President's budget to call for Medicare, Medicaid cuts - but no major changes

Feb 13 2012

News organizations got a preview of the multi-trillion-dollar federal budget President Barack Obama is expected to propose on Monday.

The Wall Street Journal: Budget to Call for Taxes on Wealthy
The budget's broad themes, according to a draft outline viewed by The Wall Street Journal, contrast sharply with Republican proposals for smaller government and lower tax revenue. Mr. Obama repeats many of his previous budget prescriptions, resists sweeping cuts to government programs, preserves the structure of Medicare and Medicaid, and calls for close to $1.5 trillion in tax increases on higher-income Americans over 10 years (Favole and Paletta, 2/10).

Reuters: Obama Budget Declares Election-Year Tax Battle
Federal government spending has already been capped for 2013 in a deal Obama and Republicans reached last summer to raise the U.S. debt ceiling. ... The budget must still spell out where the ax falls on domestic spending. But it identifies $360 billion in savings from Medicare and Medicaid, federal healthcare programs for elderly and poor Americans, over 10 years (Bull and Cowan, 2/11).

Bloomberg: Obama Budget Plans $901 Billion Deficit Next Year With Tax Rise
Much of the president's budget plan repeats proposals that have already been rejected by Republicans, including a 10-year, $3 trillion deficit reduction package offered to Congress in September. ... The plan, for the fiscal year that begins Oct. 1, would wring $360 billion in savings out of Medicare and Medicare over the next decade (Runningen and Faler, 2/11).

The Associated Press: Obama Budget Predicts 1.3T Deficit For 2012
The White House says that Monday's budget will contain many items from a September submission to a failed congressional deficit "supercommittee," which deadlocked over tax increases and how much to cut popular benefit programs like Medicare. ... it's commonly assumed that presidential politics will prevent Democrats and Republicans from renewing efforts for a broader budget agreement, though negotiations on Capitol Hill are under way in efforts to renew jobless benefits for the long-term unemployed and a 2 percentage point cut in payroll taxes and prevent a 27 percent cut in Medicare payments to doctors that's the product of an outdated funding formula (Taylor, 2/10).

Los Angeles Times: Obama's Budget Plan Draws Upon His Previous Proposals
Over the decade, discretionary spending would drop from 8.7% of gross domestic product to 5%, officials said. To achieve that, the August agreement mandates steep and unpopular cuts in defense and domestic spending, a result of the super committee's failure to forge a broader deficit reduction plan. The president's budget seeks to head off those cuts by offering up a new version of the deficit reduction package he introduced in September. The plan claims more than $4 trillion in deficit reduction. It would accomplish this through the expiration of President George W. Bush-era tax cuts on upper-income Americans, closing tax loopholes, winding down the military spending in Iraq and Afghanistan and cutting costs in Medicare and Medicaid (Hennessey and Parsons, 2/10). 

The New York Times: Obama Budget Bets Other Concerns Will Trump the Deficit
House Republican leaders have already promised to follow the president's plan with a budget document of their own that is largely based on last year's blueprint drafted by Representative Paul D. Ryan, Republican of Wisconsin and the chairman of the House Budget Committee. The new Ryan plan may temper his proposal to replace guaranteed, government-paid Medicare with vouchers that would be used to purchase private health insurance plans. Instead, Mr. Ryan is likely to propose a new version that offers traditional Medicare as an alternative to vouchers, mirroring the Republican presidential candidate Mitt Romney's plan as well as the one Mr. Ryan drafted with Senator Ron Wyden, Democrat of Oregon (Weisman, 2/10).

Politico: Obama Budget Goes Big On Highway Spending
Among individual agencies, the impact of the new spending caps is evident. Biomedical research at the National Institutes of Health is frozen at $30.7 billion; much the same is true of the Food and Drug Administration's discretionary appropriations. And the end result is that agencies like the FDA are more and more dependent on user fees raised by some of the same industries they oversee. ... The full array of budget documents still won't be formally released until Monday morning, but senior administration officials discussed the outlines in a phone call with reporters Friday evening even as agencies began briefing Congress in greater detail (Rogers, 2/11).