President Barack Obama is urging congressional leaders to accept cuts to Social Security and the Medicare health program in a deal to raise the US debt ceiling, The Washington Post has reported.
Obama is due to host leaders of the Republican-led House of Representatives and Democratic-held Senate at the White House early Thursday to avert an early-August default that could unleash global economic shockwaves.
At the meeting, Obama plans to tell the senior lawmakers that policymakers should take dramatic action amid a rare consensus emerging over the size and scope of the nation\'s ballooning budget concerns, according to the Post.
The newspaper said his plan includes proposal for significant reductions in spending for Medicare, a health program for the elderly, and Social Security, a social insurance entitlement program that includes retirement payments.
While the move could ensure potential cooperation from the president\'s Republican foes, it would also mark a major concession from his fellow Democrats, who have promised to prevent any assault on health and retirement benefits in the protracted budget battle.
"Obviously, there will be some Democrats who don\'t believe we need to do entitlement reform. But there seems to be some hunger to do something of some significance," a Democratic official told the Post. "These moments come along at most once a decade. And it would be a real mistake if we let it pass us by."
The White House is now seeking over $4 trillion in cuts from annual budget deficits over the next decade, as well as plans to stabilize borrowing and prevent explosive budget crises over rising health costs and retirement benefits for an aging population.
Citing sources with knowledge of the talks, the newspaper said Obama has discussed his debt-reduction plan with Republican House Speaker John Boehner, including potential measures to revamp the tax code and cut entitlement spending, but failing to reach an agreement.
Thursday\'s talks were due to be part of a final major push to reach a deal to raise the congressionally set limit on US borrowing, now set at $14.29 trillion, in the face of a US budget deficit expected to hit $1.6 trillion this year.
By August 2, the government will have to begin withholding payments -- to bond holders, civil servants, retirees or government contractors -- and the White House has urged an agreement by July 22 to have time to turn any deal in to legislation and vote on it.
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