That change — supported by some in both parties — would mean smaller inflation-based benefit hikes for Social Security recipients, veterans and others and save $230 billion over ten years. The president's plan would shield some of the neediest from the reduction. For Social Security, the change is expected to mean a reduction of 0.3 percent annually in cost-of-living increases.
The National Committee to Preserve Social Security and Medicare blasted the proposal, saying the formula was “stingier and less accurate” and would mean benefit cuts for millions of seniors.
The change would also affect individual income taxes because the personal exemptions, standard deductions and brackets are adjusted upward each year to account for inflation. Smaller increases for inflation would mean more income would be taxed.
The president would also further limit income tax deductions for the wealthiest taxpayers and make high-income seniors pay more for Medicare.
Cigarette smokers would pay 94 cents more per pack in federal taxes to help fund Obama's early childhood initiatives.
Oil, gas industry
For the fifth straight year, Obama proposed eliminating tax deductions used by oil and gas companies — many of which have been in place for decades and are similar to tax breaks used by other industries. Obama's proposal would increase taxes on the companies by about $39 billion over ten years.
Chairman Virginia Lazenby, chairman of the Independent Petroleum Association of America, said, “If the president's budget proposal was enacted, independent oil and natural gas producers, who drill 95 percent of the nation's wells, would reduce their capital investments by up to 25 percent. This means fewer jobs, less revenue to government treasuries, and a halt to the progress our nation has made toward achieving energy security.”
The president would slash more than $40 billion over ten years to farmers by eliminating the direct payments received by certain crop producers and reducing federal subsidies for crop insurance.