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The Nation

April 13, 2011

Obama pivots, eyes Medicare changes, tax increases

(Continued)

WASHINGTON —

The president is wading into a potential political thicket. Liberals fear he will propose cuts in prized Democratic programs like Medicare and Medicaid, the health care programs for older adults, the disabled and the poor, and in Social Security. Moderates worry that his plan could unravel bipartisan deficit-cutting negotiations. And Republicans already are poised to reject any proposal that includes tax increases.

For the White House, the speech at George Washington University comes as Obama pushes Congress to raise the limit on the national debt, which will permit the government to borrow more and thus meet its financial obligations. The country will reach its debt limit of $14.3 trillion by May 16. The Treasury Department has warned that failure to raise it by midsummer would drive up the cost of borrowing and destroy the economic recovery.

Republicans have said they would not raise the debt ceiling without deficit reduction, or at least without the White House showing progress toward sizable cuts in long-term spending. White House spokesman Jay Carney reiterated the White House view Tuesday that passage of a higher debt ceiling should not be encumbered with deficit-reduction legislation.

Pressure from Congress, however, eventually could result in a debt ceiling deal that includes fiscal discipline measures, though not necessarily a wholesale restructuring of government benefit programs.

Obama will brief Congress' bipartisan leadership in the contents of his speech Wednesday morning at the White House.

Obama's speech comes just before Congress votes on a $38 billion package of spending cuts that averted a government shutdown last week. Despite widespread antipathy toward the deal in both parties, House Republicans and the White House predicted the plan, which covers spending for the next six months, would pass.

As for the bigger, long-term deficit proposal, the White House was keeping a tight lid on details. But Carney made clear the president would call for changes in Medicare and Medicaid. Obama also was expected to resurrect the tax increases on wealthy Americans that he put off in December as part of a tax deal with Congress.

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