Obama Social Security Cuts: Will Republicans Take the Offer?


The Republican Party should be jumping for joy right now. On Friday, the New York Times reported that President Obama would propose a budget next week that formally includes cuts to Social Security and Medicare. Making Obama have to put these cuts up in the first round of negotiations should be tremendous victory, a vindication that their demands for entitlement cuts are being heard.

Yet, Republicans are reacting to the proposal with recalcitrance. Senate Minority Leader Mitch McConnell (R-Ky.) did not release a public statement. And House Majority Leader John Boehner (R-Ohio) released a statement on Friday slamming the president for holding entitlement cuts "hostage for more tax hikes." It appears that the Republican Party may be on the verge of snatching victory from the jaws of defeat.

Obama's proposal includes $600 billion in new revenues over a decade, half of the $1.2 trillion his last offer had. But the majority of the new revenues are achieved mostly by limiting to 28% the deductions that individuals in higher tax brackets can claim. In return the Republicans get the following cuts, $400 billion from health programs, $200 billion from other programs; such as farm subsidies, federal employee retirement programs, the Postal Service, and the unemployment compensation system, changes in payment that Medicare makes to health care providers, and Chained CPI, a measure that would re-index Social Securities cost of living increases to a lower rate of inflation. The total deficit reduction of the plan would be $1.8 trillion over 10 years.

Chained CPI in particular is drawing the ire of many progressive groups, such as the Congressional Progressive Caucus who released a statement opposing the measure.

Powerful organizations such as the AARP are also opposed. David Certner, the legislative council for the group, said, "we're quite unhappy with this. We don't think Social Security should be opened up as a token as part of a budget deal."

Yet, if Speaker Boehner's words are anything to go by the proposal is dead on arrival. This is hardly good optics for the Republicans. Ever since Obama did not present a budget in February, Republicans have been harping on him to present one and to compromise on their pet issues such as entitlement cuts. Now that he has basically met them halfway, rejecting it would play into a narrative of the Republican Party being obstinate when they do not get everything they ask for.

However Republicans may have another plan. By getting Obama to somewhat propose entitlement cuts they may be able to run against him and Congressional Democrats in the 2014 midterms for … proposing cutting entitlements. A similar strategy was attempted by the Romney/Ryan campaign, which criticized Obama's plan that found $700 billion in savings and claimed they would protect and strengthen Medicare.

That strategy proved to be mostly unsuccessful and the primary plank of attack, Chained CPI, would prove difficult to distill into a sound bite. But is an option for a party who is proving to be deeply unpopular, with only 19% approving of the way Republicans in Congress are acting, according to a Quinnipiac University poll. Of course, Obama and the Democratic Party could turn this around — as a refusal to entertain the notion of a compromise plays into American's top critique of the Republican Party, an unwillingness to compromise, according to a Gallup poll.

Still, if the Republican Party actually agreed to use the proposed budget as a first draft, it would immediately put Obama on the defensive, having to fight off sections of his caucus who are opposed to entitlement cuts. The plan could fall through due to infighting on among the Democrats or Republicans would win on getting a "fiscally responsible" budget passed. The Republican Party would look like the most reasonable people in the room in either scenario. But given Speaker Boehner's reaction that is very unlikely pair of scenarios.