Updated 2:19 p.m. | President Barack Obama’s decision to drop a proposal to trim cost-of-living increases for Social Security and many other federal benefits from his budget cheered liberals on and off Capitol Hill — although the White House clarified the offer remains “on the table.”  

Separately the White House announced that it would live with the spending caps agreed to in the budget deal between Senate Budget Chairwoman Patty Murray, D-Wash., and House Budget Chairman Paul D. Ryan, D-Wis. But the budget will also have a separate $56 billion “Opportunity, Growth, and Security Initiative,” which would effectively replace the remaining sequester for fiscal 2015 with supplemental spending split evenly between defense and non-defense programs. The White House says that package would be fully offset with “spending and tax reforms.”  

The decision to drop so-called “chained CPI” came after Sen. Bernard Sanders, I-Vt., and 15 other senators wrote Obama a letter Feb. 14 urging Social Security to be spared in the president’s budget blueprint.  

“With the middle class struggling and more people living in poverty than ever before, we cannot afford to make life even more difficult for seniors and some of the most vulnerable people in America,” said Sanders, who has railed repeatedly on the Senate floor against cutting benefits due under the law. Obama had included the proposal, which would shrink the inflation rate used to calculate a host of benefits and tax breaks, as part of an attempted grand bargain on the budget, but Republicans refused White House demands for new revenue to go along with cuts in entitlements.  

However, while the proposal will not be in his budget blueprint, Deputy Press Secretary Josh Earnest said Thursday that the president’s proposal remains “on the table,” but only as part of a larger package that would shrink tax breaks for the wealthy and corporations.  

“It’s a principle of fairness,” Earnest said.  

“The offer to Speaker Boehner remains on the table for whenever the Republicans decide they want to engage in a serious discussion about a balanced plan to deal with our long-term fiscal challenges that includes closing loopholes for the wealthiest Americans and corporations,” a White House official said in a separate background memo.  

The official noted that last year the president included his compromise proposal as an offer to Republicans.  

“This year the Administration is returning to a more traditional Budget presentation that is focused on achieving the President’s vision for the best path to create growth and opportunity for all Americans, and the investments needed to meet that vision,” the official said.  

Other highlights released by the White House include:

• a major expansion of the Earned Income Tax Credit for childless workers paid for by closing tax loopholes
• a reduction in the deficit to less than 2 percent of GDP by the end of the 10-year budget window. Debt as a share of the economy will be below Obama’s previous budgets
• 45 new manufacturing institutes
• a “race to the top” for energy efficiency
• a skills training plan
• universal pre-K and improved Head Start options