Obama Changes Tack on Budget, Returns to Congress With New Budget

WASHINGTON -- President Barack Obama and the U.S. Congress are shifting from short-term budget concerns to debates over the nation's long-term economic future, and everything -- from Medicare and Medicaid cuts to tax hikes for the wealthy -- is on the table.

Much will be revealed at midweek, when the House of Republicans and Senate are expected to vote on a budget for the remainder of this fiscal year and Obama unveils his plan to reduce the deficit, in part by scaling back Medicare and Medicaid, the government's chief health programs for seniors and the poor. The House, too, may vote on Budget Committee Chairman Paul Ryan's spending plan for next year as Democrats readied arguments that it proposed "draconian" cuts to Americans who need help the most.

Meanwhile, congressional officials were putting to paper a deal struck Friday night that would fund the government through September and cut $38.5 billion in spending. They were operating under a one-week extension of the budget, which passed the House and Senate in the last hour before the government was to begin shutting down.

The House's 348-70 vote to extend funding a few days provided no guarantees for the measure being written Monday that would fund the government through the next six months, but leadership aides said they expected it to pass as early as Wednesday.

Whatever its fate, official Washington raced ahead to frame the upcoming fight over raising the nation's debt limit and the election-year budget as a pair of interconnected battles that would make Friday's nail-biter seem minor.

To be sure, the Republicans had succeeded in turning what's usually a fight over spending into a series of battles over spending cuts -- a thematic victory for House Republicans swept to power by a populist mandate for smaller, more austere government.

"We've had to bring this president kicking and screaming to the table to cut spending," House Majority Leader Eric Cantor, a Republican from Virginia, said on "Fox News Sunday."

Presidential adviser David Plouffe said Obama has long been committed to finding ways for the nation to spend within its means. He confirmed that the president would unveil more specifics for deficit reduction with a speech Wednesday that would reveal plans to reduce the government's chief health programs for seniors and the poor.

"You're going to have to look at Medicare and Medicaid and see what kind of savings you can get," Plouffe said Sunday on NBC's "Meet the Press."

But he contrasted Obama's approach to the Republicans in familiar terms.

"We can't take a machete," Plouffe said on ABC's "This Week." "We have to take a scalpel, and we're going to have to cut, we're going to have to look carefully."