Federal Budget Battle: Entitlement Cuts Are on the Table
This weekend, something new surfaced in the battle of the federal budget. President Obama suggested something that until recently was unthinkable. Cuts in entitlements, which includes Social Security and Medicare, could be used to balance the budget.
These entitlements are the largest part of federal spending, and reducing them would ding incomes, particularly of elder Americans. Obama will not be reelected, so there is little at stake beyond his popularity. For other politicians there is a risk of a revolt among older Americans who want nothing to do with elected officials who will not protect their financial flanks.
According to Reuters:
"He's reaching out to Democrats who understand we have to make serious progress on long-term entitlement reform and Republicans who realize that if we had that type of entitlement reform, they'd be willing to have tax reform that raises revenues to lower the deficit," White House senior economic official Gene Sperling said on Sunday on the CNN program "State of the Union."
Filed under: 24/7 Wall St. Wire, Economy, Politics