WASHINGTON — Democratic lawmakers mostly fell in line yesterday behind President Obama’s proposal to cut Social Security payments as part of a fiscal-cliff deal, despite outrage from the party’s liberal base.
Obama’s offer to change the method of calculating annual cost-of-living adjustments for federal benefits would reduce Social Security checks by about 0.3 percent a year, according to the Center for Economic and Policy Research, a liberal think tank.
“This loss would be cumulative through time so that after 10 years, the cut would be roughly 3 percent, after 20 years 6 percent,” fumed Dean Baker, the director of the center. “These benefits average less than $15,000 a year.”
AARP estimated the change would snatch $112 billion out of seniors’ pockets over the next 10 years.
“We understand the president is at the negotiating table,” said Rep. Joe Crowley (D-Queens). “We also know these [deals] can be difficult and not everything we want will be in the bill and not everything they want will be in the bill.”
Senate Majority Leader Harry Reid (D-Nev.), who previously said Social Security should be off the table, vouched for Obama’s negotiating position.
“I admire and appreciate very much the president showing the American people how reasonable he’s trying to be: significant tax increases, significant cuts,” Reid said.
Democrats’ sudden warming to Social Security reforms is a sign that a deal could be near.
Annual increases in Social Security benefits are currently indexed to the consumer price index (CPI), which measures the change in prices of consumer goods.
Under the proposed deal, the benefits would be indexed to the so-called chained consumer price index (CCPI), which takes into account how consumer buying habits change in response to rising prices and therefore reflects a slightly lower rate of inflation.
Obama and House Speaker John Boehner (R-Ohio) are locked in tough negotiations but have slowly moved toward a debt-cutting deal.
If they fail, automatic tax hikes for every American and deep spending cuts, mostly to the military, will take effect on Jan. 1. Economists predict it would trigger a recession.
Obama’s latest offer included tax hikes for those earning more than $400,000 a year and spending cuts, including to Social Security.
Boehner offered a plan to block tax hikes for all but those making more than $1 million a year.A vote on the bill could come as soon as today.
He described it as a backup plan in case a broader deal can’t be struck in time.
“It’s important that we protect as many American taxpayers as we can,” said Boehner.
Obama immediately rejected it.
Democrats ‘caving’ on Social Security
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Democrats ‘caving’ on Social Security
