No. of Recommendations: 0

"The prospects:
Obama has already offered to break part of his 2008 pledge on Social Security. Twice in negotiations with GOP leaders, he agreed to adopt a new measure of inflation that would result in smaller cost-of-living adjustments, or COLAs, for Social Security recipients. Both deals fell apart. But now Obama has put forward the idea in his own proposed federal budget. If adopted, it would gradually trim benefit increases in Social Security, Medicare and other programs while raising taxes.
His proposed changes, once phased in, would mean a cut in Social Security benefits of nearly $1,000 a year for an average 85-year-old, $560 for a 75-year-old and $136 for a 65-year-old.
Obama and Republican leaders in Congress have held off-and-on talks about possible changes to entitlement programs since 2011, as part of their efforts to reduce government borrowing. But a deal remains elusive. Republicans insist any agreement must include deep spending cuts, while Obama says any deal must include more tax revenue. And many Democrats in Congress are protective of the entitlement programs that Obama now is willing to touch.
This year, House Republicans passed a budget that would eventually turn Medicare into a voucher-like program for people younger than 55. But Obama says he is dead-set against the plan, which is championed by Rep. Paul Ryan of Wisconsin. Ryan was the Republican candidate for vice president.
Obama's approach to Medicare savings, known during the campaign, is different. He'd cut payments to drug companies, hospitals and other service providers. He's also proposing to have a growing share of seniors pay higher premiums over time, based on their incomes. As well, richer people will pay a higher Medicare payroll tax.
On Medicaid, though, the government has offered to foot more than 90 percent of the bill for states that expand the program to bring in millions of uninsured low-income adults. States worry Washington might shift costs back to them later.
For years, budget hawks have insisted that huge entitlements must be on the table for meaningful fiscal discipline to be achieved in Washington. Whether the effort to rein in their spending succeeds or fails, it's clear they're on the table now.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.