Obama’s Debt Talks Alarm Democrats About Social Security

President Barack Obama looked forward Thursday to a weekend of “hard bargaining” with Republicans over the federal budget deficit — but faced a rebellion from his own Democrats and the elderly over possible cuts to Social Security, adding yet another explosive issue to an already volatile mix.

Obama met with congressional leaders of both parties Thursday morning in the Cabinet Room of the White House, their first session to discuss the deficit cuts Republicans demand as their price for voting to raise the government's debt ceiling.

If Congress doesn't raise the debt ceiling by August 2, Treasury Secretary Timothy Geithner has warned that the government could go into default. That could panic financial markets and kick the economy back into recession.

Obama called the Thursday meeting “very constructive” and said he'd reconvene the group of eight leaders at the White House on Sunday after congressional and White House staff meet Friday and Saturday to hash out the exact details of everyone's opening proposals.

“At that point,” Obama said, “the parties will at least know where each other's bottom lines are and will hopefully be in a position to then start engaging in the hard bargaining that's necessary to get a deal done.”

Obama is pressing for a “big” deal that would total about $4 trillion in cuts to projected deficits over the next 10 years. He had proposed a $4 trillion plan in April that would be spread over 10 or 12 years, but recent talks had focused on a $2 trillion goal.

Rep. Peter King (R-New York) said before the White House meeting that he got a sense after House Republicans met Thursday morning that there was a 50-50 chance a deal could be struck within 48 hours.

However, Obama's signal that he's willing to consider changes on Social Security set off a storm of criticism from Democrats and their supporters. And his insistence on tax increases remains a major sticking point for Republicans that could jeopardize a larger deal. Then, too, how deeply to cut defense spending could be a deal-breaker for either side, and so could Medicare. In short, getting Democrats and Republicans to agree on major changes in all of these areas as part of a “grand bargain” is by no means guaranteed in today's Washington, where no-compromise ideology and partisanship is the ethos of the day.

“We do not support cuts in benefits to Social Security and Medicare,” said House Minority Leader Nancy Pelosi (D-California) ” We're not going to balance the budget on the backs of America's seniors, women and people with disabilities.”

“The gut, visceral feeling among Democrats is that these are the core values of the Democratic Party, and for that matter the American people, and you shouldn't tamper with the benefits in Social Security or Medicare,” said House Democratic Caucus Chairman John Larson (D-Connecticut)

AARP, the influential association of people age 50 and older, vowed to fight any cuts to Social Security or Medicare.

“AARP will not accept any cuts to Social Security as part of a deal to pay the nation's bills,” said A. Barry Rand, the group's chief executive officer. “Social Security did not cause the deficit, and it should not be cut to reduce a deficit it did not cause.”

The group singled out one oft-mentioned proposal to rein in costs: changing the formula for increasing cost-of-living payments every year so they'd rise more slowly.

“AARP will fight any cuts that are proposed to this important program, including proposals to reduce the cost-of-living adjustment for beneficiaries,” Rand said.

The liberal group Moveon.org said a large majority of its members would be less likely to help Obama's 2012 re-election campaign, with time or money, if he cut Medicare or Social Security or fails to raise taxes on the wealthy.

“The way to deal with the deficit is to reduce defense spending, make the super-rich pay their fair share, and get the economy growing again,” said Justin Ruben, the group's executive director. “Balancing the budget by cutting Social Security or Medicare benefits is just plain wrong.”

Obama aides insisted that any talks about Social Security would not be tied to deficit reduction. But they did not deny that Social Security changes would be discussed during the deficit reduction talks.

“He has always said that it is not connected to the short- and medium-term deficit problems,” White House Press Secretary Jay Carney said. “It doesn't mean that he's not willing to talk about, as a separate matter … the need to strengthen Social Security in the long term in a way that doesn't slash benefits.”

Obama himself said Wednesday that he's ready to talk about Social Security during the debt talks.

“What we need to do is to have a balanced approach where everything is on the table,” he said. “We need to reduce corporate loopholes. We need to reduce discretionary spending on programs that aren't working. We need to reduce defense spending…. We need to look at entitlements, and we have to say, how do we protect and preserve Medicare and Social Security for not just this generation but also future generations. And that's going to require some modifications, even as we maintain its basic structure.”

Adding Social Security to any deal — even if it did not count toward reducing the deficits — would help add to the idea that the broad agreement was a grand and historic bargain.

“Bigness is our target,” Carney said. “Bigness is important because the opportunity to do something this significant does not present itself very often. The stars, in some ways, have aligned here.”

Republicans welcomed the discussion of broader entitlement changes.

“We have a nearly bankrupt entitlement system that is ongoing, regardless of what the revenue coming in is,” said Sen. Kay Bailey Hutchison (R-Texas). “The debt limit and ongoing deficit reduction negotiations need to put entitlement reform on the table. Until yesterday, they had refused to do it.”

At the same time, Obama's push for $4 trillion in deficit reductions worried some Republicans who said they might be able to reach a lower figure with spending cuts alone — which they like — but that anything else could require tax increases — which they flatly oppose.

“We are not going to raise taxes on the American people,” House Speaker John Boehner (R-Ohio) said en route to the White House meeting. “We are not going to raise taxes on the very people that we expect to reinvest in our economy and to help grow jobs.”

(William Douglas and Lydia Mulvany of the Washington Bureau contributed.)

© 2011 McClatchy-Tribune Information Services

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