|
| FILE - This Nov. 16, 2012 file photo shows Senate Majority Leader Harry Reid of Nev., left, with House Speaker John Boehner of Ohio looking on, speaking to reporters outside the White House in Washington following a meeting with President Barack Obama to discuss the economy and the deficit. President Barack Obama’s re-election has stiffened Democrats’ spine against cutting popular benefit programs like Medicare and Social Security. Their new resolve could become as big a hurdle to reaching a deal for skirting economy-crippling tax increases and spending cuts in January as Republicans’ resistance raising tax rates on the wealthy. |
WASHINGTON (AP) -- President Barack Obama's re-election has stiffened Democrats' spine against cutting popular benefit programs such as Medicare and Social Security. Their new resolve could become as big a hurdle to a deal that would skirt crippling tax increases and spending cuts in January as Republicans' resistance to raising tax rates on the wealthy.
Just
last year, Obama and top Democrats were willing during budget
negotiations with Republicans to take politically risky steps such as
reducing the annual inflation adjustment to Social Security and raising
the eligibility age for Medicare.
Now, with
new leverage from Obama's big election victory and a playing field for
negotiations that is more favorable in other ways, too, Senate Majority
Leader Harry Reid and other Democrats are taking a harder line.
"I've
made it very clear. I've told anyone that will listen, including
everyone in the White House, including the president, that I am not
going to be part of having Social Security as part of these talks
relating to this deficit," Reid, D-Nev., told reporters.
Reid's
edict would appear to take a key proposal off the table as an
ingredient for a deal on avoiding the "fiscal cliff," the year-end
combination of expiring President George W. Bush-era tax cuts and harsh
across-the-board spending cuts.
At issue is
the inflation adjustment used by the government to calculate
cost-of-living adjustments for Social Security and other federal
programs. A less generous inflation measure that takes into account
consumers finding alternatives when prices go up could reduce deficits
by more than $200 billion over the next decade.
It's
a no-brainer for many budget wonks because it means gradual, less
noticeable curbs to the growth of benefits. It also means about $70
billion more tax revenues over 10 years because automatic rises in tax
brackets to account for inflation would be smaller.
That
new inflation index, known as chained Consumer Price Index, is a magic
elixir for budget writers. But it's anathema to many liberals, who say
that moving to the new cost-of-living measure could cut average retiree
benefits by about $600 a year a decade after taking effect and mean a
cut of about $1,000 a year after 20 years.
"Think
about it this way. You're standing on the deck of a boat and you're in
very deep water and they want you to swim, but they're going to put a
log chain around your ankle," Sen. Tom Harkin, D-Iowa, told a group of
liberal activists assembled for a rally Thursday in a Senate hearing
room. "That's chained CPI."
Sixteen months
ago, Obama's White House took a different view during talks with House
Speaker John Boehner, R-Ohio, on a possible budget deal. A White House
draft offer by top Obama aide Rob Nabors, made public by Washington Post
author Bob Woodward, proposed several controversial changes to benefit
programs, including the lower inflation adjustment, raising the
eligibility age for Medicare and higher Medicare premiums.
Those
negotiations, however, were conducted on a playing field that favored
Republicans. It was less than a year after Obama's self-described
"shellacking" in the 2010 elections and the president was desperate to
win an increase in the government's borrowing cap and avoid a government
default on its debt that should shatter financial markets. Also, Obama
still faced re-election in 2012.
Now conditions favor Obama.
He
decisively won re-election and Republicans seem fearful of being tagged
with the blame if an impasse results in the government going over the
fiscal cliff. Obama and Democrats already are portraying Republicans as
hostage-takers willing let tax rates rise on everyone if the lower
Bush-era tax rates are not also extended for the top 2 percent to 3
percent of earners - those with incomes above $200,000 for individuals
and $250,000 for joint filers.
The new balance
of power means that Democrats who once would have acquiesced
reluctantly to GOP demands for stiff benefit cuts are now balking at
ideas such as chained CPI or an increase in the Medicare retirement age,
as well as demanding GOP concessions to higher taxes.
"The
price for that kind of thing has gone up," said a senior House Democrat
who required anonymity to speak frankly on party strategy.
"Negotiations depend on the situation. No one should expect to get the
same kind of deal."
Republicans have gotten
the message, but insist that higher tax revenues be paired with cuts to
rapidly growing programs such as Medicare and the Medicaid health care
program for the poor and disabled. These programs are called
"entitlements" because eligibility is based on meeting criteria such as
age or income.
"Washington's problem isn't
that it taxes too little, but that it spends too much," said Senate
Minority Leader Mitch McConnell, R-Ky. "But in a good-faith effort to
make progress on boosting the economy and government's long-term
solvency, Republicans like me have said for more than a year now that
we're open to new revenue in exchange for meaningful reforms to the
entitlement programs that are the primary drivers of our debt."
New
Hampshire Sen. Kelly Ayotte said in the GOP's weekly radio address
Saturday that "any effort to address our fiscal crisis without including
entitlement reform can't be taken seriously."
No way, say many liberals.
"We're
going to send a loud message to the leadership in the House, in the
Senate, and President Obama: `Do not cut Social Security, do not cut
Medicare, do not cut Medicaid,'" said Vermont Sen. Bernie Sanders, a
self-declared socialist who aligns with Democrats. "Every now and then
elections have consequences. We won."
Republicans
and even some Obama allies worry that liberal demands will make it
harder for the president to seal a bargain with the GOP.
Rep.
Mike Quigley, D-Ill., said Obama has the same problem with his party's
liberal base that Boehner has with some conservative Republicans.
"Boehner has a disproportionate group of his folks skewing things too
far out," Quigley said, "and the president has equally the same sort of
problems with people who are horribly unreasonable."
