Liberals to Obama: not so fast on Social Security cuts

Liberal groups issued a primal scream Friday over the news that President Obama’s budget next week will include cuts to Social Security.

The president is proposing a new formula to calculate inflation, called “chained CPI,” effectively reducing annual increases in the payments to most seniors. This would come as part of a compromise on deficit reduction with Republicans that would also include higher taxes on the wealthy and increased spending on some domestic programs such as infrastructure.

But to progressive advocacy groups, compromising upfront on social safety-net programs equals surrender, and they will have none of that. Supporters’ (and reporters’) in-boxes exploded Friday with indignant reactions and suggestions of betrayal. Petitions are circulating. Funds are being raised.

Mr. Obama may have stuck his hand in a hornet’s nest, but having been safely reelected, he may feel he can take the gamble of alienating some of his supporters in the name of trying to reach a deal. But voices on the left disagree.

“The president’s decision to include cuts to Social Security benefits in his budget is wrong policy and dumb politics,” writes Roger Hickey, co-director of the Campaign for America’s Future (CAF). “His chained CPI plan is wrong because it hurts Americans who have worked hard their entire lives and who need the support that Social Security gives them. It is wrong because Social Security is financed separately and does not contribute to the deficit.”

It is “dumb” politically, Mr. Hickey continues, because now Republicans will call chained CPI a Democratic proposal and will attack Democrats in the next election for trying to cut Social Security.

In another e-mail, CAF made a pitch for donations. “Social Security represents America at its best, and now it is up to you to defend it,” writes the group’s other co-director, Robert Borosage.

MoveOn.org and former Clinton Labor Secretary Robert Reich released a video and petition Friday urging Obama to drop chained CPI and propose instead a higher cap on income subject to Social Security taxes.

“Social Security is not driving the deficit; therefore it should not be part of reforms aimed at cutting the deficit. The chained CPI, deceptively portrayed as a reasonable cost of living adjustment, is a cut to Social Security that would hurt seniors,” Mr. Reich says. 

“There are several sensible reforms to Social Security that should be considered to help make it sustainable, including lifting the ceiling on income subject to Social Security from $113,700 to $200,000 or more, as well as instituting a 1 percent raise in the payroll tax rate, a rate that hasn't changed in over 20 years,” Reich adds.

Jim Dean, chairman of Democracy for America – and brother of former Democratic National Committee chairman Howard Dean – called the news that Obama’s budget would include cuts to Social Security “a shot across the bow for the progressives who called their neighbors, spent weekends knocking doors, and donated millions to reelect him.”  

An e-mail from Mr. Dean links to a petition aimed at Congress.

“President Obama thinks Democrats will fall in line behind these proposals,” Dean continues. “If we can show that there is enormous opposition to these Social Security cuts, we can pressure Democrats in Congress to take these devastating cuts off the table.”

Where the liberal outrage will lead is uncertain. There’s plenty in Obama’s forthcoming budget that the Republicans have already rejected out of hand, including more tax increases after those they conceded in the Dec. 31 "fiscal cliff" deal.  

Political analysts already see the chances of a grand bargain on deficit reduction between Obama and the Republicans as a long shot. So maybe the hyperpartisanship of Washington will keep chained CPI from becoming a reality. But in the progressive world, nobody’s taking any chances.