Obama drops proposed cuts to entitlements

WASHINGTON – Seeking to present a unified Democratic front in an election year, President Barack Obama is backing away from a proposal to restrain spending on entitlement programs, focusing instead on economic priorities likely to please his party’s base.

Obama’s next budget will not include a change that would have slowed cost-of-living increases for Social Security and other programs, the White House said Thursday.

The proposal, which was included in last year’s budget, was reviled by liberal Democrats but billed by Obama as a good-faith gesture intended to draw Republicans into deficit-reduction talks.

Senior advisers, however, acknowledged that the era when a “grand bargain” budget deal was conceivable had come to an end – at least for now. Rather than dangle an offer at Republicans, the president’s budget, due for release in early March, would reflect only his spending priorities – however unlikely they are to pass the GOP-led House.

A president’s budget is always an aspirational exercise often ignored by lawmakers with their own plans. But it is even less important this year because Congress last fall hashed out a two-year fiscal blueprint negotiated by Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis.

Still, the document could prove helpful to Democrats at the start of the election season by focusing attention on the party’s economic agenda, which Obama’s congressional allies hope to highlight to draw sharp contrasts with Republicans.

Next week, House Democrats will take steps intended to force a vote on their proposal to raise the federal minimum wage to $10.10 an hour. The Senate could act on a similar measure in March, after making another attempt to extend long-term unemployment benefits.

Democrats face long odds in their bid to recapture the House in this year’s elections, while their Senate majority appears increasingly fragile. The party, though, is seeking to reclaim the offensive after a bruising period dominated by problems with the rollout of the online marketplaces for Obama’s health care law.

The president’s decision to drop his divisive offer to reduce projected spending on entitlement benefits eliminates one of the party’s main internal debates.

The president’s now-abandoned proposal to replace the consumer price index with a new formula for cost-of-living increases called “chained CPI” would likely have resulted in savings in programs such as Social Security and Medicare. Obama had indicated his support for chained CPI in battles with Republicans over the debt ceiling and government funding, starting in 2011.

It was most recently a bargaining chip in the fiscal-cliff discussions in late 2012, though many Democrats expressed strong opposition. Obama offered it again in his budget plan last year, when the White House said there was “a little bit more optimism” about concessions from Republicans.

A White House spokesman said the offer “remains on the table” if there are any new efforts to reach a major deficit-reduction deal of the sort Obama had discussed with Boehner in the past.

The White House said the president’s budget would adhere to the Murray-Ryan deal, but would propose $56 billion in spending dubbed an “Opportunity, Growth, and Security Initiative” to be paid for by closing loopholes, making budget reforms and raising taxes on tobacco.

Those programs would include projects the president has pushed in recent years without winning much GOP support, such as a network of manufacturing research centers, expansion of public preschool, and an energy efficiency initiative in which states would compete for federal support.