Narrowing a "fiscal cliff" negotiating gap, President Barack Obama is backing off what had once been ironclad positions.
A new proposal handed to House Speaker John Boehner on Monday drops Obama's long-held insistence that taxes rise on individuals earning more than $200,000 and families making more than $250,000. He is now offering a new threshold of $400,000 and lowering his 10-year tax revenue goals from the $1.6 trillion he had argued for a few weeks ago.
Obama also abandoned his demand for permanent borrowing authority. Instead, he is now asking for a new debt limit that would last two years, putting its renewal beyond the politics of a 2014 midterm election.
In making his offer, Obama stiff-armed Republican demands to increase the eligibility age for Medicare from 65 to 67, a goal Democrats strongly reject. He also sought to contain cuts in Medicare and other health care programs to about $400 billion over 10 years, less than what Republicans want. And he is continuing to seek spending on unemployment assistance and on public works projects.
Obama's willingness to reduce future cost-of-living increases in Social Security would also mean smaller annual increases in government pensions and veterans' benefits. Annual adjustments to income tax brackets would be smaller, pushing more people into higher tax brackets.
Over time, because annual adjustments to the poverty level would be smaller, the new index could reduce the number of people eligible for programs such as Medicaid, Head Start, food stamps, school lunches and home heating assistance.
To avoid some of that risk, Obama wants lower-income recipients to receive protection against any loss from scaling back future cost-of-living increases, people familiar with his plan said.