President Obama releases his latest deficit-reduction plan Monday. It will contain no changes to Social Security, the White House says, but no such announcement has been made about other entitlement programs.
All eyes will be on President Obama when he unveils his latest deficit-reduction plan Monday. But this time around, the reaction of the Democratic left – his political base – may be more important than that of the Republicans.
Just two months ago, during high-stakes negotiations with House Speaker John Boehner, Mr. Obama offered cuts to Social Security benefits and a boost in the eligibility age for Medicare. The talks collapsed, and that proposal died.
Now, as the work of Congress’s “super committee” on deficit reduction proceeds, Obama is pulling back. The new plan will contain no changes to Social Security, the White House has already said. But no such announcement has come on other entitlements, and progressives are anxious.
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“I don’t think our work is done at all,” says Eric Kingson, co-director of the group Social Security Works and a professor of social work at Syracuse University in New York. “There’s no question we have a long-term imbalance ... but it has to do with tax cuts, wars we haven’t been paying for, and increasing health-care costs, which are astronomical.”
The liberal group MoveOn is also issuing warning shots in advance of Monday’s announcement from the Obama administration, and it’s urging its members to contact the White House to keep the heat on the president. MoveOn praised Obama’s jobs plan, but said that goodwill could evaporate quickly.
“If the president comes out on Monday calling for cuts to Medicare and Medicaid benefits, the enthusiasm he's built up in the last week will disappear in an instant,” said Daniel Mintz, campaign director for MoveOn.org, in a statement. “The president gains nothing by negotiating with himself in the vain hope of attracting Republicans who have proven again and again that they're not interested in compromise.”
Polls show Obama still enjoys broad support from Democrats, though that number has been drifting downward. But more important than the polls is the willingness of liberals to donate, organize, and canvass on Obama’s behalf. As in 2008, he will need high turnout from minorities to win reelection, and a sense of discouragement could depress that vote.
Even if Social Security is off the table for now, Medicare may not be. As of midweek, the White House had moved away from raising the Medicare eligibility age (from 65 to 67) but was considering cuts to providers and higher premiums for wealthier recipients, according to The Wall Street Journal.
The White House has resisted reporters’ pleas for advance details, sticking to generalities. “Back to first principles here: Balance is what the American people demand. Balance is what the president will put forward on Monday,” White House press secretary Jay Carney said Friday. A “balanced approach” to deficit reduction, in White House terms, refers to both spending cuts and tax increases.
Mr. Carney also reacted to Speaker Boehner’s speech the day before on the economy, in which Boehner ruled out any tax increases.
“What was striking about ... the jobs speech yesterday is that when he said no tax hikes, he was essentially reiterating the position of the Ryan budget,” Carney said, referring to House Budget Committee chairman Paul Ryan. That proposal would essentially turn Medicare from an open-ended entitlement into a voucher plan.
“There's no way to get from here to there if you don't do it in a balanced way, without tattooing Medicare, without decimating programs that support vulnerable Americans,” Carney said.
The president raised the stakes last week on deficit reduction by putting forth a jobs plan with a hefty price tag – $447 billion – and then proposing it be paid for with an array of tax increases. Those “pay fors” would come in addition to the $1.5 trillion in deficit reduction that the congressional super committee is tasked to find.
The 12-member super committee also faces pressure from a large, bipartisan group of senators – 18 Republicans, 17 Democrats, and one independent – who are urging the committee to “go big” – at least $4 trillion in deficit reduction.
The group’s goal is to stabilize the debt as a share of the economy and reduce it. This high level of deficit reduction would provide fiscal certainty and send a positive signal to the financial markets, the senators say.