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

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.

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

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