President Barack Obama formally unveiled the administration’s fiscal 2014 budget on Wednesday with some familiar proposals for tax reform, along with key concessions on entitlement reform.
Some of the proposals, for controlling spending on Medicare and Social Security by using a formula known as “chained CPI” tied to the Consumer Price Index, had already been floated by the administration, and would also have an effect on the calculation of tax brackets (see Obama Budget to Include Tax Bracket Changes). The proposal had come under consideration during earlier negotiations with Speaker of the House John Boehner, R-Ohio, on raising the debt ceiling. However, they are opposed by many Democratic lawmakers who worry that it would cut benefits for future retirees. Obama’s budget proposal would soften the impact on low-income retirees and no current beneficiaries would see their benefits reduced. The changes in Medicare are estimated to save $305 billion over 10 years.
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