Lindsey Graham Sees Obama Budget Offer As Positive

By Mark Felsenthal

WASHINGTON, April 7 (Reuters) - South Carolina Senator Lindsey Graham on Sunday became the first prominent Republican to publicly praise, however lukewarmly, the budget proposal the White House outlined last week.

Graham said that while he believes President Barack Obama's plan is overall bad for the economy, "there are nuggets of his budget that I think are optimistic," and that could set the stage for a broad bargain to put the nation's finances on a stronger footing. He was speaking on NBC's "Meet the Press" program.

Graham, a conservative who has deviated from party positions in the past, and has said he would consider raising up to $600 billion in new tax revenue if Democrats accept significant changes to Medicare, the government health program for elderly Americans, and Medicaid, the health safety net for low-income people.

The White House on Friday said the president would propose a budget that would offer cuts to so-called entitlement programs such as Social Security, a retirement program, and Medicare in exchange for increased tax revenues and a commitment to spend money on education and infrastructure repair.

Obama's proposal, which will formally be made public on Wednesday, is a symbolic document, and both the Senate and House of Representatives have already passed their own budget resolutions.

The president's aides have said he hopes to use the offer to appeal to enough middle-of-the-road lawmakers of both parties to pass a broad deal to reduce the budget deficit.

Obama also hopes to reverse the deep spending cuts that automatically kicked in March 1 as a result of the failure of the White House and Congress to reach an agreement on replacing them.

Graham's reception of the president's budget proposal is warmer than his fellow Republicans and some of the president's own allies have accorded it so far.

House Speaker John Boehner said last week the president was ignoring Republicans' staunch opposition to any tax hikes. And independent Senator Bernie Sanders, who votes with the Democrats, said he would oppose any efforts to lower payments to Social Security beneficiaries.

In an illustration of the difficulty the president will have retaining support among his fellow party members, a House Democrat said the president's plan risks splintering the party's loyalties.

"We need to be solid. We need to indicate to the administration this is a non-starter in the House," Representative Raul Grijalva of Arizona said on MSNBC.

Graham said that the president's offer contained approaches to cutting spending that he supports. One is the proposal to index cost-of-living increases for government program benefits to a less-generous measure of inflation.

"The president is showing a little bit of leg here, this is somewhat encouraging," Graham said. "His overall budget's not going to make it, but he has sort of made a step forward in the entitlement-reform process that would allow a guy like me to begin to talk about flattening the tax code and generating more revenue."

Obama has invited 12 Republican senators for dinner on the day of the budget release as part of an effort to soften resistance among the opposition political party.

"The president's focus, in addition to the regular order process that members of Congress say they want, is to try to find a caucus of common sense, folks who are willing to compromise, that don't think compromise is a dirty word, and try to get something done," White House senior advisor Dan Pfeiffer said on ABC News' "This Week with George Stephanopoulos" program. (Reporting by Aruna Viswanatha and Philip Barbara; writing by Mark Felsenthal)