Will President Obama Betray Senate Democrats in State of the Union Speech?

Senate Majority Leader Harry Reid has ruled out Social Security cuts in any plan to replace the sequester. In the State of the Union address, President Obama can either stand with Harry Reid and Senate Democrats–or betray them.

Democrats’ disagreement over cutting Social Security is finally coming to a head. On Friday, Leader Reid and Senate Democrats drew their line in the sand against cuts to Social Security and cuts to Medicare beneficiaries (not providers). Senator Sherrod Brown told Greg Sargent of the Washington Post that Reid assured the Democratic Caucus that “there would be no cuts to entitlement benefits in the offer.” Lest the stance be viewed merely as a bargaining position, Brown insisted that a final deal would not include “benefits cuts.”

President Obama, on the other hand, remains willing to offer the chained CPI Social Security cut as part of a Grand Bargain with Republicans. President Obama’s spokesman Jay Carney confirmed the President’s openness to the chained CPI once again at a press conference on Monday.

Thus on the eve of the State of the Union address, the question is: Will the President take on Leader Reid and Senate Democrats to pass the chained CPI? It is hard to imagine that Senate Democrats will fold immediately after publicly announcing their firm opposition to Social Security cuts.

The State of the Union is a great opportunity to clear the air. If the President feels the need to feign openness to Social Security cuts to outmaneuver Republicans, he should still say the chained CPI is cruel, unfair and inaccurate. He should say how much he opposes it, and that the Republicans will have to force him to give it up if they really want it.

Like many progressives, however, I’m not holding my breath. The President has brought chained CPI back from the dead too many times for him to backpedal now. He is apparently really committed to it as part of a Grand Bargain.

It’s a shame though. A fight with Senate Democrats will mean spending a lot of political capital on a really bad policy. After all, the chained CPI is a benefit cut that cuts more every year a person receives benefits, hitting Social Security beneficiaries in late old age the hardest. According to 300 economists and social insurance experts, it is also a less accurate measure of inflation for seniors and people with disabilities who cannot substitute for cheaper goods as easily. Even the centrist Josh Barro of Bloomberg View, and the conservative Andrew Biggs of the American Enterprise Institute, have disavowed it.

2013-02-12-ChainedCPIGraph.png

Graph courtesy of Social Security Works.* In addition to my work at Take Action News, I am Policy Director of Social Security Works. Nothing here reflects that organization’s views)

Besides, to pass the chained CPI, the President wouldn’t just be taking on Senate Democrats and his base: He’d be facing down huge swaths of the American public. The public opposes the chained CPI by a margin of nearly 2-to-1. The interest groups opposing it include not only the AFL-CIO and the AARP, but veterans groups like the Iraq and Afghanistan Veterans of America and the Veterans of Foreign Wars.

Nor is the President likely to get much cover from Republicans once the ink is dry. Republicans have figured out how unpopular austerity is and have modified their messaging accordingly. The quintessential example is House Majority Leader Eric Cantor, who can barely speak publicly these days without saying “economic growth.” The most specific spending cuts Cantor proposed in his “Making Life Work” policy speech this past week were to social science research. Cantor didn’t mention Social Security at all, and his prescriptions for Medicare were extremely vague–a far cry from the Ryan budget.

It is not hard to see Republicans hanging the chained CPI around the President’s neck, or even attacking him for it disingenuously as they did with Medicare in 2010.

I will be happy for President Obama to prove me wrong and come out strongly against the chained CPI in the State of the Union address.

For now, though, our last best hope lies with Senate Democrats and Harry Reid. Reid has a populist streak and deep love of Social Security, which he once called the “greatest social program since the fishes and the loaves.” He threw a last-minute chained CPI offer into his fireplace during December’s fiscal cliff negotiations, and prior to that had signed a letter with 28 other members of the Senate Democratic Caucus insisting that Social Security be kept out of debt talks.

We need to show Senate Democrats we stand with them and will have their back if they stop the chained CPI–in whatever way they can.

Ironically, thanks to Reid, it is still very easy for one senator to stop a bill from coming to the Senate floor for a vote. Getting Democrats to filibuster a bill that included the chained CPI would be unusual, but for once, it might be appropriate.

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