Officials said Thursday that those potential reductions in spending, included in last year's Obama budget, had been designed to initiate negotiations with Republicans over how to reduce future deficits and the nation's debt. But Republicans never accepted Obama's calls for higher tax revenue to go along with the cuts.President Obama has been pressured by a majority of Democrats in the House, and more than a dozen Democratic senators to drop the proposal to alter the cost of living adjustment calculator for Social Security recipients. Touted as a more accurate reflection of cost of living changes, the chained CPI actually doesn't measure the kinds of fixed spending that eat up the majority of seniors' budgets, and would result in a benefit cut that compounded as seniors aged. That's why seniors and progressive groups have fought so hard against chained CPI, and are declaring victory today, and congressional Democrats are cheering.
One official said the offer would remain on the table in the event of new budget talks but that it would not be part of the president's formal spending blueprint for fiscal 2015.[...]
The decision to drop the cost-of-living proposal was essentially an acknowledgement that Obama has been unable to conclude a "grand budget bargain" with Republican leaders, even by including in his previous budget plan a benefit reduction opposed by many Democrats.
The budget still includes more Medicare means testing (more affluent Medicare recipients already pay higher premiums), according to AP's sources. But the grand bargain is dead. Just one more humiliating defeat for everyone's favorite deficit fetishists, Simpson and Bowles.