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.




none of the states you have mentioned cat are in more dire straights than illinois and california. both of those states are in the same boat as the fed gov't and that is they will neverrrrrrrrrrr be solvent again. not even close. they all have one thing in common = they have been led down the road to total financial doom by democraps.

is this ok moderators? not to long? tried to be original. i hope this doesn't conflict with your theory.


Yes, let's look at texas with it's 15th largest economy in the world!!!


"Residents Are Fleeing High Taxes In These 5 States":

As they say in Texas: The best thing that's happened to TX is CA.




Basel III has ruled that gold is money effective 1/1/13.

" the banking world, what they say goes."

Take the hint.

Watch Japan, it's the weakest world currency and may be the first to collapse - "canary in the coal mine."


@ coasterfan:

In your personal finances: See if you can maximize borrowing and spending to make yourself wealthy.

Keynesianism as the Progs have misunderstood it is on the verge of collapse.

All ya need is one serious world crisis or black swan event to bring the whole world-wide hundreds of trillions of debt financed house of cards tumbling down.

the office cat

oooooooooooooooooooo doomsayer. And then what good will your gold be with no one to buy it?


@ the office cat:

"No one to buy it"? That makes no sense if gold is money.

So why will banks be allowed to hold gold as a Tier 1 asset?

Go ahead; put all your trust in a suicide fiat currency that has become increasingly worthless.

Remember: You will be able to trade your gold for currency, but you won't always be able to trade your worthless currency for gold.

Yea, countries NEVER go broke. LMAO!!!!


Again, not that hard: FLAT TAX. Lower the rates, and make ZERO exceptions. Income gets taxed the same as capital gains gets taxed the same as dividends gets taxed the same as winnings, etc. and so on. Income would go up; income TAXES would go down. There, now how fair is THAT? So why, pray tell, are those weeping about "fairness" not interested in truly simple, comprehensive, and FAIR tax reform? It's because they're not interested in "fair." They're interested in redistribution. The end.


well said!

the office cat

Oh Samantha. That's just what the Kocks and Sheldon and the Donald are thinkin' after the redistribution of their wealth.
FLAT TAX. Only works if Contango has to report all his gold and all those offshore monies also are reported. Ya see, that's always been the problem. If all that offshore money was taxed - even at the current Bush rates - there wouldn't be an income/revenue problem. The only way 99% of Americans can put their money offshore is to toss it in the ocean or Lake Erie.


@ the office cat:

By law, my investment firms annually report the value of all my investments to the govt. and they've done so for yrs.

Keep spewing the personal financial ignorance of the Progs.


@ SA:

Ain't gonna happen. The Progs like progressive tax rates and using the tax code for social engineering.

The Dims won't quit spending and the Repukes don't have the political will to stop 'em. It can only end one way.

There are still idiots in Russia who celebrate and long for Stalin every May Day.

They "won," ya know? The kids wanted more ice cream and candy for dinner.

IMO, protect yourself financially as best you can. For one: Little to no debt.


Sadly, you're right on every single point...

I'm not sure what will protect ANY of us financially, at least not for long. Little to no debt is never a bad idea, of course, no matter the economy. But even if you owe nothing, that's not going to pay all of those higher (in some cases, MUCH higher) bills that are going to be coming due! Between the fed printing money like it's paper (and soon to be valued just about the same) and exorbitant spending (like "Obamacare"), almost all of us are about to be thoroughly scr3wed. And that includes those currently living off the labor of the rest of us! What happens to their checks when even fewer of us can afford to pay taxes, hmmmmm?

Four more years...hah. We'll be lucky if we have ONE.

Randy_Marsh Now they want to get rid of the debt limit. If there is no debt limit why pay taxes, They can just print more?


The next potential sub-prime crisis? Student loan debt. No credit check needed - free money!!!!

Mr. Obama had the govt. take over lending in 2010. Now at $1T USD outstanding.

"Payments on 11% of student-loan balances were 90 or more days behind at the end of September, up from 8.9% at the end of June, a rate that now exceeds that for credit cards."

Got your financial Maalox ready?


Thats Obamacare for you, Creating Ulcers for students and economic advisors everywhere.

the office cat

youse guys is so funny!!! Many of you cited voting for Obamney and said it wouldn't be any different no matter who won.
Idea for ya! Serve Christmas dinner in a homeless shelter. Better yet, leave all your credit cards and cash and stuff in someone's custody and go spend a week sleeping on and walking the streets. Try hopelessness on for size... it'll be good practice for the 'great fall' you predict arrives. Karma cometh. Got those pockets installed in your casket yet?


Office cat
Why dont YOU redistribute YOUR wealth? Put your money where your mouth is.


@ the office cat:

So there'll NEVER be another severe economic depression? Keep the faith; believe in the magic of Mr. Obama. LMAO!!!


OCat I did spend my Thanksgiving serving dinners to the needy and I did send my kids a letter advising that I do not need anything for Christmas and I do feel blessed that my kids all have worked hard and have no needs also. For that reason I did send the letter to my kids a letter advising that this year they will receive a really nice Christmas card and my love but no gifts as I will be giving what I normally spend on gifts to charity and in they personally knew of a family that was in need I would send them an anonymous gift or pre paid debit card and requested in lieu of any gifts for me that they do the same.

the office cat

Let's get this buggy over the cliff!!!!
Then put 12 behind us and move into lucky 13 with a more sensible Congress and the realization we can restore necessary military cuts, reinstate SS Medicare Medicaid before any checks even have to be written and before the paperwork can be done to reduce the benefits.
We can set about on serious reform of taxes, programs and the military.
We can move forward with sensible cuts on middle class taxes.
And Obamacare is the law of the land and seniors continue benefittin as they have already - as well as growing realization of the greatness of the act.
Most importantly, 18 states will repay the federal government all they owe for infrastructure, disaster relief, etc. and then secede to become Mississippi with Romney as president.
Ah yes. GIDDYUP!!!


@ the office cat:

So who's buying all the trillions of dollars more of Treasury debt of this Brave New World you've designed; the Federal Reserve?

Love the magical Obamanomics. LMAO!!!


putty tat says - "reinstate SS Medicare Medicaid" your messiah has again asked congress to extend the cuts to social security payroll tax. ??? in case he is not smart enough to realize that this is already underfunded and this will be the third year that he wants to suspend payroll taxes to that fund. this guy does not have any idea how to run a financial entity. already broke so you want to stop making payments?


Mr. Obama is not dealing in good faith. He wants $1.6T in tax increases, $50B in new spending and the power to raise the debt ceiling without Congressional approval.

Spending cuts will come partially by way of paying Medicare providers like doctors and hospitals less.

Reads like Mr. Obama wants to see a fiscal crisis in order to help collapse the economy.

Got gold?

The Big Dog's back

Fascists just can stand it when Progressives improve the economy. Backwards, Fascists.


Agree with Randy, how can the senate vote to raise taxes when they have failed miserably to produce a budget!! When I was working and had a cash flow problem, I didn't demand my boss pay me more, I cut back on my spending!!!


It seems NO ONE wants to discuss the welfare for the rich.
Just cut Medicare and SS and we will all be fine.


The rich NEED more money to send to Swiss banks and the Caymen Islands.


Hey liberal bots, you're on the wrong website, your savior wants you on twitter and you tube.

The Big Dog's back

Psssst, goof. The election is over, no need for right wing propaganda.