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Debt Lock: Will Obama Make Cuts to Social Security and Medicare?

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As President Obama tries to broker a compromise budget deal that would allow Congress to raise the national debt ceiling before an August 2 deadline, he may appease Republicans by cutting funding for Medicare and Social Security. Congressional Democrats say they have ruled out any gutting of Social Security, but there are concerns the cuts could still be achieved through a backhanded approach. Retiree benefits are set by the Consumer Price Index, which is used to calculate cost-of-living benefits. Obama and top Democrats have left open the possibility of readjusting the CPI, which could effectively amount to a cut for Social Security recipients. For more on this debate, we speak with Rep. Raúl Grijalva (D-Ariz.), co-chair of the Congressional Progressive Caucus, which has sent President Obama a letter calling for the protection of Social Security and Medicare under any deficit deal. “It has nothing to do with a fiscal policy,” Grijalva says. “It has to do with ideological positions on social programs and domestic programs and how you dismantle and get rid of them. That’s the agenda. I think the American people see through this smoke and mirror.” [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: Bipartisan talks continue at the White House today as President Obama seeks to broker a compromise budget deal that would allow Congress to raise the national debt ceiling. The U.S. is facing an August 2nd deadline to keep up with its debt payments and avoid a massive default that would further weaken the struggling economy. Lawmakers met with Obama Monday with no apparent breakthroughs.

Until last week, the debate mostly centered on Republicans’ opposition to Democratic calls for increased taxes on businesses and wealthy households, as well as Democrats’ rejection of Republican demands for massive spending cuts. But in recent days a new debate has opened up within the Democratic camp. To appease Republicans, President Obama has reportedly floated the idea of cutting benefits under entitlement programs such as Medicare and Social Security.

Speaking to the Washington Post, a Democratic Party official said, quote, “Obviously, there will be some Democrats who don’t believe we need to do entitlement reform. But there seems to be some hunger to do something of some significance. These moments come along at most once a decade. And it would be a real mistake if we let it pass us by,” he’s quoted as saying.

At a White House news conference Monday, President Obama ruled out any short-term measures, insisting he’s seeking a far-reaching deal. To achieve that goal, Obama also said he’s prepared to take on dissenters in his own party who oppose cuts to entitlement programs.

PRESIDENT BARACK OBAMA: All of us agree that we should use this opportunity to do something meaningful on debt and deficits. And the reports that have been out there have been largely accurate that Speaker Boehner and myself had been in a series of conversations about doing the biggest deal possible so that we could actually resolve our debt and our deficit challenge for a long stretch of time. And I want to say I appreciate Speaker Boehner’s good-faith efforts on that front. What I emphasized to the broader group of congressional leaders yesterday is now is the time to deal with these issues. If not now, when?

AMY GOODMAN: Congressional Democrats say they’ve ruled out any gutting of Social Security, but there are concerns the cuts could still be achieved through a backhanded approach. Retiree benefits are set by the Consumer Price Index, or CPI, which is used to calculate cost-of-living benefits. President Obama and top Democrats have left open the possibility of readjusting the CPI, which could effectively amount to a cut for Social Security recipients.

For more, we go now to Washington, D.C., where we’re joined by Congress Member Raúl Grijalva, a Democrat of Arizona, co-chair of the Congressional Progressive Caucus, which has sent President Obama a letter calling for the protection of Social Security and Medicare under any deficit deal.

Congress Member Grijalva, President Obama is weighing cutting Social Security and Medicare. How are you weighing in?

REP. RAÚL GRIJALVA: Well, it’s the wrong premise, so, unfortunately, these whole negotiations, if one can call them that, began with the premise that Social Security, Medicare and Medicaid were going to be cut, that they were going to be altered in some way that is going to cut benefits to recipients. And so, you begin with that premise, and then you have the discussion about the outcome. Many things, many things.

You know, when we submitted our budget to Congress in the Progressive Caucus, we had a $5.6 trillion deficit reduction over 10 years in that budget, and we did it in areas that did not hurt the American people: the military; the war; a public option in healthcare; purchasing pharmaceuticals in bulk, that Medicare should do and save billions of dollars; closing all those tax loopholes; getting rid of the subsidies; rolling back the breaks that we’ve given to corporations; and rolling back the Bush tax cuts for the upper two percent. That’s how we would get to our point. But none of that is being talked about. It’s considered sacrosanct for some reason.

And yet, the elderly, the working poor and the poor are now being asked to carry the burden. Whether the manipulation of CPI was a manipulation of raising the retirement age, it’s still a cut in benefits, and it’s still going to affect people. And that burden has been carried too long. For 10 years, the [inaudible] people have carried this burden.

AMY GOODMAN: I wanted to read for you a comment of House Minority Leader Nancy Pelosi, your leader, who has also refused to rule out the prospect of adjusting the Consumer Price Index and in turn lowering benefits for retirees. At a news conference following a meeting with President Obama last Thursday, Pelosi failed to directly answer whether adjusting the CPI is on the table. She also acknowledged she hadn’t told President Obama that Democrats unequivocally oppose Social Security cuts. She said, quote, “If there is a table that Social Security is on, it’s on the table, and any saving should be plowed back into making Social Security strong, and the same applies to Medicare as well.” Do you agree with her?

REP. RAÚL GRIJALVA: No, I think that the premise has to be—the premise for many of us in the Democratic Caucus, and certainly the Progressive Caucus, is: Social Security did not create this deficit problem. In fact, we’ve borrowed from the trust fund to help offset other costs, military and otherwise, so there is a debt owed to Social Security. If we want to make it solvent beyond the next 25 years, which there is enough right now to keep it solvent for 25 years and keep all benefits equal, then let’s talk about that separate from this deficit and debt discussions. How do we strengthen it? How do we make it a stronger program? How do we restructure, let’s say, the income tax, that could again create billions of dollars of Social Security? People at a higher income should probably pay more into Social Security. Those kinds of restructuring issues that makes the system fairer and makes it stronger, we’re all for. But to put that on the table as part of the negotiations, as I’ve said earlier, you begin with the wrong premise. You begin with the premise that there is fault and that there is a reason, that these programs are the reason why we’re in the mess that we’re in, and that’s absolutely not true. So, I think it’s a self-fulfilling prophecy. We keep talking about Social Security as the cause, and now it’s being discussed here, with more earnest, as one of the mechanisms to deal with this deficit and the debt.

AMY GOODMAN: Congress Member Grijalva, a lot of progressives feel that the Progressive Caucus, which is the largest caucus—many people may not realize—in the House, will make a lot of noise but ultimately back the President, using the example of the healthcare debate, saying that they would not support, you know, any kind of healthcare plan without a robust public option, then ultimately caving, fearing that that’s exactly what even the Progressive Caucus will do when it comes down to this, cutting Medicare and Social Security.

REP. RAÚL GRIJALVA: I understand that and what happened with the public option and the disappointment that was created, but, you know, we’ve been doing—I think we’ve reached the tipping point on the damage control. The argument has always been, when there’s a compromise, whether it’s the healthcare, the Bush tax cuts, etc., extending those, that we’re going to do this because we’re avoiding worse damage. I think we reached the tipping point. I think the scrutiny of the American people, the opposition of the American people to these cuts in benefits in Social Security or Medicare or Medicaid is very, very strong. And I believe that the Progressive Caucus has an opportunity to stick together. I, for one, certainly the leadership of the caucus, is going to stick to what we’ve said, that if it’s on the table, there is cuts in benefits, reductions in benefits for recipients on any of those programs, then we are not going to support any deal.

AMY GOODMAN: Independent Senator Bernie Sanders, who caucuses with the Democrats, has been the most vocal critic of proposals to cut Social Security. He spoke on the Senate floor last week.

SEN. BERNIE SANDERS: We of course need a vigorous debate about how we deal with the deficit crisis and our national debt, but Social Security, independently funded with a $2.6 trillion surplus, having not contributed one nickel to the national debt, should not be part of that debate.

AMY GOODMAN: Congress Member Raúl Grijalva, your response?

REP. RAÚL GRIJALVA: I can’t and I couldn’t say it better. I think Senator Sanders has been great throughout this whole debate on the deficit. Many of us, and certainly the senator, calling for looking at revenue generation that for some reason the Republicans have said we’re not going to touch it. And I don’t know why we’re acquiescing and not putting before the American people the real choices that are before them: to roll back those tax breaks, to really cut the subsidies for corporations, create the revenue that is going to strengthen programs and still allow us to invest in a real jobs program. That is the issue. If we don’t create jobs and the government doesn’t intervene in job creation, then this quagmire that we’re in economically is going to continue and get worse.

AMY GOODMAN: This is House Speaker John Boehner.

SPEAKER JOHN BOEHNER: The President continues to insist on raising taxes, and they’re just not serious enough about fundamental entitlement reform to solve the problem for the near to intermediate future. I want to get there. I want to do what I think is in the right interest—the best interest of the country. But it takes two to tango. And they’re not there yet.

AMY GOODMAN: That was House Speaker John Boehner. John Boehner seemed to be reaching a deal with President Obama, once Obama said he would be cutting Medicare and Social Security, but then, clearly, other members in the Republican Party pushed him, and at the latest meeting between Republicans and President Obama, it was Eric Cantor who was in the lead, not John Boehner, who was quieter. Congress Member Grijalva?

REP. RAÚL GRIJALVA: I think it’s been a bait and switch on the part of the Speaker, proposing something and then—and the fact that he cannot control the extreme branch of his party and his caucus, which is the majority, that really one could decimate these programs. Their issue is not a fiscal issue. And I’m sorry that the Speaker has given in to that ideology. It has nothing to do with a fiscal policy. It has to do with ideological positions on social programs and domestic programs and how you dismantle and get rid of them. That’s the agenda. I think the American people see through this smoke and mirror. And hopefully, a majority of the Democratic Caucus, and certainly the senators, will stand up to this, because otherwise every fundamental thing that we as a nation have built up over the course of five decades is jeopardized, and it’s jeopardized beginning with Social Security.

AMY GOODMAN: Finally, Congress Member Grijalva, I think a lot of people across the political spectrum are wondering why the issue of war isn’t raised more, not only because what it’s doing to young men and women, and not-so-young men and women, in Afghanistan, Pakistan and Iraq, but what it is doing to our economy. Given the rising dissent in this country around war, Republican and Democrat, why isn’t this front and center, even in these talks, cutting the Pentagon?

REP. RAÚL GRIJALVA: Look, I think that the interests, the very limited interests, whether it is the insurance company, whether it’s the banking institutions, and whether it’s the military-industrial complex, have enormous leverage and weight, because of the contributions they make to members of Congress. And the consequence is that those issues then are not dealt with [inaudible] side. And you’re absolutely right. The opposition to these wars that demand that we get out of there and not only save young men and women, but also fiscally be more responsible and save that, to be able to reinvest in our people here in this country, is very, very strong across the nation. Why it is not being talked up as a technique to bring us to some sort of fiscal sanity is, I think, the inordinate and the strong influence of that lobby.

AMY GOODMAN: And finally, unemployment up again, now at 9.2 percent, but in minority communities—I mean, in African-American communities, we’re talking about 30 percent, we’re talking as high as 50 percent, and even higher in some areas.

REP. RAÚL GRIJALVA: Yeah, I have a county, Yuma, that leads the nation with an unemployment rate, that’s in my district, of 27.9, probably approaching 30 percent now. And in poor areas and communities of color, that percentage is triple what the national average, if not more. And that’s where the hurt is going on. And we have not intervened in creating a real job program. I had some—I had trouble with that stimulus bill that I voted against, because it invested nothing in real job creation. 'Til the government becomes part of that, we're going to have this problem. And, you know, we’re doing the same fiscal policy that we’ve done for 10 years—trickle down, we give the tax breaks, that’ll be the job creators. We have 10 years of no job growth in this country. And we’ve lost two million jobs since the year 2000, and we’ve added 30 million extra people to the population of this nation. That equation is wrong, and that equation is going—it foretells tougher economic times. Government needs to intervene. It needs to create public works jobs and needs the people [inaudible] put to work.

AMY GOODMAN: Congress Member Grijalva, I want to thank you for being with us, co-chair of the Congressional Progressive Caucus, represents Arizona.

REP. RAÚL GRIJALVA: My pleasure, as always. Bye-bye.

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