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Lawmakers, Advocates Criticize Obama’s Budget Plan Over Health Cuts

Lawmakers and advocacy groups are criticizing the early details of President Obama's fiscal year 2014 budget proposal, after news reports indicated that the proposal will include $400 billion in spending reductions from health care programs, the Wall Street Journal reports.

The proposal is expected to be released on Wednesday (Hook/McCain Nelson, Wall Street Journal, 4/5).

About Obama's Proposal

According to an overview provided to reporters by the Obama administration on Friday, the proposal would eliminate the cuts under sequestration and replace them with other measures that would reduce the federal deficit by $1.8 trillion over the next decade (Goldfarb, Washington Post, 4/5).

The sequester cuts include a 2% reduction to Medicare reimbursement rates for providers. The proposal also would increase tobacco taxes to pay for an early childhood education initiative.

Some of the proposal's Medicare spending reductions would come from negotiating better prescription drug prices for beneficiaries, but the plan also calls for higher-income beneficiaries to pay more. Savings also would come from reducing Medicare payments to care providers, including hospitals.

The proposal also would create a new way of calculating inflation increases -- known as chained CPI -- that would result in slower cost of living benefit increases for elderly U.S. residents who receive federal benefits (Calmes, New York Times, 4/5).

White House spokesperson Jay Carney on Friday said that although it is not Obama's "ideal budget proposal," it "is a budget proposal that represents a good-faith compromise position that reflects the offer he made to the speaker of the House that was widely seen as a compromise" (Davis, USA Today, 4/7).

An anonymous senior administration official said, "The president has made clear that he is willing to compromise and do tough things to reduce the deficits, but only in the context of a package like this one that has balance and includes revenues from the wealthiest Americans and that is designed to promote economic growth." The official added "that things like CPI that Republican leaders have pushed hard for will only be accepted if congressional Republicans are willing to do more on revenues" (Calmes, New York Times, 4/5).

Boehner, GOP React To Obama's Budget Proposal

However, House Speaker John Boehner (R-Ohio) and other Republicans dismissed Obama's budget plan. Boehner said, "[T]here's no reason [the president's proposed entitlement savings] should be held hostage for more tax hikes" (Wall Street Journal, 4/5).

He described the savings as "modest," adding that Obama has "moved in the wrong direction, routinely taking off the table entitlement reforms he's previously told me he could support" (Parnes et al., "On The Money," The Hill, 4/5).

Democrats, Advocacy Groups Oppose CPI Proposal

Meanwhile, Obama's proposed cuts to federal entitlement programs drew opposition from Democrats and various groups, including the AFL-CIO, the American Legion, AARP and the National Organization for Women, The Hill's "Ballot Box" reports (Jaffe, "Ballot Box," The Hill, 4/5).

Congressional Progressive Caucus co-chairs Reps. Raúl Grijalva (D-Ariz.) and Keith Ellison (D-Minn.) criticized Obama's chained CPI proposal. In a joint statement they said, "We should not try to bargain for [Republicans'] good will with policies that hurt our seniors, especially since they've been unwilling to reduce tax loopholes for millionaires and wealthy corporations by so much as a dime" ("On The Money," The Hill, 4/5).

Damon Silvers -- policy director of AFL-CIO -- called Obama's plan to alter the benefits calculations "bad policy." Silvers in an email wrote, "It is unconscionable to ask seniors, people with disabilities and veterans who are barely making it to be squeezed even tighter at a time when corporations and the wealthiest 2% are not paying their fair share of taxes, despite soaring profits." He asked labor activists to "make some noise about it" (Tau, "Politico 44," Politico, 4/6).

Neil Sroka -- a spokesperson for Democracy for America -- said, "Any Democrat [who] votes to cut Social Security, Medicare and Medicaid benefits is at risk at facing a primary challenge." He added, "Siding with the president in support of these cuts is tantamount to declaring war on the Democratic base who helped elect every one of these Democrats" ("Ballot Box," The Hill, 4/5).

Obama's FY 2014 Budget Proposal Would Boost VA Funding

In related news, White House Chief of Staff Denis McDonough on Friday said Obama's proposal would boost the Department of Veterans Affairs' budget by $63.5 billion to support various veterans' programs including increased mental health services, the New York Times reports (Dao, New York Times, 4/5).

Obama's spending plan is expected to include a 13.6% increase in discretionary spending, to $2.5 billion (Vogel, "Federal Eye," Washington Post, 4/5).

The proposal would also raise funding for mental health services by 7.2%, or $7 billion, to help the department expand treatment for PTSD and sexual trauma (Vogel, Washington Post, 4/5). The budget proposal also would attempt to alleviate the backlog of disability claims by proposing VA spend $300 million on two programs designed to digitize disability claims for wounded veterans (Dao, New York Times, 4/5).

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