Erskine Bowles right, and former Wyoming Sen. Alan Simpson.
Alex Brandon, Associated Press
RISKS OF THE FISCAL CLIFF2 million jobs lost
Estimated consequence of the "fiscal cliff" imposed on the U.S. by the 2011 Budget Control Act, which would go into effect on Jan. 1, 2013.4 percent drop in GDP
Congressional estimate of the cliff's effect on the U.S. economy, which could cause a new recession.
Liberal groups regrouping to save entitlements
- Article by: ZACHARY A. GOLDFARB
- Washington Post
- November 12, 2012 - 11:17 PM
WASHINGTON - With President Obama seeking a deal to avoid the fiscal cliff, liberal groups that campaigned aggressively for his reelection are mobilizing to oppose concessions they fear he might make on Medicare and Social Security.
Leaders of the nation's labor unions and other liberal groups plan to press Obama at the White House on Tuesday to reject the kind of cuts in Medicare and Social Security that he has previously offered to make. On Thursday, left-leaning lawmakers and seniors groups plan to rally on Capitol Hill against any changes to entitlements.
Republicans are demanding such changes as part of any deal to reduce the federal deficit. Top GOP lawmakers have said they could agree to raise fresh tax revenue -- taking a step closer to the Democratic position that the wealthy pay more -- but only if the White House accepts the type of entitlement changes that many liberals abhor.
During debt negotiations with House Speaker John Boehner, R-Ohio, during the summer of 2011, Obama tentatively agreed to increase Medicare premiums and later boost the eligibility age for the program from 65 to 67. He also was willing to modestly reduce Social Security payments by using a less-generous formula for cost-of-living increases. After those talks collapsed, Obama did not include similar proposals in his debt-reduction plan released last fall.
Now, with negotiations resuming, Obama has not made clear precisely how far he would go on entitlements. But people close to the White House say officials believe the election strengthened their hand and reduced the need to make concessions. The extent of any entitlement changes may depend on how much new tax revenue Republicans are willing to accept.
In the upcoming negotiations, Obama may have to decide whether he is willing to break with his liberal allies in pursuit of a bipartisan agreement aimed at avoiding the year-end fiscal cliff -- $500 billion in automatic tax hikes and spending cuts that many economists say could plunge the nation into recession.
The White House decision to invite labor and other liberal leaders to a meeting comes as the debate over the fiscal cliff is escalating. On Wednesday, Obama is to meet with business leaders who support a deal that increases taxes on the wealthy, and on Friday he opens discussions with congressional leaders. High-level talks are likely to intensify after Thanksgiving.
The White House has suggested that if the talks do not progress as Obama wants, he may barnstorm around the country to rally the public behind his position.
Entitlements key to debate
Much of the public dispute over the fiscal cliff has centered on the president's demand that taxes rise for the wealthy. But entitlements are an essential element of the discussion because they are the main drivers of the nation's borrowing problem in the years to come.
Spending on Medicare and Medicaid is projected by the Congressional Budget Office to equal 10 percent of the economy in 25 years -- double the percentage today. Over the next 25 years, Social Security spending is expected to rise from 5 percent of the size of the economy to 6 percent, mainly as a result of the retirement of baby boomers.
Democratic lawmakers have made clear they will oppose any changes to Social Security. Senate Majority Leader Harry Reid, D-Nev., told reporters last week that he is open to a fiscal-cliff deal but that "we are not going to mess with Social Security."
Obama's 2013 budget would reduce spending on health care programs by $360 billion over a decade, in part by reducing payments to drug companies. Obama has also proposed increasing premiums for some retirees starting in 2017.
Neera Tanden, president of the Center for American Progress, said liberals understand the need to slow Medicare spending but want to do it carefully.
"But we have to be really mindful of where those savings come from and whether they're coming out of the pockets of seniors and whether they're the result of savings in the health care system," Tanden said. "Those are two different things, and one progressives can agree with and one is extremely difficult.
© 2013 Star Tribune