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As Rumors of 'Grand Bargain' Cuts to Medicare Swirl, Progressives in Congress Say No Way

Progressive caucus leader: Medicare, Medicaid and Social Security shouldn't be cut.

In a story already making waves across Washington, Politico’s Jim VandeHei and Mike Allen  reported this morning that a bipartisan “grand bargain” is emerging from talks between the White House and Republicans. The contours of the deal are this: About $1.2 trillion in new tax revenue, mostly likely from an rate increase on income over $250,000, along with at least $400 billion over 10 years in entitlement cuts “and perhaps a lot more,” mostly from Medicare.

Liberals have drawn a hardline against entitlement cuts and $400 billion is a lot of money, so some progressives are not pleased with the idea.

Democratic Rep. Keith Ellison, the chairman of the 77-member Progressive Caucus, told Salon that his members would not support entitlement cuts. “Any agreement to meet our end-of-the-year deadlines will need a large portion of the House Democratic Caucus to pass. Progressives will not support any deal that cuts benefits for families and seniors who rely on Medicare, Medicaid and Social Security to put food on the table or cover their health costs,” he said.

Outside groups took an even tougher line.

“If this report in Politico is correct, then some ‘senior Democrats’ are sorely misguided about where their base stands. So let me be crystal clear. Any benefit cuts in Medicare, Medicaid, or Social Security, including raising the retirement or eligibility age, are absolutely unacceptable,” Ilya Sheyman, the campaign director at told Salon. “More than 80 percent of MoveOn’s seven million members say they want us to fight a deal that cuts those benefits, even if it also ends all of the Bush tax cuts for the top 2 percent. And that’s a mainstream position everywhere except in the lobbyist-cash-infused DC cocktail circuit,” Sheyman continued.

There will be consequences, he warned, for Democrats who support a deal that cuts entitlements. “Bottom line: Any Democrat who votes to cut Medicare, Medicaid, or Social Security benefits does so at his or her own peril, and shouldn’t be in the least bit surprised to be held accountable by MoveOn members in the next primary election.”

However, there’s a important caveat that missing from the deal described by Politico. While Ellison and progressives have said they oppose benefit cuts, they’re open to  other means of cutting costs in entitlement programs. “There are better options that protect seniors, children and disabled Americans,” Ellison said, citing the elimination of the  income cap on Social Security taxes or letting Medicare negotiate drug prices with pharmaceutical companies, something Illinois Democratic Sen. Dick Durbin also floated yesterday.

The details of the cuts in the Politico article were vague, and it’s unclear if they represents real cuts to benefits or not. “That’s a crucial distinction,” said Adam Green, the co-founder of the Progressive Change Campaign Committee. “What’s worried some about the Politico article is that it kind of tossed in reforms or efficiencies along with talk about raising the Medicare retirement age or adjusting the cost of living adjustment — those two things would essentially start a nuclear war on the left,” Green said. “Those are the two big things. Those are benefit cuts. Those actively hurt seniors.”

But Green said he was encouraged by Durbin’s speech yesterday, and he doesn’t think raising the retirement age is a real possibility. The cost of living adjustment is another matter.

That is wonky, but important and represents a shift of billions of dollars, so stick with us. Basically it comes down to how you calculate the cost of living adjustment (COLA), which is meant to ensure benefits keep pace with inflation. Inflation is measured by looking at the change in the price of a basket of common consumer goods, which creates a measure called the Consumer Price Index (CPI).

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