All morning I’ve been hearing that the proposed budget that President Obama is finally getting around to submitting to Congress contains some sort of grand compromise of cuts to Social Security and Medicare, along with tax increases. (You didn’t think he would be satisfied with the last round of tax increases, did you?) See The New York Times for how it’s being reported by the MSM. Here’s the opening paragraph.
President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say
But here’s the thing, his budget doesn’t really cut anything. Medicare and Social Security spending would still grow under this budget proposal.
Instead of the “cuts” heralded in headlines today, the president’s budget writers are seizing on a formula that simply tweaks the rate of growth. While it could still significantly reduce the projected 10-year budget deficit, it won’t cut anything from what seniors, veterans, students and others who rely on the programs get.
In fact, one Senate analysis reveals that the Obama “cut” will lower slightly the growth of Social Security benefits over the next 10 years to 5.9 percent from 6.1 percent.
Ditto for reports on the “cuts” to Medicare. The plan is to reduce future payments in the program to doctors and hospitals, though wealthier recipients might see higher premiums.
Read the whole thing. This is no grand compromise, it’s just new accounting.