Grand bargain extortion?: Liberals fear Social Security cuts are coming

Liberal House members tell Salon they're worried "Chained CPI" could end up on the table. Here's what it would mean

Published October 3, 2013 12:30PM (EDT)


With the government shutdown in its third day and bank CEOs having met with the president, Democrats are hoping pressure from GOP moderates, the media and Big Business will force House Republicans to reopen the government and step back from the brink of a debt default. But as Speaker Boehner reportedly seeks a "grand bargain" with Obama, some progressives are raising concerns about the potential for a last-minute, closed-door deal with a heavy price – including a proposed Social Security cut praised repeatedly by the president.

“I’m particularly concerned,” Rep. Ted Deutch, D-Fla., told Salon Wednesday afternoon, “especially today as we’re in the middle of this government shutdown, that some may decide that in order to stop the government shutdown, in order to prevent us from defaulting on our debt, that we’re going to ram through this Chained CPI [approach to reducing Social Security benefits], which is going to hurt seniors. And it’s going to hurt disabled, and it’s going to hurt veterans. And I think we’ve got to work to avoid it.” Deutch noted that Obama “has advocated for a move to Chained CPI.”

“Chained CPI” refers to a proposed change in cost-of-living calculations that would decrease future Social Security payments. As I’ve reported, it’s an idea that President Obama has touted in the past, both as part of his “pursuit of strengthening Social Security for the long-term” and as an example of his willingness to compromise with Republicans (some of whom have asked why, if Obama supports Chained CPI on the merits, it should count as a concession).

National Review's Robert Costa reported Wednesday evening, based on GOP sources, that Speaker John Boehner "wants to craft a 'Grand Bargain' on fiscal issues as part of the debt-limit deliberation." Costa's sources said that "entitlement reforms, such as chained CPI," and Obamacare changes were "all on the table as trades for delaying aspects of sequestration and extending the debt limit."

In contrast, President Obama told CNBC Wednesday that until there was "a clean piece of legislation that reopens the government," and "Congress allows Treasury to pay for things that Congress itself already authorized, we are not going to engage in a series of negotiations." Obama said he was "prepared to negotiate on anything," and that it was "important for us to deal with our long-term entitlement spending."

In a media call Wednesday morning, Rep. Deutch predicted “a drumbeat in some parts of Capitol Hill that says that the path to a budget deal has to include cuts to Social Security and Medicare and Medicaid.” Max Richtman, president of the National Committee to Preserve Social Security and Medicare, told reporters, “Millions of citizens around the country are focused on the high probability that we’ll see a backroom deal sometime soon that would really cut their lifeline benefits.” Richtman noted that Chained CPI “keeps surfacing, despite widespread public opposition.”

Asked Tuesday whether he was concerned that Obama would put Chained CPI on the table as part of negotiations to end the shutdown or raise the debt ceiling, Congressional Progressive Caucus Co-Chair Keith Ellison told Salon, “Yeah, I’m always on the lookout for things that might be offered from our side that are things we shouldn’t offer.” The Minnesota Democrat then slammed the “extortion-type tactics” of the GOP.

“If we cut the cost of living adjustment,” Deutch told reporters, “we’re telling hungry seniors, ‘You’re not pinching your pennies hard enough … Skip more meals, don’t fill all of your prescriptions.’” Deutch told Salon that his constituents include “a large number of seniors who lived through the Great Depression. They know how to be thrifty. But they also rely on their Social Security, and don’t expect the federal government, Congress and the White House to take action to cut their benefits when Social Security isn’t the reason that we’re in the situation that we find ourselves in today.” Rather than cutting benefits, Deutch noted he’s proposed changes to Social Security including phasing out the cap that limits contributions on six-figure salaries.

Richtman’s group and economist Dean Baker also announced the release of a new report warning Chained CPI would kill jobs. Drawing on Congressional Budget Office data, the report estimated that implementing Chained CPI starting in 2015 would lead to a $23 billion reduction in benefits for the year 2023, and thus a $31.4 billion loss of economic output that would kill 204,100 jobs that year. Baker, who co-directs the Center for Economic and Policy Research, told reporters that the estimates involved were “very conservative.”

Rep. Deutch told Salon “there’s just no place for” Chained CPI in discussions around the government shutdown or the debt ceiling. “And I don’t know that [Obama] is going to bring it up,” said Deutch.But whether it comes up now, or it comes up further along the road, today’s report highlights what the negative impact would be if we went down this path.”

By Josh Eidelson

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