Obama Deal on Social Security and Debt Could Spur Dem Revolt

The White House may be on the verge of an historic deal, but it will have to convince its own party.


After news broke that the White House is contemplating a possible deal including Social Security cuts, reaction was swift and angry on Capitol Hill. House Democratic leaders made clear that they're opposed to cuts to the Medicare or Social Security, and some progressive rank and file lawmakers began to prepare a revolt.

[Read how both sides are playing their cards in the debt fight.]

The House Progressive Caucus, lead by Arizona Rep. Raul Grijalva began to circulate a letter promising to oppose "ideologically driven" cuts to the social programs. For many Congressional Democrats, it's not just the idea of cutting Social Security that's difficult to tolerate. It's the idea of cutting Social Security as a part of an overall deficit reduction plan, rather than dealing with it as its own self-funding program. Although actuaries worry about the long-term solvency of the program, its trust fund is currently in good shape, especially when compared with the rest of the federal government. "In fact, Social Security, which is perhaps the most successful federal program in the history of our country, has not contributed one penny to our deficit or our national debt," independent Vermont Sen. Bernie Sanders said on the Senate floor, in reaction to the news that Social Security cuts might be in the mix. House Minority Leader Nancy Pelosi said that Social Security cuts "should be on their own table," not part of a broader discussion.

While some liberal lawmakers are fuming, other Democrats are waiting to see how any possible Social Security cuts will play in the overall package. Although no particulars have leaked yet, one strong possibility is an adjustment to the cost-of-living index, which would slowly slice benefits for Social Security recipients while also slowly raising income taxes. That proposal, while still controversial, has a chance of passage, especially if lawmakers follow the lead of the president's fiscal commission and pair a cost-of-living decrease with increased benefits for poor and older recipients.

[Read how the debt ceiling issue reveals a chamber-GOP rift.]

Social Security has long enjoyed an image as a politically untouchable program. It's an accurate, but incomplete picture. True, past attempts at privatizing or significantly altering Social Security have ended in failure. But lawmakers have reached compromises to extend the life of the program, including overhauls made in 1983, some of which are still taking effect today. While the mood seems much more partisan today than in decades past, there is a growing sense in Washington that some type of bipartisan deal might be possible.

After lawmakers left the White House meeting today, it wasn't clear they were any further to a deal than when they entered it. Obama said that the meeting was "very constructive," but didn't elaborate on what was discussed. The parties returned to their talking points swiftly after they were over, with Democratic Congressional leaders vowing not to cut benefits for Social Security or Medicare. According to sources with knowledge of the negotiations, the discussions at the White House today still haven't settled on specifics, but rather are focused on identifying the size of a potential deal. Lawmakers are looking at a compromise package that cuts anywhere from $2 trillion to $4 trillion off of the national debt over the next 10 years, with President Obama refusing to sign anything that doesn't extend the debt ceiling past the 2012 election. But reaching those numbers would require some cuts to mandatory spending programs such as Social Security or Medicare—if Congress can stomach them.