It's thought the key areas now vulnerable will be housing benefit for the under-25s and tightening benefits to families with more than two children. How likely are the cuts?
More cuts?The offered spending reductions came about when, the Telegraph claims, the Work and Pensions Secretary, Iain Duncan Smith, contacted the Home and Defence Secretaries following apparent concern about the impact of cuts on national security.
So far Osborne has confirmed there are no more planned cuts to welfare because of significant cuts already made, including capping benefit rises by 1%. However, he also says that so far he's only found 20% of the spending savings for the 2015/16 Spending Review - Osborne wants spending to be cut by £11.5bn in total - which will be publicised on 16 June.
Strategically, the Lib Dems would be strong opposed to any more benefit cuts. But some kind of deal - possibly - could be cut were the Tories willing to re-think their attitude to means-testing for better-off pensioners.
TensionEither way, it means more Conservative-Lib Dem tension. "They said their plan would balance the books by the next election," said Labour shadow Financial Secretary to the Treasury, Chris Leslie, "but their failure on growth and jobs means the deficit is now set to be over £90 billion in 2015."
"That's why the Chancellor is now asking for even more spending cuts, with most big departments yet to reach agreement."
Meanwhile seven government departments have agreed provisionally cuts of up to 10%, Osborne said this morning, the Guardian reports, including Justice, Energy, Communities, the Treasury and Northern Ireland.