Huffpost Politics

Barack Obama Willing To Sacrifice Military Health Care, Flood Assistance In 2011 Talks: Memo

Posted: Updated:
President Barack Obama proposed cutting back extensively on entitlement programs and in other controversial areas like military health care and flood assistance during his summer 2011 talks with House Speaker John Boehner (R-Ohio). (AP Photo/Jacquelyn Martin) | AP

A leaked memo from President Barack Obama's staff to House Speaker John Boehner (R-Ohio) details just how far the White House was willing to go to both curtail spending and compromise on tax reforms and entitlement programs during the 2011 debt ceiling negotiations.

The three-page document, available here, contained the details of the president's final offer to Boehner during his attempt to broker a grand bargain on deficit reduction with the GOP leadership, which was holding the country's debt ceiling -- and fiscal standing -- hostage. Boehner would reject the offer and pull out of talks three days later on July 22, 2011.

Among the programs Obama's staff proposed for $200 billion in spending cuts over the next decade were the military's health care program ($16 billion), Fannie Mae and Freddie Mac ($30 billion), the government's pension benefit program that stabilizes pension insurance premiums ($9 billion), the Transportation Security Administration ($18 billion) and flood assistance ($4 billion).

It further confirms previous HuffPost coverage that characterized the wealth of cuts that the president was willing to entertain that would disproportionately impact the nation's vulnerable -- the poor, the elderly, young mothers, students and veterans. Lawmakers reconvene in Washington D.C. this week to begin negotiations over how to avoid the so-called fiscal cliff, the series of tax hikes and automatic spending cuts slated to go into effect on Jan. 1.

Medicare, which enables millions of retired Americans to pay for their health care costs, would have been hit particularly hard. As previously reported, Obama had proposed cutting at least $250 billion from Medicare over the next ten years, in part from "alteration in the eligibility age" and "adjustments to premiums collected for services and benefits." In other words, reducing the number of people eligible and making those who are on it pay more for it.

On taxes, the memo requests an additional $1.2 trillion in tax revenue, but also allows that Obama would be open to lowering the marginal tax rates for both corporations and individuals.

Sweeping reforms should aim to cut "the number of individual and corporate tax rates...reducing each rate to the lowest possible level consistent with the revenue target described above and with efforts to broaden the individual and corporate income tax bases respectively," the memo states.

Washington Post reporter Bob Woodward acquired the confidential memorandum when working on his book, The Price of Politics, covering last summer's fraught deficit reduction talks.

"What it shows is a willingness to cut all kinds of things, like TRICARE, which is the sacred health insurance program for the military, for military retirees; to cut Social Security; to cut Medicare," Woodward said on NBC's Meet the Press Sunday. "And there are some lines in there about, 'We want to get tax rates down, not only for individuals but for businesses.' So Obama and the White House were willing to go quite far."

Around the Web

What is the Fiscal Cliff?

It's not a fiscal cliff—it's an austerity crisis.

What Obama's win means for fiscal cliff - Nov. 7, 2012

The Fiscal Cliff Explained - Forbes

The Looming Fiscal Cliff of 2013

Fiscal Cliff Negotiations: A Process Sure to Enrage All Americans ...

Obama approaches 'fiscal cliff' days after victory - Yahoo! News

Fiscal Cliff Definition | Investopedia

Economic Effects of Reducing the Fiscal Restraint That Is Scheduled ...

"Fiscal cliff" standoff keeps Wall Street subdued

Stocks end flat amid fiscal cliff concerns

How To Use Options To Buy Fiscal Cliff Insurance Protection

CANADA STOCKS-TSX steady in low volume as investors eye fiscal cliff

Fiscal cliff could help US avoid road to Japan – but probably won't

'Fiscal cliff' fight shines light on GOP civil war

In fiscal cliff scramble, defense budget part of the mix as Washington pursues ...

CSCO FYQ1: Beware Enterprise Slowing, Fiscal Cliff, Says Street

Fear of 'Fiscal Cliff' Taxes Puts Chill on Dividend Stocks

Filed by Sarah Bufkin