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Obama to exclude Social Security from deficits plan

Sep 15, 2011, 10:22 a.m.

By Laura MacInnis

WASHINGTON (Reuters) - President Barack Obama will not include reforms to the Social Security retirement program in his deficits proposals to Congress next week, the White House said Thursday.

Obama upset many fellow Democrats during this summer's bitter negotiations with Republicans on raising the debt ceiling when he expressed a willingness to change the way government benefits are linked to inflation.

He saw the move as a way to ensure the federal pension program remains viable in the long-term, but liberal supporters who champion entitlement programs for the elderly felt he was giving up too much ground to Republicans.

White House spokesman Amy Brundage said Obama's long-awaited deficit reduction plan, to be unveiled Monday, "will not include any changes to Social Security."

"As the president has consistently said, he does not believe that Social Security is a driver of our near and medium term deficits," she said.

With Obama's shift in stance, the six Democratic members of a congressional "super committee" charged with tackling the federal deficit would not have to make immediate concessions, giving them more negotiating room with their Republican counterparts. The super committee is trying to find more than $1.2 trillion in budget savings over 10 years by November 23.

Obama's change of heart on the inflation formula could help lower the heat from his liberal base, and could also help Democratic members of Congress who are up for re-election.

Obama also expressed a willingness in the summer debt talks with House of Representatives Speaker John Boehner, a Republican, to raise the eligibility age for Medicare health benefits to 67 from 65.

But The Wall Street Journal said Thursday the White House was now looking at cuts to providers and increased premiums for wealthier recipients of Medicare, the healthcare program for the elderly.

A senior administration official said final decisions have not been made about Obama's recommendations to the super committee.

While Obama's proposals will not be binding on the committee, they will likely feed into 2012 campaign rhetoric and give the president an opportunity to counter the Republican image of him as a tax-and-spend liberal.

Obama is expected to recommend more than $3 trillion in budget savings next week, although Republican members of the super committee have already questioned whether that is achievable.

Boehner, the top U.S. Republican, will call Thursday for the super committee to consider tax reform that would close loopholes but not raise rates, as well as changes to entitlement programs such as Medicare and Social Security.

He will also argue in a speech that Republicans and Democrats should work together to reduce business regulations and lower taxes and spending to boost job creation and economic growth, according to a summary provided by his office.

(Additional reporting by Andy Sullivan and Thomas Ferraro; Editing by Ross Colvin and Vicki Allen)

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