Obama Appears to Have Abandoned the Idea of Cutting Social Security — For Now
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A progressive political victory emerged in Washington in the fight over future funding of Social Security on Thursday, as news reports said President Obama will not propose using a new and stingier cost-of-living adjustment (COLA) formula that would cut future benefits when presenting his 2015 federal budget.
“The White House says President Barack Obama’s upcoming budget proposal will not include his past offer to accept lowered cost-of-living increases in Social Security and other benefit programs,” the Associated Press reported. “Those had been a central component of his long-term debt-reduction strategy.”
The AP report, later confirmed by the White House, is the latest twist in what has been a week of contradictory signals from top White House officials who said that Obama was still open to reductions in future Social Security benefits as part of a major budget deal with Republicans.
"This offer from the President remains on the table, Deputy Press Secretary Josh Ernest said Thursday, who went on to explain that the stingier COLA was not in the White House's proposed 2015 budget because Republicans never made a serious offer to end tax breaks for the rich.
"The President is not going to be in a position where he is going to ask senior citizens and middle-class families to make sacrifices in pursuit of reducing the deficit and not ask the wealthy and well-connected to make some sacrifices, too; that it’s just not fair and it’s not good policy," he said.
But the White House spokesman said that Obama was still open to future Social Security cuts if the Republicans got serious about closing tax loopholes. "If Republicans hearing this exchange are thinking to themselves, well, you know what, that makes a lot of sense, maybe I should call the White House and say, 'Hey, look, I’m willing to close some tax loopholes if you’re willing to put some entitlement reform changes on the table,' then I would encourage those Republicans to call the White House right now. I’m sure we can set up a meeting and we can have a conversation about that. But that offer has been on the table for more than a year and we have not seen any constructive engagement from the other side."
The AP report prompted many progressive advocacy groups to issue press releases calling it "welcome news" and declare victory.
"We are thrilled," said Richard Fiesta, Executive Director of the Alliance for Retired Americans. "Our voices were heard. Nationwide, grassroots actions and people-powered politics worked. We applaud the President for doing the right thing: listening and keeping this unjust cut out of his budget proposal. A negotiating tactic or not, cuts to Social Security’s earned benefits will only serve to increase income inequality and hurt the most vulnerable members of our society."
In recent days, a groundswell of opposition has arisen in anticipation that Obama would include the so-called chained CPI in his fiscal year 2015 budget. Sixteen U.S. senators and 117 representatives have signed letters urging him to drop the proposal. Advocacy groups launched e-mail campaigns and were ramping up pressure Thursday morning—when the AP report broke.
The chained CPI would lower Social Security benefits by 6.5 percent over 20 years, the National Women’s Law Center found, saying that equals 16 weeks of lost groceries for a single 85-year-old woman.
Since the mid-1980s, Congress has repeatedly cut back spending on Social Security by proactively instituting stingier cost-of-living formulas. Last fall, economist Dean Baker testified in Congress that benefits for retirees, averaging $1,290 a month in 2014, would be more than 25 percent higher without these cutbacks since 1983. In January, Congress similarly cut back future increases to veterans’ pensions.