Obama plan likely to include Medicare, Medicaid changes; take steps to curb long-term spending

Apr 15 2011

In a speech today, President Barack Obama is scheduled to outline his plans to reduce the deficit. They will likely include controversial proposals to trim Medicare and Medicaid spending while also raising taxes.

USA Today: Obama's Debt Plan Has Four Elements
President Obama will focus on four items in today's speech on reducing the federal debt, the White House says in a statement: Lower domestic spending, less defense spending, excess spending in Medicare and Medicaid, and elimination of tax breaks that favor the wealthy (Jackson, 4/13).

The Associated Press: Obama Pivots, Eyes Medicare Changes, Tax Increases
President Barack Obama, two years into a presidency that increased spending to prime a weak economy, is turning his attention to the nation's crushing debt and trying to counter a Republican anti-deficit plan with a framework of his own that tackles politically sensitive health care programs while also increasing taxes. The president on Wednesday was to deliver a speech outlining his proposal to reduce spending in Medicare and Medicaid, raise taxes on the wealthy and cut defense costs. In a pre-emptive response Tuesday, House Speaker John Boehner, R-Ohio, called any proposed tax increase "a nonstarter" (Kuhnhenn, 4/13).

The New York Times: Re-Engineering Of Medicare To Raise Tough Questions
President Obama has deep disagreements with House Republicans about how to address Medicare's long-term problems. But in deciding to wade into the fight over entitlements, which he may address in a speech Wednesday afternoon, the president is signaling that he too believes Medicare must change to avert a potentially crippling fiscal crunch (Pear, 4/12).

The Wall Street Journal: Deficit Speech Will Be Lightning Rod
Mr. Obama is expected to praise the work of a deficit-reduction commission he created last year, which proposed a series of tax, spending and entitlement-program changes that would reduce the deficit by roughly $4 trillion over 10 years. He is also expected to pledge support for a bipartisan group of six senators working on legislation that would implement the panel's recommendations (Lee and Paletta, 4/13).

ABC: Why The Gang Of Six Could Be The Best Hope To Rescue The Country From Its Red Ink Crisis
If the Gang of Six does manage to reach an agreement on a plan, it is likely to address hotly-contested issues like reforming entitlement programs such as Medicare, Medicaid and Social Security and revamping the country's tax code. It is also expected to propose further reductions in domestic discretionary spending. "Some of you are scratching your heads, saying, 'Gosh, that means mortgage interest deduction, charitable deductions, all corporate deductions.' And that's right," Chambliss said in Atlanta, according to CNN. "Every time you add one of those tax expenditures back, you've gotta pay for it" (Jaffe, 4/13).

The Washington Post:  Obama Risks Losing Liberals With Talk Of Cutting Budget
President Obama faces a growing rebellion on the left as he courts independent voters and Republicans with his vision for reducing the nation's debt by cutting government spending and restraining the costs of federal health insurance programs (Goldfarb and Wallsten, 4/12).

McClatchy: Obama's Grand Fiscal Plans Unlikely To Pass Pre-Election
President Barack Obama, in a speech Wednesday, will tell Americans more about how he favors mixing tax increases and cuts to Medicare and Medicaid to control long-term deficit spending. But he'll be in for a rough time passing any such sweeping changes through a wary Congress before the next presidential election (Margaret Taley and David Lightman, 4/12).

National Journal: Obama's Budget Plan Leaves Him Boxed In
President Obama finds himself boxed into a corner as he prepares to unveil his plan to reform entitlement programs on Wednesday.
He faces Republican momentum on spending cuts, a well-received (if untenable) first draft of a $4.4 trillion debt-reduction budget proposal by Rep. Paul Ryan, R-Wis., and nagging doubts within his party about his willingness to stick up for liberal principles. The White House considers these problems to be small flare-ups in a war of attrition. Obama's political strategy, which he has already hinted at in other budget-related speeches, is to force the belligerents to deal on his terms. He'll do this by drawing contrasts. Obama will set the limits now, and spend the next six months pushing hard to make sure Republicans can't cross them. He will not accept Ryan's proposal to turn Medicare into a voucher system, nor will he endorse the breakup of Medicaid into block grants for the states (Ambinder, 4/13).

Politico: 7 Things Barack Obama Should Say In His Speech at GWU
To Democrats, this is a no-brainer. Republicans want to privatize Medicare, the most popular government program around. It's already been incorporated into the campaign strategy books of Democrats around the country, including the president's. So the president, who has said very little about the Ryan budget, needs to make the moral case for Medicare, Democrats said. "It will be characterized as partisan, but he has to do that," said Stan Collander, a lobbyist and former Democratic Senate budget aide (Budoff Brown, Thrush, 4/13).

Politico Pro: Obama Searching For Non-ACA Cost Cuts
Obama's allies have been hinting that his deficit speech Wednesday will call for doing more to cut overspending on health care. That would shift the terms of the debate to ground that's friendlier to Democrats. Rather than arguing about how much to cut spending — a debate that favors Republicans — Obama has a better chance if he talks about ways to bring down Medicare and Medicaid spending without cutting benefits. That way, he can draw a contrast with the Paul Ryan budget the House will take up Thursday, and argue that the programs can be brought under control "without putting all the burden on seniors," as White House senior adviser David Plouffe put it on Sunday. But he'd have to make the case that the payment and delivery reforms in the Affordable Care Act should be allowed to work — because those experiments already cover much of the known ground on how to make health care more efficient (Nather, 4/13).