By Amie Parnes, Alexandra Jaffe and Justin Sink - 04/05/13 09:13 PM EDT
President Obama’s plan to include entitlement cuts in his budget was met with jeers from the right and the left on Friday.
Speaker John Boehner (R-Ohio) accused Obama of holding necessary reforms “hostage” to demands for higher taxes, while liberal Democrats warned of an uprising over the cuts.
The criticism from both ends of the political spectrum highlighted the stark divide over how to rein in the nation’s red ink. The White House and Congress are eyeing a summer battle over raising the debt ceiling that could be used as a vehicle for a deficit-reduction package.
Obama’s plans came the same day a new labor report added to doubts about the economic recovery. The Bureau of Labor Statistics report found employers added only 88,000 jobs in March — much fewer than expected.
Obama had floated the new formula known as chained CPI to Boehner in one-on-one talks in December. The Speaker rejected the idea as insufficient then, given Obama’s demands for tax hikes, and he offered a similar message on Friday.
“If the president believes these modest entitlement savings are needed to help shore up these programs, there's no reason they should be held hostage for more tax hikes,” he said in a statement. “That’s no way to lead and move the country forward.”
Sanders, for his part, said he was “terribly disappointed” with the proposal and would do everything in his power to stop it.
Congressional Progressive Caucus co-chairmen Reps. Raúl Grijalva (D-Ariz.) and Keith Ellison (D-Minn.) echoed Sanders's opposition to chained CPI.
“Republicans have been trying to dismantle Social Security ever since President Roosevelt proposed it during the Great Depression. We should not try to bargain for their good will with policies that hurt our seniors, especially since they’ve been unwilling to reduce tax loopholes for millionaires and wealthy corporations by so much as a dime,” they said in a joint statement.
White House press secretary Jay Carney said Obama's approach represents a “middle of the road” outlook that would help reduce the deficit.
Besides chained CPI, Obama would also reduce spending on Medicare through lower payments to healthcare providers and pharmaceutical companies.
Carney cast the proposals “not the president's ideal approach” but as a “serious compromise proposition” that shows Obama “wants to get things done.”
“It's not what he would do if he were king,” Carney said.
But the White House said the president is only willing to agree to the entailment cuts if Republicans agree to tax increases on the wealthiest Americans and corporations.
Boehner said Friday that Obama should not “make savings we agree upon conditional on another round of tax increases.”
“At some point we need to solve our spending problem, and what the president has offered would leave us with a budget that never balances,” Boehner said. “In reality, he’s moved in the wrong direction, routinely taking off the table entitlement reforms he’s previously told me he could support.”
Aides to Boehner emphasized that the president's chained CPI proposal would affect not just benefit increases, but also the way tax brackets are adjusted annually. They pointed to an Associated Press analysis that found that while the inflation adjustment would reduce federal spending by about $130 billion over the next decade, the change in how tax brackets were calculated would generate $100 billion in higher taxes.
“It’s not just a concession on spending,” said Boehner aide Brendan Buck. “In fact, the way the administration proposes doing it, it's nearly equal parts [tax] revenue and spending cuts.”