The News Courier in Athens, Alabama

State and Nation

April 10, 2013

Obama budget: Trim Social Security, tax wealthy

(Continued)

The president's plan to establish a program to offer preschool to all 4-year-olds from low- and moderate-income families would be financed by the higher tax on tobacco, which the administration said would raise $78 billion over a decade.

The administration said its proposals to increase spending would not increase the deficit but rather would be paid for either by increasing taxes or making deeper cuts to other programs.

Among the proposed cuts, the administration wants to trim defense spending by an additional $100 billion and domestic programs by an extra $100 billion over the next decade. However, those cuts would actually be less than the automatic spending cuts they would replace in the "sequester" that would have trimmed government spending by $1.2 trillion over 10 years. Obama's budget, if adopted, would eliminate future sequester reductions. Those cuts began taking effect on March 1 with an initial $85 billion in reductions.

The Obama budget proposes cutting $400 billion from Medicare and other health care programs over a decade. The cuts would come in a variety of ways, including negotiating better prescription drug prices and asking wealthy seniors to pay more.

It would obtain an additional $200 billion in savings by scaling back farm subsidies and trimming federal retiree programs.

The most sweeping proposal in Obama's budget is a switch in the way the government calculates the annual cost-of-living adjustments for the millions of recipients of Social Security and other benefits. The new method would take into account changes that occur when people substitute goods rising in price with less expensive products. It results in a slightly lower annual reading for inflation.

The switch in the inflation formula would cut spending on government benefit programs by $130 billion over 10 years, although the administration said it planned to protect the most vulnerable, including the very elderly. The change would also raise about $100 billion in higher taxes because the current CPI formula is used to adjust tax brackets each year. A lower inflation measure would mean more money taxed at higher rates.

Text Only
State and Nation
Photos


Poll

Which foreign crisis is the biggest threat to the security of the United States?

Russia-Ukraine
Israel-Palestine
Iraq
None of the above
     View Results
Facebook
AP Video
Kerry: Humanitarian Cease-fire Efforts Continue Raw: Corruption Trial Begins for Former Va Gov. The Carbon Trap: US Exports Global Warming UN Security Council Calls for Gaza Cease-fire Traditional African Dishes Teach Healthy Eating 13 Struck by Lightning on Calif. Beach Baseball Hall of Famers Inducted Israel, Hamas Trade Fire Despite Truce in Gaza Italy's Nibali Set to Win First Tour De France Raw: Shipwrecked Concordia Completes Last Voyage Raw: Sea Turtle Hatchlings Emerge From Nest Raw: Massive Dust Storm Covers Phoenix 12-hour Cease-fire in Gaza Fighting Begins Raw: Bolivian Dancers Attempt to Break Record Raw: Israel, Palestine Supporters Rally in US Raw: Air Algerie Flight 5017 Wreckage Virginia Governor Tours Tornado Aftermath Judge Faces Heat Over Offer to Help Migrant Kids Kangaroo Goes Missing in Oklahoma More M17 Bodies Return, Sanctions on Russia Grow
Twitter Updates
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Stocks
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Business Marquee