DawgTalkers.net Forums DawgTalk Everything Else... Obama Renews Offer to Cut Social Safety Net

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President Barack Obama raised anew the issue of cutting entitlements such as Medicare and Social Security as a way out of damaging budget cuts, a White House official said on Sunday, as both sides in Washington tried to limit a fiscal crisis that may soon hit millions of Americans.

Signaling he might be ready to explore a compromise to end automatic spending cuts that began late Friday, Obama mentioned reforming these entitlement programs in calls with lawmakers from both parties on Saturday afternoon.

"He's reaching out to Democrats who understand we have to make serious progress on long-term entitlement reform and Republicans who realize that if we had that type of entitlement reform, they'd be willing to have tax reform that raises revenues to lower the deficit," White House senior economic official Gene Sperling said on Sunday on the CNN program "State of the Union."

Republicans have long argued that the only way to tame budget deficits over the long haul is by slowing the cost of sprawling social safety net programs.

These include the Social Security retirement program and Medicare and Medicaid healthcare programs for the elderly, disabled and poor that are becoming more expensive as a large segment of the U.S. population hits retirement age.

While Obama also has proposed some savings on these programs, he has insisted that significant new tax revenues be part of the deficit-reduction formula, an idea Republicans so far reject.

(Read More: Obama to Republicans: Can We Just Move On?)

Budget fights in Congress took their most serious turn in years on Friday when $85 billion in indiscriminate spending cuts known as "sequestration" began to kick in after both parties failed to agree on how to stop them.

Democrats predict the automatic cuts could soon cause air-traffic delays, meat shortages as food safety inspections slow down, and hundreds of thousands of furloughs for federal workers.

As the budget battles rage on in Washington, sources said Obama plans to nominate on Monday Sylvia Mathews Burwell to head to White House Office of Management and Budget. A veteran of the Bill Clinton White House, Burwell is president of the Walmart Foundation, which handles the corporation's charitable efforts.

Neither Sperling nor White House spokesmen would provide further details on Obama's conversations on Saturday with members of Congress, and they did not identify the lawmakers to whom the president spoke.

Obama's mention of entitlement reform may help bring Republicans to the table to halt the cuts. Republican leaders also made soothing noises on Sunday about the need to avoid a government shutdown on March 27, when funding runs out for most federal programs.

Boehner's Maximum Effort

House of Representatives Speaker John Boehner, interviewed on NBC's "Meet the Press," said he "absolutely" would do whatever it takes to keep the government operating. Toward that end, he will seek House passage this week of a "continuing resolution" to fund the government through Sept. 30, when the fiscal year ends.

Lately, some rank-and-file Democrats and Republicans have been sending signals that they are willing to compromise to end a two-year-old deadlock over tax and entitlement reforms.

Last week, conservative Republican Senator Lindsey Graham of South Carolina said he was open to raising $600 billion in new tax revenue if Democrats accepted significant changes to Medicare and Medicaid as part of a long-term budget deal.

A few days later, liberal Democratic Senator Ben Cardin of Maryland told Reuters that he had discussed with Senate Democratic leader Harry Reid the possibility of replacing the automatic spending cuts with a mix of entitlement reforms and tax increases.

"Democrats know we have to do entitlement reforms and Republicans know they have to do revenues (increases)," Cardin said.

Now that they are in place, the $85 billion in spending cuts must be carried out by Sept. 30 if no alternative is found. Half of those cuts would hit the military with the rest scattered over thousands of other domestic programs.

Economists have warned that such a heavy dose of belt tightening over such a short period will slow U.S. economic growth and potentially cost 750,000 jobs.

Speaking of the search for alternatives, Boehner said on "Meet the Press:" "I don't think anyone quite understands how it gets resolved."

No matter how Obama and Congress resolve the 2013 battle, this round of automatic spending cuts is only one of a decade's worth of annual cuts totaling $1.2 trillion mandated by the sequestration law.

Deep Divisions Still

Deep divisions between Democrats and Republicans have soured previous negotiations.

Slamming the door on Democrats' demands for new tax hikes, Boehner said that Obama "got $650 billion of higher taxes on the American people on January the first. How much more does he want?" He was referring to the higher tax rate that began in the new year on households making more than $450,000 a year.

"It's time for the president and Senate Democrats to get serious about the long-term spending problem that we have," Boehner said.

In the meantime, both Democrats and Republicans were hoping to win the immediate fight over the automatic spending cuts so that they are best positioned in any upcoming battles over long-term budget deficits.

(Read More: Despite Cliff Deal: 'Nothing Really Has Been Fixed')

Senate Republican leader Mitch McConnell on Sunday played down the severity of the automatic cuts, describing them as modest.

"We're willing to talk to him (Obama) about reconfiguring the same amount of spending reduction over the next six months," McConnell said on CNN. "The American people look at this and say: 'Gee, I've had to cut my budget more than this,' - probably on numerous occasions over the last four years because we've had such a tepid economy now for four long years."

At the heart of Washington's persistent fiscal crises is disagreement over how to slash the budget deficit and gain control of the $16.7 trillion national debt, bloated over the years by wars in Iraq and Afghanistan and government stimulus for the ailing economy.

Government red ink also rose over the last decade after the enactment of across-the-board tax cuts in 2001 and 2003 secured by President George W. Bush.
http://www.cnbc.com/id/100515721?__sourc...rememberMe=null

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Fudge taxes.



Let's cut a bunch of spending first.



JMO.

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exactly... the way they are now, they will raise taxes ot generate an extra 500 billion, and THEN lower spending by 100 billiong, and claim victory.

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But for cryin out loud,, anyone with a brain knows that we can't get this thing fixed until we get more revenue

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I must not have a brain in my head. WE NEED TO CUT SPENDING! Period. End of story. There is no other solution - and even that likely will not fix the mess we are in, but it would be nice to at least try.

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Yeah. I turn down overtime when I have debts to pay off because all I know is I need to cut spending?

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There needs to be a balance. On some level I get that the spending is addressing a key behavior problem that needs to go if it'll be fixed over the long haul, but the idea of not needing increased revenue to tackle the problem wreaks of stubborn, baseless ideology.

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The balance is already there - in fact I'd argue that taxes are way too high as it is not balanced in any way shape or form in the current system. How much more do you want from the "rich"? You don't think they pay enough already? That is a stubborn, baseless ideology since the top 10% of earners already fund 71% of the governments take - guess they should fund more since they've got the money after all . We've increased spending somewhere around 25% over the last 4 years. Why would we do that during a recession?!?!?!? Oh yeah, liberals think they can spend their way out of a mess. I'm so sick and tired of this BS. This country is toast and it really upsets me - more so for my son than myself as at least I got to enjoy the offerings of this once great nation for at a minimum 1/2 of my life. I cannot believe how cynical I have become

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You don't think they pay enough already? That is a stubborn, baseless ideology since the top 10% of earners already fund 71% of the governments take

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You don't think they pay enough already? That is a stubborn, baseless ideology since the top 10% of earners already fund 71% of the governments take

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Considering the "rich" used to have a 91% tax rate, nope.

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Fudge taxes.



Let's cut a bunch of spending first.



JMO.

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Wrong answer you gotta do both or it will never work.. NEVER.

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So in order to say "hey, program x, y and z aren't working, lets cut them and save the money" we need to raise taxes first?

Besides, Obama already got his tax hike, so it's time to start cutting spending. We can't tax our way out of this mess.

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LOL Oh, I'm gonna get killed on this one..

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Wrong answer.



You have to cut spending first......this can't be a dollar for dollar deal.


OK.....raise taxes by a dollar so to say and cut spending by $5.....I could go for that.




Cut spending or you aren't getting another nickel out of me if I have a say.

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Compromise was being worked on until hard core conservatives stepped in where Boehner was working with Obama. They demanded and have stuck with no compromise.

Medicare needs readjustment and the idea of entitlements needs to be redefined.

There are many who are getting more than a free ride off of this government.

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Wrong answer.



You have to cut spending first......this can't be a dollar for dollar deal.


OK.....raise taxes by a dollar so to say and cut spending by $5.....I could go for that.




Cut spending or you aren't getting another nickel out of me if I have a say.

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Wrong, you have to do both,, Raise revenue and cut spending. You cannot tax our way out of this and you can't cut our way out of it.. you need a blend of both.

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Wrong, you have to do both,, Raise revenue and cut spending. You cannot tax our way out of this and you can't cut our way out of it.. you need a blend of both.

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BUT....it has to be REAL cuts - not "cuts" as in "well, we were going to get a 2% increase for this program, but we "cut" 1/10 of a percent, so now we only get to spend 1.9% more."

We see and hear almost every day about all the "cuts" gov't. says they have made, yet spending increases year after year. How is that a "cut"? THAT is the problem. Gov't. doesn't "cut" anything but the rate of increase.

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What am I missing out on, that you "Partisan Dawgs" seem so sure of?

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Clem, great post... I will state from the beginning that I am also not a macroeconomic guru but I love the analogy and the challenge and comparing how your personal situation is, and is not, analogous to our national problem.

I read your post, then went and did some work thinking about it for a little while and I see your post like this...

In your analogy, if you and your wife are the citizens of these United States, then you are the haves and your wife is the have-nots. (Please don't think I'm disparaging your lovely wife in any way, just go with me here. ) The have-nots either can't or won't provide for themselves, therefore the haves must work harder, give more, and sacrifice more because, through no fault of their own, they have to pay for somebody elses way who can't or won't pay for themselves.

On a family level this is easy because you love your wife, you see how hard she's trying, you see her sacrificing with you, you promised to support her for better and worse, etc... on a national level this creates animosity as the haves see themselves working harder, keeping less, and paying more into this black hole so a lot of others can do nothing, can make no effort, show no appreciation, only disdain, for the efforts of the others that are supporting them. I'm sure you shared the sacrifice equally but imagine a national level where you are providing the hamburger for your wife but because you are working so hard you decide you deserve a steak.... and your wife, who is still eating for free, hates you for having a steak when she can't have one?

Now let's look at the economics of this... What you did doesn't seem to me like raising taxes, it seems to me that what you did was grow the economy.. you didn't take all of your private lessons and say, "Hey look, I'm having a hard time so instead of $50 a lesson I'm going to need $75." You went out and found new students.. which is more analogous to creating new jobs, not increasing taxes.

Now let's look at the opportunity cost of your efforts. You, as the "have" in this analogy, worked harder and increased your revenue.... you used a significant portion of it to support your wife, the "have-not".... you could have used that money to hire a younger teacher to work under you, thus allowing them to begin building their own student base, making a living for themselves, as well as paying you a percentage of their income for providing the name and the facilities, so you make even more money... but you couldn't because that money was spent somewhere else.... where it wasn't spent toward growth, it was spent toward sustaining somebody else, thus creating stagnation...

As far as spending, you had manageable debt to begin with, which means you are not the federal government from the last 12 years... in good times you didn't spend all you had and then some creating future obligations as if bad times were never going to happen... kudos to you. shame on the government.

So what is my final conclusion? Based on your analogy, you can tread water and sustain yourselves by the "haves" working harder, giving more, sacrificing to support the "have nots" but when did you see real growth and real improvement? When you had spending under control and the "have not" got a job.

Love you man, glad to hear you and your wife are doing well.

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Exactly, like you and YTown said, we need REAL cuts.

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Exactly, like you and YTown said, we need REAL cuts.

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Somehow it gets glossed over, but I said that same thing. These cuts to spending increases are really cuts.. we need to cut..

But we also need to increase revenue.. it's never one sided.

Try running a business, cutting only gets you so far..

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Exactly, like you and YTown said, we need REAL cuts.

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Somehow it gets glossed over, but I said that same thing. These cuts to spending increases are really cuts.. we need to cut..

But we also need to increase revenue.. it's never one sided.

Try running a business, cutting only gets you so far..

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The government isn't a business and doesn't generate income from products or services. Otherwise I agree with you.

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You use the post office as an example of a government run business, and you want people to listen to you at the same time?

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I actually laughed out loud when I read this.

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Exactly, like you and YTown said, we need REAL cuts.

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Somehow it gets glossed over, but I said that same thing. These cuts to spending increases are really cuts.. we need to cut..

But we also need to increase revenue.. it's never one sided.

Try running a business, cutting only gets you so far..

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The government isn't a business and doesn't generate income from products or services. Otherwise I agree with you.

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Actually, it is partially a business. The Post Office does indeed provide goods and services for a fee. But that aside, no, it's not a business. But it should be run like one.

You have X coming in, that means you can't spend more than X. If you do, you go broke eventually.

You got a couple of choices to remedy the situation, cut costs and increase income. If you do one without the other, you are just spinning your wheels. Cut too deep, soon, you won't be able to provide the services people pay taxes for. Overtax people and soon, nobody will have enough left to live on.

You have to find a way to increase revenue and if you can find one that doesn't overtax people, then all the better. and YES, you need REAL TAX CUTS.

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You use the post office as an example of a government run business, and you want people to listen to you at the same time?

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You use the post office as an example of a government run business, and you want people to listen to you at the same time?

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I actually laughed out loud when I read this.

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Actually, Republicans gave on Taxes. Obama hasn't given at all on spending. (No matter what bookkeeping tricks he uses to claim cuts based on ending the Iraq War, and double counting the "savings")

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