Obama's Not So Progressive Budget

This coming week will mark the beginning of the budget debate in the United States and will be fought as feistily as ever. Obama is expected to release his budget proposal later this week but we already know much of what will be contained in it. Unfortunately it is not particularly progressive, it will contain the following:

Ø  It is expected to reduce the deficit by $1.8 trillion in 10 years.

Ø  Change the structure of social security (including chained CPI)

Ø  Means testing parts of Medicare

Ø  $400 billion in healthcare savings/cuts

Ø  $200 billion from other areas

But don’t fret though as they are including some more progressive ideas:

Ø  Expanding access to pre-K

Ø  Set limits for tax preferred benefits for the wealthy

This has been met with shock and dismay by many liberals in the United States. The most painful part for Democrats is the chained CPI in social security. In ways Social Security to Democrats is much like the NHS to Labour, it is a sacred cow which must never be cut. What chained CPI actually does is cut the benefits to seniors collecting it. Currently the average 85 year old receives $1,200 a month, the chained CPI will result in a cut of $1,000 per annum! For the average 65 year old the cut will be $650. The budget also cuts benefits for veterans, the proposed changes will mean that a vet who was disabled in a war and is currently 30 will lose $1,400 pa by the time they are 45 years old, $2,300 pa by the time they are 55 years old and $3,200 pa by the time they are 65 years old! This has really got liberals up in arms, there is even talk of primarying Democrats who vote for the changes to social security.

There is a real chance that this can be defeated by Congress for several reasons. The Social Security changes are so offensive to many Democrats that many will vote against it, this could cause a real upset in the Senate where Democrats have control. For liberals this is where Republican’s hatred of Obama could come in handy; many Republicans in the House and Senate have such a vociferous hatred for Obama that they tend to oppose anything he proposes. If a significant proportion of Democrats and Republicans in either the House or Senate were to oppose the President’s deal, it could be defeated.