Aamer Madhani

USA TODAY

Chain CPI would have lowered cost-of-living increases for Social Security.

WASHINGTON — The White House said Thursday that President Obama's soon-to-be-unveiled budget will not include his past offer to accept lowered cost-of-living increases in Social Security and other benefits.

The cost-cutting method had been a critical component of his long-term debt-reduction strategy but faced fierce opposition from liberal Democrats. In return for changing how the cost-of-living adjustment is calculated, Obama had expected Republicans to agree to some increases in tax revenue, which Republicans balked at.

Though Obama will drop what is known as "chained CPI (Consumer Price Index)," what amounts to a reduced calculation of inflation to benefits, in his 2015 budget, it remains on the table if grand bargain talks with Congress ever continue, White House spokesman Josh Earnest said Thursday.

Obama's budget will contain $56 billion in increased spending — $28 billion for domestic, $28 billion for defense — according to a White House official who spoke on condition of anonymity to discuss details before the budget announcement. The spending will be paid for by closing tax loopholes.

Among the new domestic initiatives Obama will propose, the official said, are the creation of 45 manufacturing institutes across the country; a "Race to the Top" initiative for energy efficiency to support states that implement policies to cut energy waste and modernize the grid; a jobs training program that will expand apprenticeships and help connect students with employers; and funding toward establishing Obama's goal for universal pre-kindergarten.

Earnest said Obama's budget is to be unveiled early next month. He said Obama would consider putting chained CPI back on the table if Republicans include tax revenue as part of a debt-cutting compromise.

"The president is not going to be in a position where he is going to ask senior citizens and middle-class families to make sacrifices in pursuit of reducing the deficit and not ask the wealthy, well-connected to make sacrifices, too," Earnest said.

The office of House Speaker John Boehner, R-Ohio, criticized Obama's decision.

"This reaffirms what has become all too apparent: The president has no interest in doing anything, even modest, to address our looming debt crisis," said Brendan Buck, a Boehner spokesman. "The one and only idea the president has to offer is even more job-destroying tax hikes, and that non-starter won't do anything to save the entitlement programs that are critical to so many Americans. With three years left in office, it seems the president is already throwing in the towel."

In his 2014 budget proposal, Obama had floated $230 billion in savings by restructuring cost-of-living adjustments for beneficiaries of Social Security.

Opponents of changing the cost-of-living adjustment suggested that approach would disproportionately impact the poorest of Americans.

Senate Majority Leader Harry Reid, D-Nev., cheered the announcement and predicted that Obama's budget "will be a powerful statement of Democratic principles."

'I commend President Obama for his commitment to keeping Social Security strong and for rejecting Republican calls to cut badly needed cost-of-living increases," Reid said.

"Democrats applaud the president for eliminating chained CPI from his budget, and we look forward to working across the aisle to adopt a responsible fiscal framework," House Minority Leader Nancy Pelosi said in a statement.

Charles Chamberlain, the executive director for Democracy for America, said he was concerned that chained CPI hasn't been taken off the table entirely.

"While it's great that President Obama has figured out, a year later, that it's a bad idea to push for cuts to Social Security benefits, progressives won't be dancing in the streets until we're confident that there aren't other earned benefit cuts buried in the details of the final budget," Chamberlain said.