Last week, a
disheartening letter from 64 Senators went to President Obama, demanding that "grand bargain" that would include "reforms" of Social Security.
As you know, a bipartisan group of Senators has been working to craft a comprehensive deficit reduction package based upon the recommendations of the Fiscal Commission. While we may not agree with every aspect of the Commission’s recommendations, we believe that its work represents an important foundation to achieve meaningful progress on our debt. The Commission’s work also underscored the scope and breadth of our nation’s long-term fiscal challenges.
Beyond FY2011 funding decisions, we urge you to engage in a broader discussion about a comprehensive deficit reduction package. Specifically, we hope that the discussion will include discretionary spending cuts, entitlement changes and tax reform.
What digby said:
This is not looking good in my opinion. They are determined to push this and there is almost no energy directed toward cutting defense. Medicare is probably off the table because of the recent health care battle and the GOP's ruthless, hypocritical attack on Democrats. That leaves discretionary spending and Social Security, the issue which the country has been prepped to believe is going broke unless something is done.
The Democrats will pay the price for this, but I'd guess most of the people who signed that letter are fine with that. I'm not sure about the others. And if anyone thinks this is designed to get the president to cover for their "tough choices" they're cracked. This is about doing Obama's dream, the Grand Bargain that only wealthy millionaires and Villagers could love. There is no political upside for anyone but him --- and that's only because he's probably going to be running against some unelectable Tea Partying wingnut. The rest of these Dems may not be so lucky.
And as BTD points out, that's some chutzpah calling for tax "reform" after most of them voted for continuing the Bush tax cuts. And that there's "the absurdity of a supermajority of Senators acting as if they have nothing to say on this, but more striking to me is Democrats signing on to this document that expressly calls for 'spending cuts' and 'entitlement changes' but can not say the words 'tax increases.'"
Tax increases are supposedly critical to any deal the White House would support.
The White House will not prominently inject itself into congressional negotiations on Social Security reform until after key legislators in both the House and Senate unveil their plans to reduce projected long-term deficits, according to administration officials....
At a roundtable meeting earlier this month, a senior Treasury official described the landscape to about a dozen reporters and bloggers. The optimal moment for President Obama to substantively weigh in on Social Security reform proposals, the official said, will come when House Republicans unveil their budget resolution for fiscal year 2012 and a bipartisan working group in the Senate unveils its deficit reduction package, assuming they reach an agreement.
Those two proposals will force Republicans to grapple with the tensions between their broad opposition to increasing federal revenues and their professed goal in these discussions of reducing the deficit. It's put them in a bit of a box, the official said, and it's possible they may abandon their efforts, and lay the blame at Obama's feet, before unveiling anything. But if their efforts are serious, Obama's economic team sees an opening -- to take pressure off the non-defense discretionary portion of the budget, and to send a signal to markets that the U.S. government isn't so paralyzed that it can't address larger, looming fiscal challenges.
So what constitutes a serious effort? Basically a recognition that Social Security revenues and general revenues have to rise, if the administration is going to accept anything that cuts benefits, even modestly.
President Obama laid out a comparable framework in his State of the Union address.
"[W]e should also find a bipartisan solution to strengthen Social Security for future generations," Obama said. "We must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans' guaranteed retirement income to the whims of the stock market."
The administration has been purposefully evasive about what constitutes "slashing," but the senior treasury official made it clear that the White House will only consider plans that harm their progressive interests if revenues are on the table in a significant way. Indeed, as something of an opening bid, Obama's OMB director Jack Lew has recently, and prominently argued that Social Security is not driving current or medium-term deficits.
In other words, cuts to Social Security are still on the table, provided revenue increases for it are coupled with those cuts. Social Security should never have been put on the table of deficit and budget negotiations, but Obama put it there by convening the deficit commission, and these 64 Senators are keeping it there. And the tax cut deal makes the whole situation even more of a mess.