Obama's debt-reduction plan: $3 trillion in savings; changes to Medicare, Medicaid less aggressive than previously considered

Sep 20 2011

The proposal, which is scheduled for release today, will include $320 billion in health care savings, but it will not raise Medicare's eligibility age. Half of its savings result from new tax revenue. President Barack Obama is also sending a warning to congressional Republicans: If they send him a bill that cuts programs for poor and elderly Americans but doesn't impose sacrifice on corporations or ask others to sacrifice, he will veto it.

The Washington Post: Obama's Debt-Reduction Plan: $3 Trillion In Savings, Half From New Tax Revenue
But the president won't call for any changes in Social Security, officials say, and is seeking less-aggressive changes to Medicare and Medicaid than previously considered. He will propose $320 billion in health care savings but will not include raising the Medicare eligibility age from 65 to 67, officials said. Any reduction in Medicare benefits would not begin until 2017, they said. Other cuts in domestic spending would bring the total spending savings to $580 billion. About $1 trillion in savings is also expected from winding down the wars in Iraq and Afghanistan (Goldfarb, 9/18).

The New York Times: Obama Plan To Cut Deficit Will Trim Spending By $3 Trillion
President Obama will unveil a deficit-reduction plan on Monday that uses entitlement cuts, tax increases and war savings to reduce government spending by more than $3 trillion over the next 10 years, administration officials said (Cooper, 9/18).

Los Angeles Times: Obama Deficit Plan Includes Raising $1.5 Trillion From Tax Overhaul
President Obama on Monday will put forward a plan to slash more than $3 trillion from the nation's deficits by winding down the wars in Afghanistan and Iraq, raising taxes on wealthier Americans, closing tax loopholes, and cutting the cost of Medicare and other government health programs, senior White House officials said. Obama, who is to lay out his proposal in a Rose Garden speech at 10:30 a.m., will also issue a specific warning to congressional Republicans: If they pass a bill that cuts programs for poor and elderly Americans without asking profitable corporations and others to sacrifice, he will veto it (Nicholas, 9/18).

The Wall Street Journal: New Obama Deficit Plan
The president will also propose changes to Medicare and Medicaid that would reduce the deficit by about $300 billion over 10 years. He won't propose increasing the Medicare eligibility age, people familiar with the plan said, and won't include changes to Social Security. … A senior administration official also said Mr. Obama will make clear that he will veto any bill that makes changes to Medicare without tax increases on the wealthy. … The plan, which Mr. Obama will unveil Monday in remarks at the White House, will be submitted to a congressional super committee that was created to craft a deficit-reduction plan of at least $1.2 trillion over 10 years. The committee's efforts follow on the more than $900 billion in spending cuts that were part of a deal Mr. Obama made with congressional Republicans in August (Lee and Paletta, 9/19).

The Associated Press/NPR: Obama To Propose $1.5 Trillion In New Tax Revenue
Drawing a bright line with congressional Republicans, President Barack Obama is proposing $1.5 trillion in new tax revenue as part of his long-term deficit reduction plan, according to senior administration officials (Kuhnhenn, 9/18).

Politico: Barack Obama To Unveil $3 Trillion Deficit-Cutting Plan
President Barack Obama will release a plan Monday to cut the federal deficit by $3 trillion over the next decade, drawing half the savings from new tax revenue and sparing Medicare recipients from having to wait longer to collect benefits, senior administration officials said Sunday (Budoff Brown and Epstein, 9/18).

USA Today: Obama To Pitch $3 Trillion More In Deficit Cuts
The deficit-reduction plan to be submitted to a special congressional committee would cut $1.5 trillion through tax increases; $1.1 trillion through winding down the wars in Iraq and Afghanistan; $580 billion from reductions in entitlement programs such as Medicare and Medicaid; and $430 billion from reduced interest costs (Jackson, 9/18).

Bloomberg: Obama to Propose $1.5 Trillion in Taxes
President Barack Obama will call for $1.5 trillion in tax increases mostly targeting the wealthy over the next decade as part of a plan to cut the U.S federal deficit by $3 trillion, administration officials said. Obama's plan, which he is scheduled to unveil at 10:30 a.m. Washington time today at the White House, will form his recommendations to the 12-member congressional committee charged with finding ways to trim at least $1.5 trillion from the deficit. … Obama will threaten to veto any deficit plan that reduces Medicare benefits unless wealthy Americans also are asked to pay more in taxes, according to the officials, who briefed reporters on condition of anonymity. While Obama will include Medicare-benefit cuts in his proposal, the administration will insist on tax increases as a condition, they said (Dorning, 9/19).

CNN Money: Obama To Unveil $3 Trillion In Debt Cuts
[I]n remarks on Monday morning, the president will make clear he'll veto any debt-reduction legislation that takes "one dime away from Medicare benefits without asking the wealthy to pay their fair share," the official said (Sahadi,9/18).

Reuters: Obama Deficit Plan Aimed At Base
President Barack Obama will lay out a plan on Monday to cut the U.S. deficit, striking a populist tone aimed at galvanizing his Democratic Party base ahead of the November 2012 election. Obama will vow to veto any cuts proposed for the government-run Medicare health program for the elderly unless Congress agrees to raise taxes on companies and the wealthy. ... Medicare, for elderly and disabled Americans, and Medicaid for the poor, are viewed by analysts as the biggest contributors to long-term U.S. deficits, which many voters see as a key issue in the election (Bull, 9/19).

ABC News: Obama To Propose $4.4 Trillion Deficit Reduction Plan
For Medicare, the president will not propose any change in the retirement age but he will offer savings of $248 billion and extend the Medicare solvency for three years. Some 90 percent of the savings would come from reducing overpayments in Medicare and there will be beneficiary changes, to take effect until in 2017 (Compton, 9/19).

Roll Call: Deficit Panel Tries Working In A Bubble
Leadership sources said it is unlikely the super committee will be swayed by positions taken by anyone outside the room unless that direction is coming from some agreed position among Obama, Speaker John Boehner and Senate Majority Leader Harry Reid (D-Nev.) -; a scenario not inconsistent with Congress' last two big agreements on the nation's finances. Those deals include a compromise that averted a government shutdown and an agreement on raising the debt ceiling (Shiner, 9/19).

Roll Call: Obama To Make $4 Trillion Pitch To Cut Deficit
Of the $580 billion in cuts to entitlement programs, $248 billion will come from Medicare and $72 billion will come from Medicaid or non-Medicare health-related savings, with no changes in retirement age planned and no beneficiary changes until 2017 (Shiner, 9/18).

National Journal: Obama Proposing $1.5 Trillion In New Taxes
The White House also warned not to expect the president to offer up things that he had agreed to as compromises over the summer when he and Boehner were striving for a "grand bargain." … That means the president will not be recommending any raising of the eligibility age for Medicare. He will call for $248 billion in Medicare savings and another $72 billion in savings from Medicaid and other health programs over the next 10 years. An official said that roughly 90 percent of the Medicare savings come from reducing overpayments to providers. He said that any changes affecting beneficiaries would not take effect until 2017 (Condon, 9/18).