Obama budget changes Social Security: Are Republicans on board?

President Obama proposed changes to entitlements including Social Security in his new budget, prompting hopes of a 'grand bargain.' Republicans mixed qualified approval with skepticism.

President Obama clearly hoped to stir Washington into action with his 2014 budget plan Wednesday, proposing changes to Social Security and Medicare that have angered liberal members of his party.

But the Republicans who have urged the president to take such steps responded to the budget with a less-than-ringing endorsement.

While the budget shows a willingness to make changes to the nation’s entitlement programs and potentially jump-start negotiations, the distance that remains between the two sides is so large that the summer’s talks look more likely to produce a modest deal rather than a sweeping accord, some say.

“At least he put something here that shows a willingness to address entitlements,” said House Budget Committee Chairman Paul Ryan (R) of Wisconsin. “That shows me that there’s a glimmer of hope to getting to an agreement at the end of the day, but we’re a long way from getting there right now.”

There has been hope that the need to raise the debt ceiling this summer could provide the opportunity to knit together fiscal issues ranging from entitlement and tax reform to revising the "sequester" cuts in a long-sought "grand bargain" to fix to the nation’s finances.

Mr. Obama's budget "keeps alive the possibility of a bargain, grand or otherwise," said Robert Bixby, executive director of the Concord Coalition.

Primarily, Obama proposes changing the way Social Security calculates cost-of-living adjustments – a revision that would save the program money but, critics say, put a greater burden on the poor and elderly. He also suggested some trims to Medicare.

Conservative lawmakers in both chambers offered measured praise for the president Wednesday.

“I am encouraged, however, by the president’s willingness to begin addressing Medicare and Social Security – the primary drivers of our national debt,” said Sen. Deb Fischer (R) of Nebraska, a freshman lawmaker. “I hope to work with the president to reform and save these critical programs.”

Even House Speaker John Boehner offered a small nod to the White House, offering that Obama deserves “some credit” for proposing entitlement changes – even if those alterations come up short of what the president offered the Ohio Republican during closed-door negotiations in the past.

Senate Republicans left a dinner last month with the president with a sense that Obama would give more ground on entitlement reform than he had previously let on. A second dinner with some 10 Republican senators Wednesday evening is expected to feature a lengthy discussion of entitlements.

“There’s a lot of talk between Democrats and Republicans in the Senate right now about, 'Could we find that sweet spot and do something significant?' ” says Sen. Tim Kaine (D) of Virginia.

But Obama's recommendations suggest that any deal this summer is likely to be a smaller, “down payment” approach.

The president, for example, is calling for $500 billion in additional tax revenue over the next decade. While that's lower than the nearly $1 trillion in tax increases staked out in the Senate’s Democratic budget, Republicans don't want any. 

Meanwhile, much of Obama's $1.5 trillion in spending cuts would simply replace the $1.2 trillion in automatic spending cuts from the “sequester,” meaning they are not new spending cuts, according to the GOP's reckoning. By contrast, the aggressive House Republican budget would make broad cuts to equalize government spending and revenue within 10 years.

In negotiating with a president who sharply disagrees with Republicans, then, the idea should be to find the biggest deal possible – and that won’t be one that fixes everything that budget-watchers hope can be fixed, said Representative Ryan.

“I don’t think we should talk about a grand bargain,” he said. “A grand bargain implies you can fix the entire problem ... but we’re so far from that with what the president has and the Senate has passed ... that I think we should rationalize our expectations to getting a down payment on the problem.”

How might that be done? Leaders in both chambers want it handled through “regular order” – meaning attempting to reconcile the stark differences between the House and Senate budgets through negotiations. While that approach would be preferable, Ryan said, lawmakers should be open to any opportunity to get to "yes."

“Ultimately, I think that’s the path we ought to follow,” he said. But “I don’t want to foreclose any opportunities in the future by commenting on what the process should or should not be or the method we use to get something done.”