Tax Increases, Medicare Cuts Expected In Obama Budget

President Obama will release his budget plan Monday, which is already getting its share of Republican detractors. In it, Obama will propose tax increases on the wealthy and $360 billion in cuts to Medicare and Medicaid, mostly in the form of payment cuts to providers and drug companies.

The Wall Street Journal: Budget Sets Stage For Year-End Clash
President Barack Obama's budget plan, to be released Monday, will serve both as an outline of his re-election campaign message and a blueprint of the White House strategy for another clash looming after the November elections. At year's end, the president and Congress face several major deadlines: the scheduled expiration of Bush-era tax cuts, $1.2 trillion in politically unpopular spending cuts — half of which would fall on defense spending — and the likely need to raise the federal borrowing limit. Medicare doctors also will face a large pay cut if Congress doesn't change the formula for their payments. ... Mr. Obama's budget plan will offer an alternative course: replace the scheduled year-end spending cuts with a combination of tax increases on the wealthy and some modest reductions to Medicare and Medicaid (Paletta and Meckler, 2/13).

The Washington Post: Jacob Lew Defends Obama's Spending Plan
White House Chief of Staff Jacob J. Lew on Sunday dismissed Republican criticism of President Obama's latest spending plan, arguing that it charts a long-term strategy for tackling the national debt while offering a short-term boost to the recovering economy. ... An additional $360 billion would come from trimming spending on federal health programs, such as Medicare and Medicaid, the biggest drivers of future borrowing. Those savings would come primarily from cuts to providers, including drug companies, rather than the sort of broad restructuring that many analysts say will be necessary to control costs. House Budget Committee Chairman Paul Ryan (R-Wis.) has criticized Obama for failing to offer a long-term cost-control strategy, such as his proposal to privatize Medicare for future retirees, which has come under fierce attack by Democrats (Montgomery, 2/12).

Los Angeles Times: Obama Budget Is Preview Of Election Battle
House Republicans are expected to offer a budget that renews their call for a major overhaul of Medicare, although it is not clear whether they will endorse the voucher program proposed last year by House Budget Committee Chairman Paul D. Ryan (R-Wis.). ... But the president's budget, like his previous proposals, steers clear of major changes. Ryan's Medicare proposal became a forceful weapon for Democrats last year, and many lawmakers on Capitol Hill have urged the White House not to undercut that issue. Obama's budget will repeat a call for $360 billion in reductions to Medicare and Medicaid, administration officials said, but avoid broader changes to the programs (Hennessey and Parsons, 2/13).

Politico: Obama's Budget Meant As Challenge
(T)he budget rollout in Washington will show a fourth year of $1 trillion-plus deficits and a 2013 shortfall of $901 billion — nearly twice the share of GDP that Obama predicted four years ago. The debate was already under way Sunday morning as White House chief of staff Jack Lew sparred across the television screen with House Budget Committee Chairman Paul Ryan, a Wisconsin Republican who at 42 is almost exactly the age Lew was when he oversaw the most recent balanced budgets in the 1990s during the Clinton administration (Rogers, 2/13).

Reuters: Obama Budget To Propose Election Year Spending On Jobs, Roads
President Barack Obama will project lower deficits and request billions of dollars for infrastructure and jobs in his 2013 budget, laying out a plan he will sell to voters in November, despite Republican criticism of rising federal debts. ... The budget must still spell out where the axe falls on domestic spending, with $360 billion expected to be saved by controlling growth in the costs of Medicare and Medicaid, federal health care programs for elderly and poor Americans (Bull and Bohan, 2/10).

The Associated Press: Obama's Budget Headed To Congress
President Barack Obama is sending Congress a new budget that seeks to achieve $4 trillion in deficit reduction over the next decade through cuts in government spending and higher taxes on the wealthy. ... The Obama budget seeks $360 billion in savings in Medicare and Medicaid mainly through reduced payments to health care providers, avoiding tougher measures advocated by House Republicans and the deficit commissions that said it was critical to restrain health care costs (Crutsinger, 2/13).