Financial cliff: Dems balk at cuts

Rep. Mike Honda, D-California, pledges to protect Medicare and Social Security from any negotiated cuts.

By Bert Eljera

LAS VEGAS – In a show of a stiffer spine following President Obama’s re-election, congressional Democrats are balking at proposed cuts to Medicare and Social Security that could complicate “financial cliff” negotiations.

A top Asian Pacific American legislator said on Thursday that gutting the entitlement programs are not necessary to put the nation’s financial house in order.

“The battle we’re currently in isn’t about dollars and cents – it’s deeply personal, and it’s about the kind of country we hope to be,” said Mike Honda, a Democrat who represents Silicon Valley in California in the U.S. House of Representatives.

“It’s about people like my 96 year old mother who rely on these programs. My mother – and millions just like her – have earned the right to retire with dignity and get medical help when they are sick. It’s as simple as that,” Honda said.

A member of the House Ways and Means Committee, Honda said he has signed a pledged with senators Bernie Sanders, Sheldon Whitehouse and Tom Larkin to protect the revered entitlement programs.

Honda’s stance echoed the sentiments of the Senate Majority leader, Harry Reid of Nevada, who practically put the entitlement programs off the table in any negotiations.

“I’ve made it very clear. I’ve told anyone that will listen, including everyone in the White House, including the president, that I am not going to be part of having Social Security as part of these talks relating to this deficit,” Reid said.

The Hufftington Post reported Reid’s comments following a White House meeting between the president and congressional leaders that included Senate Minority leader Mitch Mcconnel, House Speaker John Boehner and Minority leader Nancy Pelosi.

The so-called fiscal cliff refers to the year-end combination of expiring President George W. Bush-era tax cuts and harsh across-the-board spending cuts.

Despite the cordial initial meeting between President Obama and the leaders of Congress, contentious debates are expected with the political landscape generally considered more favorable to the president.

According to the Huffington Post, 16 months ago, when Obama negotiated with Boehner, R-Ohio, on a possible budget deal, the Republicans had the upperhand.

It was less than a year after Obama’s self-described “shellacking” in the 2010 elections and the president was desperate to win an increase in the government’s borrowing cap and avoid a government default on its debt that should shatter financial markets. Also, Obama still faced re-election in 2012.

Now conditions favor Obama, the Huffington Post reported.

At that time,  a White House draft offer by top Obama aide Rob Nabors, made public by Washington Post author Bob Woodward, proposed several controversial changes to benefit programs, including the lower inflation adjustment, raising the eligibility age for Medicare and higher Medicare premiums.

A less generous inflation measure that takes into account consumers finding alternatives when prices go up could reduce deficits by more than $200 billion over the next decade.

It also means about $70 billion more tax revenues over 10 years because automatic rises in tax brackets to account for inflation would be smaller.

That new inflation index, known as chained Consumer Price Index, is a magic elixir for budget writers but unacceptable to most Democrats.

They say that moving to the new cost-of-living measure could cut average retiree benefits by about $600 a year a decade after taking effect and mean a cut of about $1,000 a year after 20 years.

“Think about it this way. You’re standing on the deck of a boat and you’re in very deep water and they want you to swim, but they’re going to put a log chain around your ankle,” Sen. Harkin, D-Iowa, said in rally Thursday in a Senate hearing room. “That’s chained CPI.”

Follow Bert Eljera on Twitter @vegaspinoy60 and on Facebook at facebook.com/BertEljera

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One response to “Financial cliff: Dems balk at cuts

  1. Pingback: News from The Associated Press « Ye Olde Soapbox

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