Republicans insist that changes in the major entitlement programs be on the table in exchange for their willingness to accept increases in tax revenue.
Democrats say they intend to resist any major changes in the popular entitlement programs without some significant Republican concessions on taxes and new revenue.
This would call for draconian changes in the big entitlements.
So, while Congress and the president can make policy changes to the entitlement programs that will in turn have an effect on the total spending for mandatory spending, like raising the social security retirement age or expanding prescription drug benefits, they cannot reduce or increase the budget by a specific dollar amount.
The same result has been found by Fahr and Frick (2007) who find clear evidence in favor of an incentive effect when examining the impact on monthly absence rates of changes in the unemployment benefit entitlement system in Germany for the years 1991 2004.
In this exercise we reduce these differences by 20%% in order to evaluate whether employment stability could change for reasons other than variations in the UIS and whether the gains in employment stability could be larger or smaller than the gains achieved with the previous change in the UI entitlement.
The simulation exercise performed in Table 5 shows the response of participation in Housing Benefit, Family Credit and child nutrition programmes to changes in the levels of entitlements of each programme and to demographics.
By replacing appropriations reductions scheduled for 2015 with what would presumably be permanent changes in entitlement programs and the tax code, the proposal would likely increase the long-term deficit reduction.
He compared making changes in entitlement programs to the bipartisan Social Security overhaul in the 1980s and the reshaping of welfare policy during the Clinton administration.
That down payment has already been made, many times over, and Democrats have vowed not to even consider entitlement changes in the absence of big tax increases on the rich.
"If the select committee were able to come up with a proposal that did bring in new revenue that was going to be good for the country," and if the proposal also included changes in entitlement programs, "I would support it, I would absolutely support it," said Senator Lisa Murkowski, Republican of Alaska.
