Will The AFL-CIO Really Support Primaries Against Democrats Who Try To Help Obama And Boehner Cut Social Security Benefits?

Progressives like Pennsylvania state Senator Daylin Leach, who's running for the open PA-13 congressional seat, is never going to sell out Social Security, Medicare or any social insurance policies for middle and working-class American families. In fact, his record in the legislature makes it clear that he will fight to expand and strengthen them. Watch his new video above-- and then consider helping him win his crowded primary against a bunch of conservative Democrats. And conservative Democrats are almost as eager as Republicans to cut benefits for Social Security and Medicare recipients. The whole key is to detach tampering with Social Security to the political Third Rail it's been since the GOP ran on repealing it in 1936 and wound up winning 2 states in the presidential election, 88 House seats and with a total of 16 Senate seats. Obama has been completely complicit in that decoupling campaign-- and he's still up to it.

Instead of advocating eliminating or raising the cap, Obama and other economically conservative Democrats-- basically the New Dems, Blue Dogs and fellow travelers-- are pushing the disastrous GOP idea of Chained CPI-- cutting benefits to needy seniors. In his speech Thursday about how Congress ended the government shutdown, he quickly pivoted to the Grand Bargain he and Boehner have long wanted to force down Congress' throats, cutting Social Security benefits.

But to all my friends in Congress, understand that how business is done in this town has to change. Because we've all got a lot of work to do on behalf of the American people-- and that includes the hard work of regaining their trust. Our system of self-government doesn’t function without it. And now that the government is reopened, and this threat to our economy is removed, all of us need to stop focusing on the lobbyists and the bloggers and the talking heads on radio and the professional activists who profit from conflict, and focus on what the majority of Americans sent us here to do, and that’s grow this economy; create good jobs; strengthen the middle class; educate our kids; lay the foundation for broad-based prosperity and get our fiscal house in order for the long haul. That’s why we're here. That should be our focus.

Now, that won't be easy. We all know that we have divided government right now. There's a lot of noise out there, and the pressure from the extremes affect how a lot of members of Congress see the day-to-day work that’s supposed to be done here. And let's face it, the American people don’t see every issue the same way.  But that doesn’t mean we can't make progress. And when we disagree, we don’t have to suggest that the other side doesn’t love this country or believe in free enterprise, or all the other rhetoric that seems to get worse every single year. If we disagree on something, we can move on and focus on the things we agree on, and get some stuff done.

Let me be specific about three places where I believe we can make progress right now. First, in the coming days and weeks, we should sit down and pursue a balanced approach to a responsible budget, a budget that grows our economy faster and shrinks our long-term deficits further.

At the beginning of this year, that’s what both Democrats and Republicans committed to doing. The Senate passed a budget; House passed a budget; they were supposed to come together and negotiate. And had one side not decided to pursue a strategy of brinksmanship, each side could have gotten together and figured out, how do we shape a budget that provides certainty to businesses and people who rely on government, provides certainty to investors in our economy, and we’d be growing faster right now.

Now, the good news is the legislation I signed yesterday now requires Congress to do exactly that-- what it could have been doing all along.

And we shouldn’t approach this process of creating a budget as an ideological exercise-- just cutting for the sake of cutting. The issue is not growth versus fiscal responsibility-- we need both. We need a budget that deals with the issues that most Americans are focused on: creating more good jobs that pay better wages.

And remember, the deficit is getting smaller, not bigger. It’s going down faster than it has in the last 50 years. The challenges we have right now are not short-term deficits; it’s the long-term obligations that we have around things like Medicare and Social Security. We want to make sure those are there for future generations.

So the key now is a budget that cuts out the things that we don’t need, closes corporate tax loopholes that don’t help create jobs, and frees up resources for the things that do help us grow-- like education and infrastructure and research. And these things historically have not been partisan. And this shouldn’t be as difficult as it’s been in past years because we already spend less than we did a few years ago. Our deficits are half of what they were a few years ago. The debt problems we have now are long term, and we can address them without shortchanging our kids, or shortchanging our grandkids, or weakening the security that current generations have earned from their hard work.

Using Republican talking points to go after Social Security is not going to endear Democrats to base voters. In fact, the AFL-CIO may be talking about backing primaries against Democrats who vote with the GOP against Social Security. Greg Sargent:

With the crisis chatter in Washington now turning to speculation about the coming budget talks and the possibility of a “grand bargain” to replace the sequester, liberals and unions are getting increasingly nervous that Congressional Dems will give up entitlement benefits cuts in exchange for, well, whatever is on offer from Republicans, which isn’t at all clear.

In an interview, Damon Silvers, the policy director of the AFL-CIO, laid down a hard line, putting Dems on notice that any agreement that cuts entitlement benefits-- even in a deal that includes GOP concessions on tax hikes-- is a nonstarter. Silvers strongly suggested labor would withhold support in 2014 from any Dem lawmaker who supports such a deal.

“We are opposed to Social Security, Medicare, and Medicaid benefits cuts. Period,” Silvers told me. “There will be no cover for members of either party who vote for such a thing.”

Silvers said the AFL-CIO also opposes the entitlements cuts in the President’s budget, such as Chained CPI and a form of Medicare means testing. It’s unclear how, or whether, those will figure in what Dems bring to the table in the budget talks, which are mandated by the deal just reached to end the crisis.

“Chained CPI is like the vampire of American politics,” Silvers said. “It keeps being shot through the heart and it keeps reviving. The reason it keeps coming back is because it has billionaires behind it.”

Silvers was referring to individuals and groups like Pete Peterson, a Wall Street billionaire whose lavishly-funded foundation has been pushing for cuts to these programs for years, Fix the Debt, which is pushing for deficit reduction, and GOP-aligned groups that have in recent years promoted the Paul Ryan budget. All of these are expected to spring into action when this fall’s fiscal fight-- and talk of a “grand bargain”-- heats up.

Silvers characterized the posture of those groups as follows: “Now that the last round of insanity is over, time to attack the social insurance system.”

“Cutting Social Security and Medicare and Medicaid benefits is not a route to a grand bargain; it is a route to deadlock,” Silvers continued. “We and a lot of folks are going to oppose it categorically, and everything will grind to a halt.”

Pressed on whether the AFL-CIO would support primary challengers to any Dems who support benefits cuts, Silvers demurred, but he said that all of the material created in such a battle-- video, ads, etc.-- would be available to any primary challenger, and added: “That’s the minimum we’re going to do. It only gets worse from there.”

In an interview with the Huffington Post, Harry Reid said Dems would not agree to any deal in the budget talks that simply trades entitlement cuts for relief to the sequester. That suggests Dems think they are in a strong political position heading into the budget talks, and that they want to lay down a hard marker in response to Republicans who have already ruled out agreeing to new revenues.

But that doesn’t preclude the sort of “grand bargain” that might include entitlement benefits cuts and the closing of loopholes on the rich and corporations. Even this is a non-starter for labor unions and liberal groups, who believe that despite yesterday’s big victory, Dems must continue to resist allowing the looming political battle to get pulled on to GOP turf, where we’d be debating still more spending cuts-- including to social insurance system benefits-- at a time when austerity is already crippling the recovery.

Well, at least Obama will have Wall Street, K Street, mainstream conservatives and New Dems on his side. We'll soon see if it's enough. On his blog Thursday, Robert Reich, says we know what to expect during the "cease-fire." He fears the President will "cave" to Republican demands for cuts to Social Security. Cave? This is what Obama has always said he wants.

We know the parameters of the upcoming budget debate because we’ve been there before. The House already has its version-- the budget Paul Ryan bequeathed to them. This includes major cuts in Medicare (turning it into a voucher) and Social Security (privatizing much of it), and substantial cuts in domestic programs ranging from education and infrastructure to help for poorer Americans. Republicans also have some bargaining leverage in the sequester, which continues to indiscriminately choke government spending.

The Senate has its own version of a budget, which, by contrast, cuts corporate welfare, reduces defense spending, and raises revenues by closing tax loopholes for the wealthy.

Here, I fear, is where the President is likely to cave.

He’s already put on the table a way to reduce future Social Security payments by altering the way cost-of-living adjustments are made – using the so-called “chained” consumer price index, which assumes that when prices rise people economize by switching to cheaper alternatives. This makes no sense for seniors, who already spend a disproportionate share of their income on prescription drugs, home healthcare, and medical devices – the prices of which have been rising faster than inflation. Besides, Social Security isn’t responsible for our budget deficits. Quite the opposite: For years its surpluses have been used to fund everything else the government does.

The President has also suggested “means-testing” Medicare-- that is, providing less of it to higher-income seniors. This might be sensible. The danger is it becomes the start of a slippery slope that eventually turns Medicare into another type of Medicaid, a program perceived to be for the poor and therefore vulnerable to budget cuts.

But why even suggest cutting Medicare at all, when the program isn’t responsible for the large budget deficits projected a decade or more from now? Medicare itself is enormously efficient; its administrative costs are far lower than commercial health insurance.

The real problem is the rising costs of healthcare, coupled with the aging of the post-war boomers. The best way to deal with the former-- short of a single-payer system-- is to use Medicare’s bargaining power over providers to move them from “fee-for-services,” in which providers have every incentive to do more tests and procedures, to “payments-for-healthy-outcomes,” where providers would have every incentive to keep people healthy. (The best way to deal with the latter-- the aging of the American population-- is to allow more young immigrants into America.)

More generally, the President has been too eager to accept the argument that the major economic problem facing the nation is large budget deficits-- when, in point of fact, the deficit has been shrinking as a share of the national economy. The only reason it’s expected to increase in future years is, again, rising healthcare costs.

Our real economic problem continues to be a dearth of good jobs along with widening inequality. Cutting the budget deficit may make both worse, by reducing total demand for goods and services and eliminating programs that lower-income Americans depend on.

The President has now scored a significant victory over extremist Republicans. But the fight will continue. He mustn’t relinquish ground during the upcoming cease-fire.