With momentum building to rein in record budget deficits, Democrats are sharply divided over whether to tackle popular but increasingly expensive safety-net programs for the elderly, particularly Social Security.
A growing number of Democratic lawmakers say they are willing to consider controversial measures such as raising the retirement age and reducing benefits for wealthier seniors as part of a compromise with Republicans to cut spending on the programs and stabilize them for future generations.
But senior lawmakers such as Senate Majority Leader Harry M. Reid (Nev.) and Sen. Charles E. Schumer (N.Y.) are lining up against them, arguing that tampering with Social Security would harm the elderly — as well as the political fortunes of Democrats hoping to maintain control of the White House and the Senate in 2012.
The dispute, long simmering behind the scenes, is poised to erupt into public view. Reid has scheduled a rally Monday on Capitol Hill to show “support for Social Security and opposition to cuts in benefits,” according to an e-mail sent to liberal activists. And House Democrats this week signaled their intention to use Social Security as a cudgel in next year’s elections by launching an ad campaign accusing 10 GOP lawmakers in swing districts of plotting to cut the program.
Meanwhile, Third Way, the centrist Democratic think tank, plans to release a memo Friday arguing that the deficit has emerged as an uncommonly powerful political issue and that 2012 voters will reward the party that takes bold action to restrain government spending — including overhauling Social Security, Medicare and Medicaid.
“In our view, Republicans are winning this fight,” the memo says, according to an advance copy provided to The Washington Post. “They are winning by taking on an issue that voters believe is serious; they are winning on candor; and they are winning by being on the side of reform. Democrats — who ran on change — are quickly becoming the status quo party on the budget.”
In an interview, Third Way policy director and former Schumer aide Jim Kessler said, “There’s a conventional view right now that [entitlement spending] is an issue that shouldn’t be touched within the Democratic Party, that we should wait for Republicans to act and trap them.”
“. . . Our view is, that might work in a normal time. But this isn’t a normal time,” he said. “We think it’s more dangerous politically not to be in this debate than to be in it.”
How Democrats resolve the dispute could affect not only the party’s political fortunes but also the future of talks aimed at developing a bipartisan strategy for stabilizing the national debt. With a critical vote looming later this year to raise the legal limit on government borrowing past $14.3 trillion, six senators from both parties are working to come up with a debt reduction plan that could win broad support — and Republicans consider Social Security a key part of the solution.
Social Security is the single largest federal program, dispensing about $700 billion last year to nearly 60 million people, the vast majority of them retirees. Since the program’s creation in 1935, the cost of Social Security benefits has been entirely covered by payroll taxes paid by current workers. This year, however, payroll tax revenues are projected to fall $45 billion short of covering benefits, and the problem is projected to grow as the number of retirees balloons compared with the number of working adults.
Democrats have traditionally defended the program, but even some liberal lawmakers now say changes in the benefit structure are required. Last week, 32 Senate Democrats joined 32 Senate Republicans on a letter in support of a broad-based deficit reduction effort that includes changes to entitlement programs.
One of the letter’s authors, Sen. Michael F. Bennet (D-Colo.), acknowledged that polls show people are overwhelmingly opposed to cutting Social Security and Medicare when asked about the programs individually. But, he said, they also want a plan to control spending that requires “everybody to put something on the table. . . . I am absolutely convinced if we put a comprehensive plan in front of people, they would cheer from the rooftops.”
Reid spokesman Jon Summers dismissed that argument.
“Senator Reid doesn’t believe that the budget should be balanced on the backs of America’s seniors, plain and simple,” he said.