Obama faces budget dilemma
February 15, 2014, 12:00 pm
By Erik Wasson
President Obama is facing a
deepening dilemma about whether to abandon cuts to Social Security in his next
fiscal blueprint, which is due out in March.
Obama touched the third rail of
American politics last year when he proposed a new formula for Social Security and other entitlements
that would result in benefits being cut over time.
Now congressional Democrats and
unions are ramping up their pressure on Obama to drop the proposal, which many
fear could become an albatross for the party in the midterm elections.
“We want the president to make
very clear that he is going to stand with seniors, that he is going to stand
with disabled vets,” Sen. Bernie
Sanders (I-Vt.) told The Hill. “Good politics follows from good policy. When
you have a middle class that is struggling it is bad public policy to cut
programs that people desperately need. That is just wrong.”
But abandoning the plan would be a
major reversal for Obama that could erode his credibility and expose him to
conservative attacks.
"If the president backtracks
on this modest, sensible, bipartisan reform, it will eliminate any remaining
shred of hope that he will deal seriously with America's deficit and debt,” a
GOP leadership aide said Friday.
In last April’s budget, Obama
infuriated many Democrats by proposing to change the way the government
calculates inflation.
The shift to the chained consumer
price index (CPI) would reduce Social Security and federal worker retirement
benefits over time and increase some taxes by changing how tax brackets are
calculated.
Obama also proposed increasing
means testing for outpatient and drug benefits under Medicare, a move that
would increase some premiums.
The president had proposed the
changes in his last “grand bargain” offer to Speaker John Boehner (R-Ohio)
during fiscal talks in late 2012. White House officials argued the inclusion of
the cuts in the budget showed the president was willing to make tough choices,
if only Republicans would accept a “balanced approach” to deficit reduction
with higher taxes.
White House spokesman Jay Carney declined to say Friday if
the entitlement cuts would be included in this year’s blueprint.
"What I can tell you is the
president has demonstrated in the past and continues — and will continue to
demonstrate his commitment to achieving additional deficit reduction that
addresses our medium- and long-term challenges through a balanced approach,"
he said.
Senate Democrats, facing a
possible loss of their majority this fall, on Friday urged Obama to backtrack.
Sanders and 15 other senators — including Sen. Mark Begich (D-Alaska.), who is
facing a tough reelection battle — sent a letter to the president pleading with
him to reverse course.
“Mr. President: These are tough
times for our country. With the middle class struggling and more people living
in poverty than ever before, we urge you not to propose cuts in your budget to
Social Security, Medicare and Medicaid benefits — cuts which would make life
even more difficult for some of the most vulnerable people in America,” the
senators wrote.
Sanders said Obama was foolish to
try to woo Republicans into a grand bargain on the deficit in the first place.
“I think the president made a
mistake from day one. It certainly did not work,” Sanders said.
In the House, Rep. Allyson
Schwartz (D-Pa.) is preparing a letter to Obama on chained CPI letter that has
about 102 signatures so far, sources said. She plans to send the letter to
Obama soon.
Democrats on Capitol Hill have
strong backing from labor unions and lobby groups for seniors.
“AARP staff have met with the
White House with regard to their [fiscal year] 2015 budget proposal and have
continued expressing the same concerns we’ve long had about chained CPI,” AARP
spokesman Joshua Rosenblum said.
AFL-CIO President Richard Trumka
has made clear to the White House that the labor federation will work against
anyone who supports the cuts to Social Security and Medicare that were in last
year’s budget.
“We have very smart voters and
they know whether politicians are working for them or not, and this at the top
of the list,” said AFL-CIO spokesman Josh Goldstein.
National Treasury Employees Union
(NTEU) President Colleen Kelley has been working against the changes as well.
“We do not know if chained CPI is
in the proposed budget but NTEU has urged the administration not to include any
cuts to federal retirement in its ’15 budget,” she said.
Activists said the budget proposal
last year deeply alienated the Democratic base, and warn standing by it could
destroy the party’s hopes of holding the Senate in 2014.
“Older voters vote in higher
numbers in midterm elections. If voters believe the president wants to cut
their Social Security benefits, campaigns and super-PACS may look to tie
Chained CPI like a lead balloon to any candidate they can,” one activist said,
noting that neither the House nor Senate budget last year included the CPI
change.
“There’s a reason the only budget
that proposed chained CPI in 2013 was from someone who never has to run for
reelection again,” he said, referring to Obama.
Another activist said Obama “is
going to feel the full wrath of anybody up for reelection” if he includes the
cuts in his budget.
Deficit hawks say walking back the
entitlement cuts would damage Obama’s credibility on fiscal issues, perhaps
fatally.
“It just looks like caving to
special interest groups. This is something he can cite as a hard choice and as
standing up to his own base,” said Bob Bixby, the head of the Concord
Coalition.
He said the Sanders letter is “all
the more reason to keep it in” because Obama’s needs to distance himself from a
“tax the rich” solution to the debt in order to foster centrist support for
Democrats.
Bixby argued that because Obama
already included the cuts in one budget, he cannot take them out without it
looking purely political.
“He’s crossed the Rubicon. He
can’t just take it out,” he said.
Another Democratic deficit hawk
and former congressional aide said that removing the $250 billion in savings
generated from chained CPI will make the new budget look worse in deficit terms
than the 2013 budget.
“Even though it seems unlikely you
will have a big deficit deal this year, the president has shown that he is at
least willing to make a step in that direction.
“To that extent that the talks
have failed, the question was who is being more reasonable? Reiterating his
final offer to Speaker Boehner will allow the president to retain some degree
of credibility,” the former aide said.
But Democrats say Obama could
propose other ways to reduce the deficit that don’t cut entitlements.
"This is unacceptable. There
are commonsense ways we can reduce the deficit that do not demand sacrifice
from the most vulnerable Americans," Sen. Sherrod Brown (D-Ohio) said.
Social Security
James Roosevelt
Jr. was an associate commissioner for the Social Security Administration,
is a governor for the Roosevelt
Institute, and a director at the America's
Health Insurance Plans.
Note: Foundation
to Promote Open Society was a funder for the Roosevelt Institute, the Brookings Institution (think tank),
and the Center for American Progress.
George Soros
was the chairman for the Foundation to Promote Open Society, and a
supporter for the Center for American
Progress.
Vernon E. Jordan Jr. is an honorary
trustee at the Brookings Institution (think tank), Valerie B. Jarrett’s great uncle, a senior counsel for Akin, Gump, Strauss, Hauer & Feld, LLP,
a director at the American Friends of Bilderberg (think tank), and a
2008 Bilderberg conference participant (think tank).
Strobe
Talbott is the president of the Brookings
Institution (think tank), and was an editor for Time magazine.
James
Carney was the Washington Bureau chief for Time magazine, and is the press secretary for the Barack Obama administration.
Cyrus F.
Freidheim Jr. is an honorary trustee at the Brookings Institution (think tank), and a member of the Commercial Club of Chicago.
Commercial Club of Chicago,
Members Directory A-Z (Past Research)
Tuesday, December 17, 2013
Valerie B. Jarrett
is a member of the Commercial Club of
Chicago, the senior adviser for the Barack
Obama administration, and her great uncle is Vernon E. Jordan Jr.
Akin,
Gump, Strauss, Hauer & Feld, LLP was the lobby firm for the America's Health Insurance Plans, and
the Center for American Progress.
Center
for American Progress was a funder for the America's Health Insurance Plans.
Ezekiel Emanuel
is a senior fellow at the Center for
American Progress, Rahm I. Emanuel’s brother, and was the health care policy adviser at the U.S. Office of Management and Budget
for the Barack Obama administration.
Rahm
I. Emanuel is Ezekiel Emanuel’s brother, a member of the Commercial Club of Chicago, the Chicago (IL) mayor, and was the White
House chief of staff for the Barack
Obama administration.
Melody
C. Barnes was a domestic policy council, director for the Barack Obama administration, the EVP
for the Center for American Progress,
and is Barack Obama’s golf partner.
Open
Society Foundations was a funder for the Center for American Progress, and the Atlantic Council of the United
States (think tank).
George
Soros was a supporter for the Center
for American Progress, and is the founder & chairman for the Open Society Foundations.
Togo
D. West Jr. is a director at the Atlantic
Council of the United States
(think tank), and was the secretary for the U.S. Department of Veterans Affairs.
Eric
K. Shinseki was a director at the Atlantic
Council of the United States
(think tank), and is the secretary at the U.S. Department of Veterans Affairs for the Barack Obama administration.
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