides with Democrats, said he will do everything in my power to block the CPI change that attacks the middle class at a time when the middle class is in great duress.
Changes to Social Security calculations also meet with opposition from AARP, the senior-citizens lobby, and the liberal group MoveOn.org despite repeated warnings that entitlement spending has to be controlled to rein in deficits.
The presidents fiscal blueprint is just one of three plans together with the House GOP proposal and a Senate Democratic plan.
A presidential spokesman has warned congressional Republicans against taking a my way or the highway approach to upcoming budget negotiations, but President Obama will also have to make sure members of his own party in Congress get that same message, if there is to be a budget by Oct. 1.