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July 07, 2011 4:20 PM All about the benefits

By Steve Benen

The word of the day is “benefits” — as in, the specific kind of entitlement cuts that Democrats simply cannot tolerate as part of the debt-reduction talks.

There’s House Minority Leader Nancy Pelosi (D-Calif.):

Pelosi, D-California, told reporters later that she wants Obama to “have the room” to reach a deal, and she offered her “full cooperation to do that.” However, she said, House Democrats “do not support cuts in benefits for Social Security or Medicare,” and negotiations on specific reforms to those programs should be separate from a broader deficit reduction deal.

There’s Sen. Chuck Schumer (D-N.Y.), vice chairman of the Senate Democratic Conference:

“The vast majority of Democrats, House and Senate, have the view that Medicare benefits should not be cut. There’s also a generally-agreed-to view that there are savings to be wrought out of Medicare in the health care bill through making the system more efficient. Delivery system reform, making sure that when hospitals readmit people because they made a mistake they don’t get double reimbursement, things like that.

“So, I think we’re pretty united, along with speaker Pelosi that Medicare cuts, actual cuts in the benefits, are not something we would want to entertain.”

There’s Rep. Chris Van Hollen (D-Md.), the ranking Democrat on the House Budget Committee:

“We will not balance the budget on the backs of Social Security beneficiaries, and we will not support cuts for Medicare beneficiaries. We do believe that there are ways to save additional funds. For example, on Medicare, one way to do that is to get a better deal for the Medicare program for the prescription drug industry. There are ways to generate additional revenues to help the Medicare solvency issue without slashing benefits to Medicare beneficiaries.”

There’s even the AARP:

“AARP urges all lawmakers to reject any proposals that would cut the benefits seniors have earned through a lifetime of hard work,” said Barry Rand, the organization’s CEO.

The point, of course, is that not all entitlement cuts are created equal. For Democrats, there have consistently been two lines they’re unwilling cross: (1) privatization is out of the question; and (2) no benefit cuts. For Republicans, the list of demands is far more ambiguous. GOP leaders have said “Medicare cuts” are a necessity, but they haven’t said what kind of cuts they expect.

With Medicare, Dems could, for example, cut payments to the pharmaceutical industry, alter reimburse rates, do more to link provider payment to outcomes, etc. Politically, Dems think this shifts the burden back to the GOP: “You said you wanted Medicare cuts or you’d deliberately cause a crisis. Well, here are some Medicare cuts we can accept. Is it a deal or are you really that eager to punish seniors?”

With Social Security, this is far trickier. Cutting the program without affecting some benefits is practically impossible, so if Dems simply take Social Security benefit cuts off the table, the program itself is probably pretty safe.

The bottom line, though, remains the same: the more Democrats and seniors’ advocates talk about protecting entitlement programs’ “benefits,” the more it narrows the scope of the negotiations to structural changes.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

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  • T2 on July 07, 2011 4:34 PM:

    Conservatives have wanted to eliminate SocSec and Medicare forever. They still do.
    SocSec has no business even being in this conversation since its problems are still years away and easily fixed by a simple raising of the cap....not even a giant raise, just put it at $125,000 and we're done.
    This is a pure and simple attempt to eliminate Social Security by the Republican Conservatives. end of story.

  • kevo on July 07, 2011 4:40 PM:

    Whatever comes from the mouths of our political leaders is utter bullshit if it resembles reductionism!

    What's the bullshit?

    The very idea we, the People, will continue listening to our political leaders when they claim American Exceptionalism while at the very same time undermine what makes us great - the ability to take care of ourselves through government, government actions and government policies that are supposedly for the people, of the people and by the people!

    Instead, what are we being fed?

    For the good of "too big to fail," because taxing uber-rich people cannot be done, and corporate welfare must continue unquestioned, we are fed bullshit that we can't afford to take care of our downtrodded, huddled masses and grow the economy at the same time!

    The Washingtonians who would call themselves elected leaders are so far out of bounds when it comes to common sense, it makes my head want to explode!

    Deficit reduction, and out-of-control-spending (if such a myth is close to being real) are distractions!

    Doing nothing regarding the sunsetting of the Bush Tax cuts at the end of this year, while simultaneously passing unemployment relief legislation and other laws promoting job growth would get us out of our deficit faster than any "grand compromise" being looked at right now in Washington by the political players who have already admitted they can't get anything done!

    How long will we allow the Democrats and Republicans to chase their tails until we realize they've been merely involved all this time in stupid human tricks?

    Until the American electorate punishes ineffective political leaders at the polls, we will continue to get mired in the inanity that comes with vested interests relentlessly at the legislative gate seeking handouts when they don't need them! -Kevo

  • walt on July 07, 2011 4:53 PM:

    I've already called my congressman to let him know that I regard any cuts to SS and Medicare beneficiaries as intolerable. We all need let our representatives know if only to give Obama the spine he was apparently born without. The income distribution in this country gets worse by the year and to have a Democratic president propose to make it even worse is unconscionable.

  • samsa on July 07, 2011 5:00 PM:

    There is no way I will vote for Obama in 2012 if he so much as touches SS or Medicare with a hundred foot pole.

    Grand bargain my foot.

    We voted for hope and change. Not cut and pray.

  • akindependent on July 07, 2011 5:00 PM:

    Raising the cap on SS solves the problem without cuts to benefits.

  • jon on July 07, 2011 5:02 PM:

    Steve I so appreciate this blog for digging out these kind of things that helps translate the issues of the day. Thank you very much.

  • T2 on July 07, 2011 5:06 PM:

    yes, akindependent, it does. Why do you suppose no on talks about that? The same reason GOPers want tax cuts for the RIch. Anyone with any income above middle class has to be protected at all costs. The rest of us can go to hell. By the way, Obama doesn't talk about that either...

  • bigtuna on July 07, 2011 5:09 PM:

    So went to do some work this am north of an air force base, and saw big cargo and transport planes arriving, 2-3 minute spacing. The entire discussion of debt limits, now morphed into republican dominanted budget discussions, never seems to address any cuts in the military. I know 2-3 countires that we should be the hell out of now. That should be worth a few bill a month ...

    sign

  • hornblower on July 07, 2011 5:11 PM:

    As one of the few on this board who is a Medicare and SS recipient, I feel that there is no problem means testing either or both. This idea that everyone should get maximum benefits because they paid into it is the same nonsense we hear whenever someone is asked to sacrifice for the common good. We all need medical care but the deductible has to be higher for those like me who can afford it. The same with SS.
    Of course I also want to see higher taxes on the wealthy, corporations and cuts in the defense budget. They all go together and Mr. Obama is pushing for both. I am pleased to see it.

  • bigtuna on July 07, 2011 5:22 PM:

    i recommend Ted Frier's post at theygaveusarepublic - - The so called negotiations here are about the republicans goal to dismantle the New Deal, kill SS, reduce medicare, etc. It is not about tax reduction per se; or budget cuts, or the debt. It is about the repubs. salivating at a goal they cannot achieve directly - the dismantling of a set of somehwat progressive social / fiscal policies, radically reduced spending, tax benefits for the upper 5 %, et. To quote Frier

    "And just so long as Republicans all hang together and refuse to let tax increases become part of the deficit-reduction package, no matter what -- even if it means a worldwide capital crisis as the US credit rating collapses from AAA to D (according to Moody's and S&P) -- Republicans just might be able to do more than slash spending a few trillion dollars for food stamps and college loans and other things the American people need. They also might be able to stick a harpoon in that Great White Whale they've been hunting with Captain Ahab-like obsession -- the New Deal welfare state itself -- and gut Social Security and Medicare and all the rest."

  • Gridlock on July 07, 2011 5:34 PM:

    hornblower,

    I appreciate your willingness to 'take one for the team' through means-testing. However, today's GOP would never go for it. If you think they fight against raising taxes on the rich, watch the fight when they get 'less' from SS than others.
    Don't you know you're talking about class warfare?? Why does everyone pick on the rich? boo hoo

  • zeitgeist on July 07, 2011 5:52 PM:

    the Dems are playing with fire here, trusting in the intelligence and attentiveness of the American public, trusting the public cannot be spun by Republican lies that sound just enough in the truth, trusting in nuance.

    here's the set up for my future "i told them so": if Dems bargain on SS or Medicare or Medicaid at all the Republicans will tie it back to the Ryan plan and make "reforming Medicare" bipartisan and will slam Democrats for saying the R's were trying to kill it when Dems agreed to "similar" changes.

    the public will not be able to sort out the difference, the R's are off the hook that Ryan had put them on that won us NY-26, and we're screwed in congressional elections in 2012.

    why we'd lift them out of the deep hole they dug is beyond me, but the only time between now and Nov. 2012 that the word "Medicare" should cross the lips of any Democrat is to blame "Paul Ryan and the Republicans" for "trying to kill Medicare as we know it."

  • bdop4 on July 07, 2011 5:56 PM:

    This deficit reduction scam is pure bullshit. Other than the bankruptcy, foreclosure and repo industries, how does applying tax revenues towards deficit reduction create one single job?

    That Dems agreed to this charade as part of raising the debt ceiling is even more pathetic.

  • CDW on July 07, 2011 5:58 PM:

    GOP leaders have said �Medicare cuts� are a necessity, but they haven�t said what kind of cuts they expect.

    Obama will help them with that. He has his list ready courtesy of Simpson/Bowles.

  • hornblower on July 07, 2011 6:05 PM:

    Grid,
    The Repubs may never go for it but putting it on the table is a necessary step. When they reject it you put them in bind. They will have to answer for it in the future. Even the Villagers will be upset.

  • gone_west on July 07, 2011 7:00 PM:

    The republicans have agreed to overhaul the tax code in exchange for entitlement benefit cuts. They achieve a major victory if they get entitlement benefits cut. But wait, there's more. It gets even better. The republicans get a shiny new tax reform toy to sell to lobbyists and fund raisers from every industry in America. Pinch me, but full-sized bronze statues of the republican leadership wgo pulled this twin coup will be on display at the Reagan Library in Simi Valley by the end of this decade. You can count on it.

    Just exactly what the democrats think they are getting from this Grand Bargain is more or less clear, not troubling at all if you've given up on the idea that the democrats have a spine. It looks like they think selling the tax reform toy looks like the road to political funding from the same special interest groups that will be buying up the republican votes. Couple that with the idea the democrats can sell their constituency that the mean old republicans made them cut the entitlement programs, and if given the chance, the republicans would have cut them even more, they've got cover. That's all cowards ever want.

    It's a no brainer of a deal for each party. Literally and hyper-diabolically.

    Muck both parties.

  • John Owl on July 07, 2011 7:13 PM:

    Statement from SS rights group about Obama cutting SS COLA benefits using Chained-CPI:

    Sacrificing Social Security Benefits for Millions of Americans isn�t Fiscal Responsibility

    http://www.ncpssm.org/entitledtoknow

    Max Richtman, National Committee to Preserve Social Security and Medicare:

    �While President Obama has acknowledged that Social Security is not the cause of the federal deficit, news reports today claim the White House has now proposed Social Security cuts which would impact millions of middle class Americans for generations. Social Security should not be used as a bargaining chip. Proposing cuts which touch virtually every American family in exchange for closing tax loopholes and ending tax cuts for the wealthy few is not �shared sacrifice�.

    Social Security is a self-financed program paid for by Americans throughout their working lives. It has kept millions from poverty for more than 75 years and has absolutely nothing to do with the federal deficit.

    President Obama has promised Social Security benefits for current retirees would not be at risk and that he would not �slash� benefits for future generations. However, that�s exactly what will happen if the COLA formula is changed as has been reported.

    The chained CPI is nothing more than a backdoor
    benefit cut Washington hopes Americans won�t notice or understand. 
    Having weathered two years of no COLAs, Washington now wants to tell seniors
    that �nothing� is too much.�

  • Doug on July 07, 2011 7:57 PM:

    hornblower, you might also consider that IF SS/Medicare benefits WERE means tested, it would immediately change those programs into nothing more than a form of Federally-run "welfare" programs; programs ALWAYS subject to change.
    All the remarks I've seen about NOT cutting SS/Medicare benefits have been attributable; not so those reporting cuts or changes in cost-of-living adjustments, although Imay have missed the attribution. The Democratic or Republican "aides" or "assistants" who refuse to give their names are just trying to influence the outcome of the negotiations and not in our favor.
    Should the IDEA of benefit cuts become accepted, then the Republicans will have won their 80-year fight against a dead man - FDR. That's why it's very heartening to see Schumer, Pelosi, Van Hollen and the AARP fighting pushing back at the idea of benefit cuts.
    If, however, in return for changing the COL formula, President Obama could get a package that included raisng the debt ceiling by an amount that would require several years to reach AND attacked the deficit "problem" on a ratio of, say, 50-50, I would be awfully tempted to say "Go for it!" Should the COL adjustment show itself to be unfair, as it most likely would, a Democratic-controlled Congress could easily correct that problem.
    The biggest hurdle would be getting ANY legislation that increased taxes through the House. It obviously would have to be a joint effort between Boehner-supporting Republicans and the Democrats, as the Teabaggers certainly wouldn't vote to support such a bill. If I understand House Rules correctly however, the majority party nominates, and elects, the Speakerat the beginning of each sessio. However,the entire House membership is involved in the REMOVAL of a Speaker anytime after that point. It could very well result that Boehner could be in the position of maintaining his Speakership based on the support of a minority of Republicans plus a majority of Democrats. That'd be bipartisanship I could believe in!
    So it probably won't happen...

  • tko on July 07, 2011 8:12 PM:

    Too bad our "Change you can believe in" president can't be counted on to stand firm against cuts in Social Security and Medicare. His presidency has been a long list of capitulations and half measures. Frankly, there isn't much hope that he will break his pattern.

  • FlipYrWhig on July 07, 2011 11:38 PM:

    And _I'm_ already irked by the next hypothetical capitulation! Unnamed sources familiar with the administration's thinking aren't gonna slip that one past _me_!

  • Sparko on July 07, 2011 11:39 PM:

    Let me reiterate, for the nuance challenged, that it sounds like they are going to put us in the harness for several more years before allowing us to collect the benefits we paid for. If there was a national debt crisis, what changed from December when Obama extended the tax cuts? Why were jobs important then and not now? We need leadership NOW. This whole business will not do anything to relieve the debt, will cripple the economy, and will reiforce the looting being done by the GOP. You can't grow the economy by shrinking it. Extending the retirement age hurts employment tangibly.

  • tko on July 07, 2011 11:42 PM:

    Since my last post, I read Glenn Greenwald's article on Obama and Social Security and Medicare. Obama, the anti-FDR.

  • Tobie on July 08, 2011 1:09 AM:

    Doug is right that the Democrats have been played for fools in asking for revenue increases/tax hikes in exchange for entitlement cuts. Shouldn't the grand bargain be: if you want me to agree to any cuts then you need to approve additional stimulus funds? Don't get me wrong. I'm not opposed to letting the Bush tax cuts expires. But it seems to me that the most effective thing for the President and the Democratic caucus to say is that the best way to reduce the deficit is to get people back to work. You'd manage to hit two big issues at the same time--jobs and the deficit--which is what the public's most worried about.

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  • bob h on July 08, 2011 7:34 AM:

    You could, for example, make further cuts to subsidies to Medicare Advantage plans, but the republicans would squeal like stuck pigs.

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