Obama’s Debt Ceiling Proposal Sparks Liberal Fury
Printer-friendly versionPDF version
a a
 
Type Size: Small
The Fiscal Times
July 7, 2011

Last December, furious liberal Democratic lawmakers complained they had been  betrayed by  President Obama for cutting a  budget deal with the GOP that extended the Bush era tax cuts for the wealthy in return for some additional spending. Now there is renewed fear and loathing  among moderates and liberals that the president, as part of a “big” $4 trillion deficit reduction plan, will do the same thing to them – but this time by agreeing  to deep cuts in Medicare and  once sacrosanct Social Security.

House Minority Leader Nancy Pelosi, D-Calif., said on Thursday that Democrats will not support any entitlement benefit cuts as part of a major deficit reduction package in the wake of media reports that Obama was pressing for reductions in Social Security benefits and Medicare.   Liberal fears that they might be sold out by the Democratic president echoed throughout the Capitol. “I think there’s a great deal of concern in general on how these negotiations might go,” Rep. David Price of North Carolina, a senior liberal Democrat and one of the more influential moderates in the Congress, told the Fiscal Times.

Obama has had an uneasy relationship with congressional liberals and moderates for much of his administration, especially after the Democrats’ disastrous showing in last fall’s mid-term elections and Obama’s decision to “triangulate” between the Republicans and Democrats to regain some of his lost influence. Liberals have also complained that the president has reneged on his campaign pledge to speed up the pullout of U.S. troops from Afghanistan and Iraq.

And last December, liberal Democrats cried that a spineless, politically expedient president had been brow beaten  and duped by Republicans into signing off on a major tax deal that would line the pockets of the wealthiest Americans and add nearly $1 trillion to the federal debt – although the final deal proved more beneficial to the Democrats  and their jobless constituents

Price told The Fiscal Times he wasn’t blaming Obama directly for the current budget crisis, but said that he and many of his colleagues believe the White House and Congress should focus primarily on “paying the country’s bills” and raising the $14.3 trillion debt ceiling now to avert the possibility of a default on U.S. debt, and wait until later this year to address the long-term deficit in a more deliberate manner. ”We’re not reconciled to doing all of this on the brink of disaster,” he said.

Asked whether he was worried that the president would go too far in negotiating deep cuts in Social Security and Medicare, veteran Rep. Rob Andrews, D-N.J., replied: “You always have a concern in negotiations about that,” but quickly added that he was giving Obama the benefit of the doubt.

Obama reported progress after meeting today with Republican and Democratic congressional leaders at the White House, and announced that negotiators would reconvene on Sunday in hopes of breaking a stalemate over raising the federal debt ceiling,  Obama reportedly is pressing lawmakers to consider a far reaching, $4 trillion debt-reduction plan  over ten years that includes reduction in benefits for Social Security and Medicare.

One proposal under consideration  would involve using a different measure of inflation, known as a “chained” consumer-price index, to compute future increases in Social Security. Many conservative groups believe that inflation estimates in the government’s budget , especially for Social Security, are overstated.  The government could save roughly $300 billion over 10 years by switching to the “chained” CPI, according to some projections.

But many Democrats oppose tampering with Social Security costs, other than to insure it’s long term stability, and say that Social Security should not be discussed in the context of a long term effort to reduce the deficit.  Rep. Barney Frank, D-Mass., told The Fiscal Times he would oppose any agreement that would adjust the cost-of-living formula. “That’s a deal breaker,” Frank said. “Absolutely, and for most Democrats.”

“A proposal to further restrict cost of living increases would make me vote against the whole thing,” added Frank, one of the most  prominent  liberals in Congress. “We just went through two years in a row when there was no increase in cost of living for Social Security but the elderly had to pay more for their Medicare.” 

Rep. Chris Van Hollen, D-Md., and Sen. Chuck Schumer, D-N.Y., echoing  Frank’s views, said they would oppose deep cuts in Social Security and Medicare. “The Democrats in Congress will not balance the budget on the backs of Social Security beneficiaries and will not support these cuts for Medicare beneficiaries,” Van Hollen said on MSNBC. “We do believe . . .that  there are ways to generate additional revenues to help improve the Medicare solvency issue without slashing benefits to Medicare beneficiaries.”

Democratic lawmakers said they first learned of the $4 trillion deficit reduction proposal through media reports. White House Press Secretary Jay Carney tried to distance the White House from a report in this morning’s Washington Post that Obama was considering cuts to Social Security as part of a “grand bargain.”

“The fact is the president’s position [on Social Security] has not changed at all since January,” he said, adding that “there is no news in the story that pretended to be news today.”

Rep. James Moran, D-Va., another veteran liberal House member, said he doesn’t necessarily oppose some of the cost saving measures reportedly on the table, including some sort of adjustment to the CPI. But he said there was considerable “unease” among Democrats, and blamed Obama for allowing the Republicans to hold the debt ceiling hostage to negotiations over major spending and entitlement changes. Frank said he wasn’t inclined to criticize Obama’s bargaining tactics until now, noting that president “has a tough situation to negotiate.”  He added, though, that the president should hold out for deep cuts in defense spending – as much as $200 billion a year – and force the Republicans to go along with major tax revenue increases.

Rep. Rosa DeLauro, D-Conn., said she wouldn’t rush to judgment on where Obama is headed in the  talks. “Let’s see what is on the table,” she said. However, she insisted that “We”ve been clear about Medicare, we have been clear on Social Security issues. Essentially, you know, making sure beneficiaries  are not hurt.”

Washington Editor and D.C. Bureau Chief Eric Pianin is a veteran journalist who has covered the federal government, congressional budget and tax issues, and national politics. He spent over 25 years at The Washington Post.