The so-called chained-CPI formula was part of a bid by the president to engage in deficit-reduction negotiations with Republicans. It wasn't adopted after a standoff over taxes and spending. It also was criticized by many congressional Democrats and some of Obama's political allies.
Josh Earnest, a White House spokesman, said the proposal remains on the table if talks on deficit reduction resume.
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Imposing a revised formula on Social Security and other programs with cost-of-living adjustments, which was proposed in the budget Obama sent to Congress last year, would save $162.5 billion over 10 years, the nonpartisan Congressional Budget Office said in November.
The Associated Press first reported the decision.
"He's willing to do some things that he doesn't personally support in his ideal budget," said Gene Sperling, director of the National Economic Council, a White House unit that coordinates administration policy.
It was also an attempt to revise costly entitlement programs and show Republicans of a good faith effort to reach a "grand bargain" budget deal, which failed. "We did not see reciprocity" from Republicans, Sperling said in a Politico interview earlier today.
White House spokesman Jay Carney said Feb. 18 the budget coming early next month would achieve "additional deficit reduction that addresses our medium- and long-term challenges through a balanced approach."
He said Obama sought Social security savings to show "a willingness to compromise" on the budget but it's was a position "we haven't seen demonstrated thus far by Republicans."
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