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Social Security cuts will not be in Obama’s 2015 budget

White House spokesman Josh Earnest blames the decision to drop the "chained CPI" proposal on Republicans' refusal to offer something in return
W.H. explains exclusion of Social Security cuts from budget 02:54

President Obama’s 2015 budget proposal will not include a budget gimmick that amounts to a cut to Social Security payments, the White House acknowledged Thursday.

Mr. Obama previously embraced the idea of a "chained" consumer price index (chained CPI) -- a change in the way inflation is measured -- as a gesture of goodwill toward Republicans who said they were interested in crafting a compromise deal for deficit reduction.

While the chained CPI will no longer be part of the budget, White House deputy press secretary Josh Earnest on Thursday said, “This offer from the president remains on the table.”

It is no longer in the president’s budget, Earnest said, for a couple of reasons.

For one thing, Republicans have so far refused make any concessions of their own in exchange for the chained CPI.

“The president is not going to be in a position where he’s going to ask senior citizens and middle class families to make sacrifices in pursuit of reducing the deficit and not ask the wealthy and well-connected to do so, too,” Earnest said. “The second you bring up the prospect of closing tax loopholes, Republicans walk away.”

Furthermore, he noted the U.S. has already made “substantial progress in reducing the deficit.”

When the White House created a bipartisan panel in 2010 to come up with ways to reduce the deficit (unofficially called the Simpson-Bowles Commission), its aim was to build a plan to reduce the deficit from 9 percent of gross domestic product (GDP) to 3 percent. But given steps the government has taken since then to reduce the deficit, along with changing economy, the deficit is now slated to fall below 2 percent of GDP by the end of this 10-year window, Earnest noted.  

Whether Democrats and Republicans could still reach some kind of “grand bargain” to further reduce the deficit -- which would potentially include both entitlement reform and new tax revenue -- “will have to be up to Republicans,” Earnest said.

Republicans were quick to slam the president’s decision to leave the chained CPI out of this year’s budget proposal. Brendan Buck, press secretary for House Speaker John Boehner, R-Ohio, said it amounts to Mr. Obama “throwing in the towel.”

“This reaffirms what has become all too apparent: the president has no interest in doing anything, even modest, to address our looming debt crisis,” Buck said. “The one and only idea the president has to offer is even more job-destroying tax hikes, and that non-starter won’t do anything to save the entitlement programs that are critical to so many Americans.”

The chained CPI would save the government an estimated $163 billion over 10 years by measuring inflation more conservatively (about 0.2 or 0.3 percentage points more slowly) than the standard CPI. The CPI is used to make cost-of-living adjustments to Social Security benefits, so payments to Social Security recipients would increase more slowly under a chained CPI. Tax brackets are also indexed to inflation, so the chained CPI would also bring in more tax revenue -- a move that would have the biggest impact on the middle class.

Progressive activists -- who were irate after Mr. Obama included the chained CPI in his 2014 budget proposal last year and campaigned against it -- hailed the latest development.

"This is a huge progressive victory -- and greatly increases Democratic chances of taking back the House and keeping the Senate,” Stephanie Taylor, co-founder of the grassroots group the Progressive Change Campaign Committee, said in a statement. “Now, the White House should join [Democratic Senator] Elizabeth Warren and others in pushing to expand Social Security benefits to keep up with the rising cost of living."

At least one liberal group, Democracy for America, expressed only cautious optimism.

"While it's great that President Obama has figured out, a year later, that it's a bad idea to push for cuts to Social Security benefits, progressive won't be dancing in the streets until we're confident that there aren't other earned benefit cuts buried in the details of the final budget,” DFA executive director Charles Chamberlain said in a statement.

Earnest would not comment on any other specific measures Mr. Obama’s budget will include to reduce the deficit. The budget proposal, he said, “will demonstrate the president is focusing his domestic policy making agenda on ideas for expanding opportunity for the middle class.”

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