Obama’s bid to squeeze Social Security enrages his core backers

 

Obama’s proposal on benefits

President Barack Obama wants to use a different way of calculating inflation-based increases for benefits that go to Social Security recipients, along with some veterans and their survivors. The lower rate would have a compounding impact, so that the gap in benefits produced by using the current inflation rate vs. applying his proposed one would grow over time:

Current inflation rate used: 1.7 percent.

Average Social Security retirement benefit decrease: $36 per year in 2014, $360 per year in 2023.

Number of people affected: 57 million Social Security recipients, 8.6 million veterans.

Amount of money saved: $268 billion, minus $15 billion to protect the very poor, old and disabled.

Decrease in growth of Social Security trust funding gap from 2014 to 2023: 18 percent.

Sources: Obama budget plan, Congressional Budget Office, Social Security Administration, Bureau of Labor Statistics


McClatchy Washington Bureau

Liberal groups angered by President Barack Obama’s proposed Social Security cuts say they’ll take a page from conservatives’ campaign playbook and work to oust Democratic lawmakers who go along with the plan.

The revolt within Obama’s political base and a related divide in his party may complicate the president’s mission when Congress returns to Washington next week to settle the budget and meet a looming deadline, May 18, for raising the federal debt ceiling.

As part of his budget plan now before Congress, Obama wants to slow the inflation calculator for Social Security benefits and payments to some military veterans, their survivors and college students. He’s also asking affluent Americans to pay higher Medicare premiums.

The biggest impact would be on the country’s 57 million Social Security recipients, the beneficiaries of a New Deal program that Democratic icon Franklin D. Roosevelt launched during his Depression-era presidency.

The early reaction to his proposed revisions for Social Security and Medicare suggests that before Obama can sell the plan to Republicans as part of a new budget accord, he’ll face a more difficult task of selling it to his base.

Prominent liberal activists – among them groups, such as MoveOn.org and Democracy for America, that helped Obama gain re-election in November – view his willingness to reduce future Social Security payments as a betrayal of core Democratic commitments to help the needy and ease the burdens of old age.

The groups are vowing to run primary challengers against Democratic members of Congress who back the president’s controversial quest.

“Social Security is a key part of the Democratic legacy and a vital lifeline to millions of Americans,” Stephanie Taylor, a co-founder of the Progressive Change Campaign Committee, told McClatchy on Thursday. “Any Democrat who votes for such a plan should be ready for a primary challenge.”

The liberal activists’ strategy of targeting recalcitrant Democrats mirrors the tactics of anti-spending groups such as the Senate Conservatives Fund and the Club for Growth, which in recent years have financed the primary foes of incumbent Republican lawmakers they thought were too weak on slashing government programs.

Leaders of the counter-initiative have delivered more than 2 million petitions to Obama, staged protests outside the White House and the San Francisco office of House Minority Leader Nancy Pelosi and run TV and newspaper ads.

The Obama proposals are a nod to Republicans who’ve said they’d consider increasing tax revenues only in tandem with significant entitlement revisions.

Sens. Lindsey Graham of South Carolina and Lamar Alexander of Tennessee are among a handful of key Republican lawmakers who praised Obama for making a politically risky move that puts him at odds with important supporters.

“The president is showing a little leg here,” Graham told NBC last month. “He has sort of made a step forward in the entitlement-reform process that would allow a guy like me to begin talking about flattening the tax code and generating more revenue.”

The liberal groups’ warnings to Democratic lawmakers may explain why some prominent congressional Democrats who usually are strong Obama allies are breaking with him over entitlement revisions.

Sen. Tom Harkin, an Iowa Democrat, introduced a resolution last week with 16 co-sponsors, all Democrats, opposing the president’s plan.

“We cannot balance the budget on the backs of millions of North Carolina seniors, veterans and surviving military family members who rely on Social Security and veterans benefits,” Sen. Kay Hagan of North Carolina, one of the co-sponsors, said in a statement.

Another co-sponsor, Sen. Mark Begich of Alaska, said in an interview: “I do not think it is right to ask our seniors and veterans to pay the price of decades of wasteful spending.”

The new inflation calculator is called the “chained” consumer price index because it recognizes that as prices rise, even slowly, consumers buy fewer of the same items.

Opponents of using the chained consumer price index for Social Security counter that seniors spend a greater share of their money on health care, which they say costs more than other goods.

At current rates, the change would nudge down the annual Social Security benefits increase from 1.7 percent to 1.5 percent. Applying that modification would decrease the average Social Security benefit hike by $36 next year, just a tiny fraction of the average annual payment of $14,760 , but the hit would reach $360 in 2023, according to testimony by Jeffrey Kling, the head of economic analysis for the nonpartisan Congressional Budget Office, at an April 18 hearing of the House of Representatives Social Security Subcommittee.

The change wasn’t part of the budget that the Democratic-controlled Senate passed March 23, and that plan’s architect, Senate Budget Committee Chairwoman Patty Murray, D-Wash., doesn’t support the Obama proposal. Another influential Democratic critic is Sen. Max Baucus of Montana, the chairman of the Senate Finance Committee. He noted that Obama’s budget also would accelerate the Medicare means testing, which was begun under President George W. Bush to make wealthy recipients pay more for Medicare, by creating four new upper-income tax brackets and setting higher premiums for them.

“Cutting Social Security and Medicare will hit our seniors with a one-two punch,” Baucus said at an April 17 budget hearing.

In addition to saving $230 billion in Social Security spending over a decade – minus $15 billion to protect the very poor, old and people with disabilities – the new inflation calculator would recoup $38 billion through being applied to other federal benefits, among them pensions for military and civilian employees and Pell Grants for college students. The accelerated means testing for Medicare would preserve another $50 billion.

Versions of these changes were contained in the recommendations of a high-profile task force Obama set up in 2010, led by former White House Chief of Staff Erskine Bowles, a Democrat, and Republican former Sen. Alan Simpson of Wyoming. The president largely ignored those recommendations.

Since August 2011, Obama and Democratic congressional allies have reached several temporary agreements with Republican leaders amid an ongoing, often acrimonious failure to achieve a broader “grand bargain” over future tax and spending policies.

The president has gotten at least muted support from some Democratic lawmakers, among them Rep. Ron Kind of Wisconsin, the head of the House New Democrat Coalition, and Rep. Kurt Schrader, a Blue Dog Democrat from Oregon. Both groups comprise lawmakers who are more fiscally and socially conservative than some of their Democratic colleagues.

“He recognizes that if we don’t do something, the entitlement programs are going broke,” Schrader said of Obama. “A lot of my (Democratic) members don’t get that.”

The division in Obama’s ranks delights his political foes.

Kevin McLaughlin, a senior political adviser with the National Republican Senatorial Committee, said Democrats already faced a difficult task in trying to maintain a Senate majority, with 21 Democrats and 14 Republicans up for re-election in 2014.

“They have a very, very tough map,” McLaughlin said of the Democrats. “They don’t need their base making it tougher on them.”

Email: jrosen@mcclatchydc.com; Twitter: @jamesmartinrose

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