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February 20, 2014
A progressive political victory emerged in Washington in the fight over future funding of Social Security on Thursday, as news reports
said President Obama will not propose using a new and stingier
cost-of-living adjustment (COLA) formula that would cut future benefits
when presenting his 2015 federal budget.
“The White House says
President Barack Obama’s upcoming budget proposal will not include his
past offer to accept lowered cost-of-living increases in Social Security
and other benefit programs,” the Associated Press reported. “Those had
been a central component of his long-term debt-reduction strategy.”
AP report, later confirmed by the White House, is the latest twist in
what has been a week of contradictory signals from top White House
officials who said that Obama was still open to reductions in future
Social Security benefits as part of a major budget deal with
"This offer from the President remains on the table,
Deputy Press Secretary Josh Ernest said Thursday, who went on to explain
that the stingier COLA was not in the White House's proposed 2015
budget because Republicans never made a serious offer to end tax breaks
for the rich.
"The President is not going to be in a position
where he is going to ask senior citizens and middle-class families to
make sacrifices in pursuit of reducing the deficit and not ask the
wealthy and well-connected to make some sacrifices, too; that it’s just
not fair and it’s not good policy," he said.
But the White House
spokesman said that Obama was still open to future Social Security cuts
if the Republicans got serious about closing tax loopholes. "If
Republicans hearing this exchange are thinking to themselves, well, you
know what, that makes a lot of sense, maybe I should call the White
House and say, 'Hey, look, I’m willing to close some tax loopholes if
you’re willing to put some entitlement reform changes on the table,'
then I would encourage those Republicans to call the White House right
now. I’m sure we can set up a meeting and we can have a conversation
about that. But that offer has been on the table for more than a year
and we have not seen any constructive engagement from the other side."
The AP report prompted many progressive advocacy groups to issue press releases calling it "welcome news" and declare victory.
"We are thrilled," said Richard Fiesta, Executive Director of the Alliance for Retired Americans
"Our voices were heard. Nationwide, grassroots actions and
people-powered politics worked. We applaud the President for doing the
right thing: listening and keeping this unjust cut out of his budget
proposal. A negotiating tactic or not, cuts to Social Security’s earned
benefits will only serve to increase income inequality and hurt the most
vulnerable members of our society."
In recent days, a groundswell
of opposition has arisen in anticipation that Obama would include the
so-called chained CPI in his fiscal year 2015 budget. Sixteen U.S. senators
and 117 representatives
have signed letters urging him to drop the proposal. Advocacy groups launched
e-mail campaigns and were ramping up pressure
Thursday morning—when the AP report broke.
chained CPI would lower Social Security benefits by 6.5 percent over 20
years, the National Women’s Law Center found, saying that equals
16 weeks of lost groceries for a single 85-year-old woman.
the mid-1980s, Congress has repeatedly cut back spending on Social
Security by proactively instituting stingier cost-of-living formulas.
Last fall, economist Dean Baker testified
in Congress that benefits for retirees, averaging $1,290 a month in
2014, would be more than 25 percent higher without these cutbacks since
1983. In January, Congress similarly cut back
future increases to veterans’ pensions.
White House is expected to release its 2015 budget in early March. In
the past week, top officials were equivocating on whether the chained
CPI would be included.
On Thursday, Gene Sperling, outgoing White
House Director of the National Economic Council and Assistant to the
President for Economic Policy spoke at the “Morning Money Breakfast
Briefing” in Washington organized
by Politico.com and the Peter G. Peterson Foundation, which has spent
millions on p.r. campaigns to significantly cut Social Security and
other safety net programs to retire the federal debt without a tax
increase. Tweets reported, “Sperling won’t say whether budget will
include chained CPI [the stingier COLA]. Says potus [president of the
United States] has been willing to compromise.”
Last Friday, top White House Spokesman Jay Carney was asked
about the chained CPI and the 2015 budget and appeared to endorse it,
saying, “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.”
can claim a political victory because it will signal a shift in the
framing of the discussion around strengthening Social Security. What
progressives will likely do next is try to turn the political discussion
to expanding Social Security benefits and raising taxes on the
wealthiest Americans ensuring the program is solvent for decades.
In the Senate, Iowa Democrat Tom Harkin has introduced a bill
to do just that. It would increase current benefits by about the same
amount that the chained CPI would have cut—about $70 a month, shift to
another COLA that more accurately tracks the elderly’s annual expenses,
and raises Social Security taxes for people earning more than $117,000.
Most Americans are not aware that only the first $117,000 of income is
taxed for Social Security; capital gains are not taxed for it.
In contrast, debt-obsessed Republicans attacked Obama for not showing fiscal discipline and embracing austerity.
withdrawal by the President on this specific issue, and his general
pivot away from focusing on the nation's medium and long-term fiscal
challenges, reflects a dangerous trend," said Maya MacGuineas, head of
the Peterson-bankrolled Campaign to Fix the Debt. "The nation needs the
President to lead on this issue. The clear pullback on his part is a
disturbing sign that he will not."
It will be a curious to watch
if the issue is raised by Republicans in a 2014's congressional
elections, as polls consistently find that upwards of 80 percent of
Americans, regardless of party, support Social Security and back steps
to strengthen it—including raising taxes on wealthier Americans.
Steven Rosenfeld covers
democracy issues for AlterNet and is the author of "Count My Vote: A
Citizen's Guide to Voting" (AlterNet Books, 2008).
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