President Barack Obama unveiled his $3.77 trillion budget proposal Wednesday, offering a mix of new revenues and spending cuts intended to draw bipartisan support.
The proposed budget has been widely interpreted as a sign that Obama is trying to entice Republicans to compromise on a broad budget deal, as it includes a number of items that the GOP insisted upon in past budget talks. It even features one big entitlement change that the president has said he personally opposes — and that has driven progressives to protest in front of the White House. Indeed, both sides have assailed the president's budget (this cartoon sums it up well).
Still, based on the GOP's past positions, there's plenty of items in Obama's budget that many liberal commentators and Beltway reporters believe Republicans should at least theoretically be pleased to see.
1. Social Security cuts
The biggest Republican lure in Obama's budget is the adoption of a new method of calculating the cost of living increases tied to Social Security with what's called "chained CPI." The government uses the Consumer Price Index (CPI) to determine the rate of inflation, and by extension to calculate spending on social welfare programs. The proposed change, which Politico's Glenn Thrush and Byron Tau call a show of good will on Obama's part, would reduce federal spending over time by reducing the amount of money the government pays out to entitlement recipients.
It's a change Republicans have insisted on for some time. Last year, an aide to Speaker of the House John Boehner (R-Ohio) said Boehner wanted chained CPI more than any other entitlement cut. And as the Washington Post's Greg Sargent points out, Senate Minority Leader Mitch McConnell declared last November that chained CPI was something that "would get Republicans interested in new revenue."
As the New York Times' Jackie Calmes notes, Obama has said he opposes the change, but that he included it specifically to placate Republicans.
Mr. Obama and other administration officials have been emphasizing that he does not favor the change itself, but has included it in his budget along with other concessions that he made in his final compromise offer to Mr. Boehner in December before their budget talks fell apart. The president said he would not let the change become law unless Republicans in turn dropped their opposition to higher taxes on the wealthy. [New York Times]
2. Medicare cuts
In addition to chained CPI for Social Security, the budget would cut $400 billion from federal health programs, most of it from Medicare. It would do so primarily by lowering payments to healthcare providers and expanding "means testing" — the process of determining who qualifies for what benefits based on individual income — in a way that would make wealthier seniors pay more out of pocket for their care.
In last year's fiscal cliff talks, Republicans asked that means testing be included in a compromise deal, and the party also floated the idea during 2011 budget negotiations. Higher premiums for wealthy recipients was another policy change that McConnell declared would bring Republicans to the table on new revenue last year.
Democrats, however, have vociferously opposed the idea for years, with Nancy Pelosi declaring a decade ago that "Democrats stand united in our opposition to means-testing."
3. Reduced cuts to defense
In a little-noticed piece of the budget, Obama proposes replacing the automatic budget cuts that were to sap $500 billion from the Pentagon with a smaller $100 billion cut. Restoring funding for the military was a top Republican priority in the failed talks to avert the so-called sequester, the automatic set of spending cuts that kicked in this year when Congress failed to reach a bipartisan deal.
"Along with the well-advertised cuts to Medicare and Social Security benefits, this is something that should appeal to the GOP," says Businessweek's Joshua Green. "Indeed, when you cut through all the numbers, Obama and House Republicans are only $100 billion apart (the GOP budget restores the full $500 billion)."
4. Beefed up embassy security
Obama's budget includes $4 billion to increase security at U.S. embassies abroad, an issue that became a political hot potato last year following a deadly attack on the U.S. embassy in Libya. After that attack, Democrats blamed Republicans for cutting funding for embassy security in past budgets, while Republicans assailed the administration for lax security at the Benghazi embassy and held a heated congressional inquiry into the matter.
According to Reuters, this new sum includes $2.2 billion to increase security and construction at the Benghazi embassy, as was recommend by an independent review of the attack.
5. Deficit reduction
Republicans have been clamoring for deficit reduction, and Obama's budget delivers. Through cuts to entitlement programs and other areas in the federal budget, the president's 10-year plan includes $1.8 trillion in deficit reduction by 2024, with spending cuts totaling twice the amount of new revenues needed to hit that total.
"What Obama is asking of the GOP on revenue is simply not as tough a political swallow for the party, especially in an off year, as what he's asking of the Democrats on spending," says Roll Call's David Hawkings.
Though the total amount of deficit reduction is less than what Republicans have asked for before — they've argued for a balanced budget within 10 years — it is more than what the president has offered in the past.
"When it comes to deficit reduction, I've already met Republicans more than halfway," Obama said on Wednesday.
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