Obama: Medicare, Social Security Demand Compromise

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WASHINGTON— President Barack Obama said Tuesday the nation's major entitlement programs — Medicare, Medicaid and Social Security — must be adjusted by Democrats and Republicans acting together rather than by dictates from the White House.

Obama defended his decision to avoid any entitlement overhauls in the 2012 budget he submitted a day earlier, saying the two parties must work together to find compromise.

"There's going to be a lot of ups and downs in the coming months as we get to that solution," the president said in a news conference. "I'm confident that we can get this done."

The president described his $3.73 trillion budget as one of tough choices. It aims to reduce the deficit by $1.1 trillion over 10 years with a mix of spending freezes on domestic programs, pay hike suspensions for federal civilian workers and new revenues from increased taxes on the wealthy and on oil and gas producers. [See photos of the Obamas behind the scenes.]

But Obama's deficit relief is far more modest than that detailed by his fiscal commission, which in December proposed measures that would mop up four times as much red ink. Unlike his blue-ribbon group, the administration's budget does not address structural changes in Social Security or Medicare, the two largest items in the federal budget.

"Look at the history of how these deals get done," Obama said Tuesday. "Typically it's not because there's an Obama plan out there. It's because Democrats and Republicans are committed to tackling this in a serious way." [Read more about the deficit and national debt.]

The commission's bipartisan report included politically difficult recommendation such as increasing the Social Security retirement age and reducing future increases in benefits. And while Obama has promised to overhaul the corporate tax system, he stops short of commission recommendations that would lower rates but generate additional revenue at the same. Obama has called for "revenue neutral" fixes to corporate taxes, meaning they would neither cost more money nor add money to the treasury.

"I'm not suggesting we don't have to do more," the president said.

Obama conceded that entitlement and tax changes are necessary and said Democrats and Republicans set a model for cooperation during the December lame duck congressional session when they negotiated a tax-cutting plan.

"My suspicion is that we're going to be able to do the same thing if we have the same attitude about entitlements," he said.

Following his party's sweeping defeats in the November elections, Obama pledged to refocus his agenda on the economy and creating jobs. He used last month's State of the Union address to lay out an agenda that he said would spur job growth in the short-term and increase U.S. competitiveness in the future.

Obama's budget aims to cut the deficit in part with tax increases, including eliminating tax breaks for oil and gas producers, that have failed to win support before under a Democratic control Congress. The measures face an even tougher challenge now that Republicans control the House of Representatives. [See more stories about the budget, the deficit, and the national debt.]

"I continue to believe I'm right," he said, when asked why he relied on previously defeated proposals. "so we're going to try again."

Following his party's sweeping defeats in the November elections, Obama pledged to refocus on the economy and creating jobs. He used last month's State of the Union address to lay out an agenda that he said would spur job growth in the short term and increase U.S. competitiveness in the future. [See a slide show of the 10 Best Cities for Public Transportation.]

Obama's budget aims to cut the deficit partly with tax increases, including eliminating tax breaks for oil and gas producers, that have failed to win support before under a Democratic-controlled Congress. The measures face an even tougher challenge now that Republicans control the House of Representatives.