It's not just taxes: Benefit cuts divide Dems

It's not just about taxes. There's another big obstacle to overcome as Congress and President Barack Obama work to skirt the fiscal cliff: deep divisions among Senate Democrats over whether to consider cuts to popular benefit programs like Medicare and Medicaid.
Associated Press
Nov 28, 2012

Much of the focus during negotiations seeking an alternative to $671 billion in automatic tax increases and spending cuts beginning in January has centered on whether Republicans would agree to raising taxes on the wealthy. Obama insists that tax increases on the wealthy must be part of any deal, even as White House officials concede that government benefit programs will have to be in the package too.

But even if GOP lawmakers agree to raise taxes, there is no guarantee Democrats can come up with enough votes in the Senate to cut benefit programs — as Republicans are demanding.

"We cannot come up with the solution for Medicare in the next two or three weeks," said Sen. Dick Durbin of Illinois, the No. 2 Democrat in the Senate. "It's too important, it's too serious, when it comes to this fiscal cliff debate."

Durbin has long said Democrats must be willing to discuss cuts to benefit programs in exchange for tax increases on the wealthy. But, he said Wednesday, the issue is too complicated to address in a short postelection session of Congress.

Republicans complain that Democrats are taking issues off the table, even as more GOP lawmakers are reluctantly considering tax increases.

"Democrats like to pretend as though they're the great protectors of Social Security, Medicare and Medicaid," said Senate Republican Leader Mitch McConnell of Kentucky. "They make solemn pledges all the time about how they won't even entertain a discussion about reform. What they don't say is that ignoring these programs is the surest way to guarantee their collapse."

There's a growing consensus among Senate Democrats and the White House that Social Security should be exempt from any deficit-reduction package. But some centrist Democrats in the Senate argue that fellow Democrats must be willing to consider cuts to Medicare and Medicaid in order to get concessions from Republicans on taxes.

"It has to be both — a significant revenue increase as well as spending cuts," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee.

Sen. Kent Conrad, D-N.D., who is retiring as chairman of the Senate Budget Committee, said rising health care costs in Medicare and Medicaid are helping to drive future spending, making them an essential part of a long-term deficit-reduction package.

"I've been part of every bipartisan group here. We've always put everything on the table," Conrad said. "If you're going to solve this problem, you're going to have to deal with where the spending is and the revenue can be raised."

But senators like Baucus and Conrad increasingly are being drowned out by other Democrats emboldened by the recent election results to fight against benefit cuts.

"I think the election spoke very strongly about the fact that the vast majority of American people don't want to cut these programs," said Sen. Tom Harkin, D-Iowa.

Further complicating the issue, some Democrats say they are willing to look for savings in programs like Medicare and Medicaid, as long as cuts don't lead to higher costs for beneficiaries. Obama's new health care law, for example, assumes more than $700 billion in Medicare savings over the next decade.

"I'm willing to look at ways of making the programs work better," Harkin said.

Congress and the White House are devoting the next three weeks to finding at least a bridge over the fiscal cliff by reducing the sudden jolt of higher taxes and spending cuts in January while laying a framework for addressing the nation's long-term financial problems next year.

Obama wants to let tax rates rise for wealthy families while sparing middle- and low-income taxpayers. Some Republican leaders, including House Speaker John Boehner of Ohio, have said they were willing to consider making the wealthy pay more by reducing their tax breaks. But most Republicans in Congress adamantly oppose raising anyone's tax rates.

Negotiations are going slowly as each side waits for the other to make concessions.

Democrats already have tried to take Social Security off the table. White House press secretary Jay Carney said this week that changes to the massive retirement and disability program should be done separately from any plan to reduce the deficit. That's the same position taken by 28 Democratic senators and independent Sen. Bernie Sanders of Vermont in a letter to fellow senators in September.

"We will oppose including Social Security cuts for future or current beneficiaries in any deficit-reduction package," said the letter, which was signed by many top Democrats, including Majority Leader Harry Reid of Nevada. In the House, Democratic leader Nancy Pelosi has taken the same position, not only on Social Security, but also on Medicare and Medicaid.

"There hasn't been the slightest suggestion about what they're going to do about the real problems, and that's entitlements," said Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee. "There's a certain cockiness that I've seen that is really astounding to me since we're basically in the same position we were before" the election.

 

Comments

DGMutley

Can't do that with all the nukes they've got.

the office cat

Kurt... "elected servant" is an oxymoron...no?

Randy_Marsh

You guys want to elect a god that all.

Kimo

What kURTje said....

coasterfan

Exit polls showed that 60% of voters believe that the 1% should pay a higher tax rate, which is another way of saying that 60% of people disagree with the Republican economic plan. Austerity is not the answer, as most leading economic experts have stated that this mindset would only force another recession. Regardless of whether or not you like Economic Stimulus, it does work, and was absolutely the right thing to do in 2008-09 (Paul Ryan thought so, anyway, since he requested federal stimulus funds for Wisconsin, saying that "it would help his state recover").

Am surprised that some conservatives are STILL acting as if they have "all the answers", when it's clear they do not. Also, can someone give them a wake-up call? Their party lost the election, which means 2 things: #1, their viewpoint is a minority viewpoint and #2, they have little leverage to force their agenda.

Am glad to see that some Republican leaders are finally waking up from their slumber, and are opposing Grover Norquist. I want MY congressman to represent me, not to pledge his/her vote (and soul) away to some special interest group like Norquist's for all eternity.

Randy_Marsh

Coaster
When you promise cash and prizes the sheep will flock to you, When the money runs out and austerity hits we will know who to blame.

coasterfan

Oh, baloney, Randy... If the money runs out, I'll blame Republicans, who refused to increase revenue, when it was so painfully obvious that more revenue was needed. Fifty years ago, the richest paid a 90% tax rate; today, they pay less than 20%. Same obligations, but we're bringing in less money, and we can thank Ronald Reagan for that.

Can't believe you swallowed the silly Romney line about Obama's "gifts of cash and prizes". As if helping out the middle class (who had been trampled on by the Bush administration) is a bad thing. Mitt, of course, could have offered the same benefits to the middle class, but he chose to appeal to the 1% instead. Only problem was that Mitt's favored 1% only made up 1% of the vote. He promised them huge tax breaks, deregulation and huge exemptions on capital gains. By your reasoning, we could call it "cash and prizes" Romney offered to millionaires.

Has there EVER been a bigger sore loser than Mitt Romney?

Darwin's choice

Coasterfan....I can't believe that your savior hasn't tapped you to be the economic advisor for the U.S. You're always correct with your hindsight! By the way, what is the national debt now?

Randy_Marsh

So tax the rich, How much does that raise? 6oo billion over 10 years, we hand that out to special interest in a year so who to tax then? Cutting your cash and prizes for campaign donors (Anyone say soylendra?) needs to be done but look at the actual debt and how much we spend (I would say budget but the obstructionist senate will not pass one)

the office cat

Ok Marsh.... what about the billions from the Kocks, the Vegas guy and others? Think about how much that could have paid down the National Deficit? And for what? Their wealth has been redistributed. Pres. Obama has four more years. Democrats have more controll in Congress - Democrats got more votes for Congress but the Gerrymander protected the Reps.

Randy_Marsh

Office cat
You obviously do not know economics. The government spends 20 billion per day. The koch brothers are worth a estimated 50 billion together. So you have run the government for 2 days? What next? Tax more billionairs and run the rich completly out of the country for what? The debt is at 16 trillion, Thats more than the whole country is worth.
http://realdealpolitics.com/blog...
worth/http://www.celebritynetworth.com...

the office cat

Coaster... who besides me realized the Norquist pledge was signed by many in 1996 when GOoPs controlled Congress?

mikel

odumbo: "we must raise taxes because our country suffers without more income. i also like to spend money very stupidly on things like:

WASHINGTON – The Obama administration provided struggling battery maker A123 Systems Inc with nearly $1 million on the day it filed for bankruptcy, the company told lawmakers investigating its government grant

Read more: http://www.foxbusiness.com/news/..."

really? are you dems that silly to think this guy knows what he is doing?

Darwin's choice
the office cat

Mikel... ya know, Mikelly MOuse, it's tiime you stopped calling the president names. It only proves you have nothing of worth to add to the conversation.. And you dare to post a fox news link - the people who predicted,.. wait a minute, I gotta stop laffing.... whew!... the people who predicted a Romney landslide?

mikel

reallyyyyyyy!!! i post that prezo has given $millions$ to a company on the day it filed for bankruptcy. people on here want to know who, how, when, where, why. so, i give them that info. maybe the SR reporters could do their jobs and provide that info!!

OMG.LOL.WT_

One of the most blatant examples of corporate welfare is the bloated system of agricultural price supports. From 1995 to 2004 the federal government provided agricultural subsidies of over $143 billion.

Another classic example of how the well-to-do fleece the taxpayers is the multiplicity of “joint ventures” between the government and big business. Projects such as sports stadiums, railroads, or even amusement parks are deemed “too big for the private sector.”

Another source of systematic welfare is the “cost-plus” method of payment. Here, the government doesn’t settle on an actual price for goods or services delivered, but rather agrees to meet the contractor’s expenses plus some markup.

The Small Business Administration (SBA) is another agency with an apparently noble mission that nonetheless acts in reverse-Robin Hood fashion. In 2005 the SBA announced that $79.6 billion in federal contracts were awarded to “small businesses.” However, according to the New York Times, some of this money went to mom-and-pop organizations such as Northrop Grumman, Boeing, Bechtel, and General Dynamics. Indeed, the Christian Science Monitor reports that almost $5 billion of the contracts classified as “small business” were for the 13 largest government contractors.

4shizzle

Obama is far better than Romney.

Randy_Marsh

You live in a alternitive universe that he is the president? How do you know? Gimmie winning lotto tickets.

4shizzle

strange

the office cat

4... see. just mention Obama and 'four more years' at the same time and they become discombulated and reduced to babble.

Randy_Marsh

He said Obama is better than Romney, How does he know if Romney never was president? Its not babble to english speaking people with common sense.

4shizzle

@ marsh

I paid attention to what Romney said, and what he did; also I paid attention to Fox News.
It was very obvious he/Fox wasn't for America but for himself and his rich, power hungry buddies.
All the fear buzz words/propaganda the GOP used to try to scare people into voting Republican such as: communism, socalism,dictatorship, were just smoke to cover the word: Plutonomy.

Randy_Marsh

@4shizzle
We live in a duopoly already, So how is Obama better? Do you know what Romney would have did? (I'll give you a hint, Romney is a progressive and would have done just as much damage as Obama is going to do)
http://www.youtube.com/watch?v=v...

4shizzle

@marsh
1.Not duopoly but plutonomy. There is a difference, right?

2."Romney is a progressive" means what? He's a RINO ?

3.And if Romney was going to do as much "damage" as Obama, shouldn't you be a Romney hater too?

Randy_Marsh

4shizzle
There is a difference, But the difference is economic. A duopoly is that you are only given 2 choices for election. A Plutonomy is where there would be more than two but they all lead to the rich, This is not the case. Yes you can say romney is a RINO, Obamacare is based off of Romney works as governor. 3. I didnt vote for Romney either, But of the two (Obama and romney) Sticking with the same guy who has done nothing but blame others for the last 4 years is ther definition of insanity according to Einstien. The guy i voted for was not invited to the debates because he made too much sense and didnt promise everything under the sun as a gimmick.

4shizzle

@Cat
It was fun to watch Karl Rove get all spastic.

The New World Czar

Why the AP gives Durbin as much airtime as they do is beyond me. He comes from the basket-case fiscal state of Illinois. What do they, California, and New York have in common besides Democrat governors and legislatures? Unsustainable debt, high unemployment, and skyrocketing public employee pension liability.

mikel

i was thinking the same thing! how can anyone of those individuals possibly right the country if they can't help their states?

the office cat

Mikel... you was thinkin'? How'd you let that happen? Just look at Texas. And Arizona. And Ohio...

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