Bowing to pressure from its left flank, the White House revealed Thursday that it won’t again propose Social Security cuts when President Obama releases his budget early next month, saying Republicans squandered chances for a deal last year.
The backtracking indicates that the administration has all but given up hope of working on a “grand bargain” to reduce deficits. White House deputy press secretary Joshua Earnest said that using the “chained” consumer price index, a measure that would reduce Social Security cost-of-living adjustments, “remains on the table” but won’t be included formally in the budget.
Liberal activists who pleaded with the White House to withdraw the proposal cheered the announcement.
“‘Chained CPI‘ is a fancy term for a bone-headed idea: Social Security benefit cuts that hurt seniors. In the wealthiest nation on earth, there is simply no excuse for more cuts that harm the most vulnerable among us,” said Anna Galland, executive director of MoveOn.org, a powerful liberal advocacy organization. “It’s great news that President Obama has decided to remove these cuts from his upcoming budget proposal.”
Republicans said the move exposes Mr. Obama’s unwillingness to negotiate on more deficit reduction.
“This reaffirms what has become all too apparent: The president has no interest in doing anything, even modest, to address our looming debt crisis,” said Brendan Buck, an aide to House Speaker John A. Boehner, Ohio Republican. “With three years left in office, it seems the president is already throwing in the towel.”
The chained CPI proposal would save the government money on Social Security and other benefit payments by using that index’s lower inflation calculation to figure cost-of-living adjustments.
Despite the uproar it caused, using chained CPI would be a relatively modest change to Social Security, some analysts say.
A year ago, it was a significant step that demonstrated that the president was prepared to confront entitlement spending.
Now, that good will is gone.
“If it’s at all possible, they’re even less serious” than they were before, said Jagadeesh Gokhale, a senior fellow at the libertarian Cato Institute who specializes in entitlement programs and reforms.
Democrats will profit politically from not having to contend with entitlement cuts proposed by the president, particularly because many of them are facing attacks over their support of Medicare reductions as part of the Affordable Care Act.
House Minority Leader Nancy Pelosi, California Democrat, said Mr. Obama offered the chained CPI proposal last year “as a gesture of good faith, yet Republican leaders were unwilling to budge or close a single unfair tax loophole, and decided to walk away from opportunities to find common ground.”
She said Democrats are still committed to trying to reach a bipartisan “responsible fiscal framework” and pointed to last year’s budget deal as a success. That deal boosted spending in 2014 and 2015 and delayed cuts until later this decade.
This month, Congress passed a bill to increase the debt ceiling and sent it to the president’s desk with little drama.