New Obama Budget Proposes Social Security Cuts

Money Talks News

While the White House’s proposed budget for this year won’t be officially released until later in the week, details of it began leaking out Friday.

The Associated Press reports one proposed change would lower the rate of increase for entitlement programs, affecting Social Security more than others. An anonymous official first revealed that the cuts would come through a change to the way inflation is measured.

By switching to a method called “chained CPI [Consumer Price Index],” Social Security, veterans’ benefits and government pensions would grow more slowly. It would also effectively raise taxes because it would shift tax brackets, according to The Wall Street Journal.

The proposed budget would reduce the federal deficit by an estimated $1.8 trillion over 10 years. The CPI change would account for about $230 billion of those savings (12.8 percent) and is something Republicans have been demanding. But there’s something in the budget for everybody to hate, because it would also eliminate an estimated $580 billion in tax breaks for the wealthy.

This is just a proposal, of course, and Congress will spend plenty of time arguing about it. The budget year begins Oct. 1. If you’re worried about Social Security, be sure to check out our story about how to get more of it.

This article was originally published on MoneyTalksNews.com as 'New Obama Budget Proposes Social Security Cuts'.

More from Money Talks News

View Comments