Both parties wary of Obama's proposal to cut Social Security

WASHINGTON Thu Apr 11, 2013 8:43pm EDT

U.S. President Barack Obama talks about the Fiscal Year 2014 Budget while standing next to acting Director of Office of Management and Budget Jeffrey Zients in the Rose Garden at the White House in Washington, April 10, 2013. REUTERS/Larry Downing

U.S. President Barack Obama talks about the Fiscal Year 2014 Budget while standing next to acting Director of Office of Management and Budget Jeffrey Zients in the Rose Garden at the White House in Washington, April 10, 2013.

Credit: Reuters/Larry Downing

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WASHINGTON (Reuters) - Republicans, Democrats and even the White House distanced themselves Thursday from President Barack Obama's proposal to trim Social Security and other safety-net benefits, illustrating yet again the difficulty of reaching a bargain to reduce spending and tame the deficit.

Republicans, including House of Representatives Speaker John Boehner of Ohio, said Obama's offering - made Wednesday in his budget plan for the 2014 fiscal year - did not go far enough to cut spending.

Many Democrats thought it went too far, with House Minority Leader Nancy Pelosi of California saying that it should be debated, but not be part of any deficit reduction deal or budget proposal.

And White House spokesman Jay Carney said it was not originally Obama's idea, but was included in the budget because the president thought Republicans wanted it as part of any deficit reduction deal.

"This is a Republican proposal," he said in his daily briefing.

The Obama proposal that got the most attention would change how Social Security pension benefits are periodically adjusted for inflation, resulting in a reduction of regular cost-of-living increases for beneficiaries.

The idea - involving a measure of inflation known as the chained Consumer Price Index, or chained CPI - was backed in December by House of Representative Republican leaders and put on the table at that time by Obama during negotiations over the so-called "fiscal cliff" of automatic budget cuts and steep tax increases.

A retiree who starts at age 65 with $20,000 in annual Social Security benefits would be receiving $289 a month less after 25 years under the chained-CPI approach.

Obama also proposed increasing means-testing for some beneficiaries of the government sponsored health insurance program for seniors, Medicare.

The fact that these were Republican proposals did not stop the head of the National Republican Congressional Campaign Committee, Representative Greg Walden of Oregon, from calling Obama's budget "a shocking attack on seniors" in a CNN interview Wednesday.

Montana Democratic Senator Max Baucus, chairman of the Senate Finance Committee, struck a similar though less dramatic theme in a statement Thursday, saying he was "disappointed."


Pelosi told reporters she thought Democrats ought to hear both sides, arranging a debate conducted by outside experts for Democrat members.

Pelosi joined the rest of her membership at the weekly House Democratic Caucus meeting where lawmakers heard from Damon Silvers of the AFL-CIO labor federation, representing opposition to Obama's proposal, and Robert Greenstein, executive director of the liberal Center for Budget and Policy Priorities, which favors including entitlement reform in budgets.

Representative Keith Ellison of Minnesota told Reuters after the meeting that while there were a few Democrats in favor of maintaining an open mind to Obama's proposal, the caucus as a whole "overwhelmingly" delivered the message that the so-called chained-CPI was a non-starter.

"There was a lot of concern," Ellison said.

On the Republican side, Boehner, while saying he was "encouraged that the president acknowledged that our safety net programs are unsustainable," said Obama's offer was "nothing close to what we need in order to preserve these programs and to put ourselves on a path to balance the budget."

Boehner, at a news conference, distanced himself from Walden's comment on CNN but Walden's remarks served as notice that supporters of changes to Social Security could find it being used as political ammunition against them.

"The Walden statement has had a huge impact," Greenstein said. "There is a very large, very palpable fear" among House Democrats that if they support the chained CPI, that Republican challengers running against them in 2014 will do attack ads against them and campaign against the Democrat voting to cut senior Social Security benefits.

The fear is rooted in Democrats' memories of how the cuts to Medicare spending in Obama's signature health legislation were used against Democrats in 2010, he said.

"Prior to the Walden statements there were some making the arguments that Democrats would be played for suckers in 2014," Greenstein said. "I think the Walden statement just confirmed this. I saw firsthand today the viral effect it's had," Greenstein said Thursday.

The national debate over how to tame budget deficits inevitably circles back to controlling costs among so-called entitlement programs, which include the Social Security retirement program and Medicare.

However, making changes to those program, which affect the elderly and low-income Americans, is extremely delicate as it gives either side a chance to accuse its opponents of being heartless.

(Editing by Fred Barbash and Lisa Shumaker)

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Comments (7)
nose2066 wrote:
The recommendations of Alan Greenspan supposedly fixed the Social Security System in 1983 by raising the Social Security Taxes and reducing benefits. To reduce the benefits now, there has to be an explanation of why that previous fix is not working.

One suggested explanation is income inequality. The distribution of income has become skewed since 1983, with large amounts of income going to a small proportion of high income earners and the extra income is not subject to Social Security tax because of upper limits to those Social Security Taxes. Do you politicans really want to wade into the subject of income inequality???

Apr 11, 2013 10:02pm EDT  --  Report as abuse
Lemming wrote:
What Social Security? The Three Branches of Oligarchy already gave it away (FOREIGN AID)(WARS on CREDIT) etc! You know it’s sad but true… Many institutions a.k.a power elite etc. have conspired to destroy America and all she was… Those in charge are now charged with creating the perfect “CRISIS” to finish their diabolical plan! Rise up brothers and sisters of America and be heard… Do not allow our government to continue on this way! Our Founding Fathers would be disgusted with our sissified ways! Time to Cowboy Up, Man up or whatever else you fancy!

Apr 11, 2013 10:18pm EDT  --  Report as abuse
Lemming wrote:
Our government leaders no longer adhere to a concept of obeying the spirit of the law, let alone the letter of the law. Most of them have no concept of right and wrong. No concept of what is and is not appropriate. And perhaps no conscience.

These politicians have no respect for the people who elected them. No respect for the American people. No respect for their office. No respect for the Constitution of the United States. No respect for what it means to be entrusted by the people of this nation to serve at the highest capacity. Their only goal is to consolidate more money and power into the hands of the few in order to control and manipulate the many. (author unknown) Just a thought…

Apr 11, 2013 10:46pm EDT  --  Report as abuse
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