Yvonne Robinson, secretary-treasurer of the Georgia AFL-CIO, joined organized-labor colleagues in Washington last week to meet with her state’s Democrats and deliver a firm message on the impending “fiscal cliff.”
Amid talks of a wide-ranging budget deal to avoid the tax hikes and spending cuts due to start at year’s end, Robinson insisted on labor’s priorities: Higher taxes on top earners and maintaining Medicare, Medicaid and Social Security. “Our position is that we don’t want any changes or cuts; we don’t want any cuts in services,” Robinson said.
Georgia’s five Democrats in the U.S. House expressed similar sentiments in interviews, underscoring a major hurdle to an accord on a fiscal path. While there is no functional equivalent on the left to Republicans’ no-new-taxes pledge, Democrats’ zeal to guard entitlement programs is strong. Entitlement programs are those in which eligible citizens have a legal right to benefits.
Most Georgia Democrats showed limited willingness to entertain any entitlement reform as part of a fiscal-cliff deal, as it’s taxes and cuts to the military and domestic spending that are on the line under a year-end deadline.
“The first order of business is determining and taking this whole gusher of revenue that’s coming in as a result of the Bush tax cuts expiring,” said Atlanta Democratic Rep. David Scott. “And I think if you take that first and make some kind of agreement on that … that gets the ball rolling and you begin the process” of dealing with spending cuts.
But Republicans are demanding big savings from entitlement programs in exchange for any new tax revenue. An apparent opening bid from President Barack Obama that included $1.6 trillion in new tax revenue accompanied by less than half that much in cuts to Medicare and other programs, was rejected out of hand by GOP leaders. House Republicans replied Monday with a middle-ground offer to the White House that included $800 billion in new tax revenue, $900 billion in cuts to entitlement and other mandatory programs and $300 billion in other spending cuts.
Democrats’ negotiating hand may have been strengthened by the election, but Republicans still control the House and, as in last year’s standoff over the federal debt ceiling, Obama and House Speaker John Boehner are the primary negotiators.
During the debt-ceiling negotiations Obama reportedly floated a couple of ideas to save money on entitlements. One would be to change the way inflation is calculated on Social Security benefits, in effect slowing increases in those payments in the coming years. Another would be to gradually raise the Medicare eligibility age from 65 to 67.
Those ideas were never formally presented to Democrats as the deal between Obama and Boehner fell apart, but they got a cool reception from the Georgia Democrats last week.
“I have some real concerns about that,” Albany Rep. Sanford Bishop said of raising the Medicare age. “Because the extent to which that will be fair depends greatly on the kind of career and occupation that the Medicare beneficiary had over their working life. If you worked in a coal mine, by the time you are 50 or 55 you may very much need Medicare.”
And most Democrats do not believe Social Security should even be part of the discussion.
“Social Security should not be on the table,” said Scott. “Absolutely totally off. Social Security undergirds the entire safety net. We need to strengthen Social Security.”
With Social Security starting to run a deficit, Scott recommended potentially increasing the income threshold on which Social Security taxes are collected. They are now levied only on the first $106,000 of income; Scott proposed at least doubling that figure.
On Medicare, DeKalb County Democratic Rep. Hank Johnson said, “I don’t support any cuts to beneficiaries or benefits.” He instead promoted a long-held Democratic priority of allowing Medicare to negotiate directly with pharmaceutical companies on drug prices to save money. Drug companies now negotiate prices with insurance companies.
If a deal does emerge, it likely will need the support of a mix of moderate Democrats and Republicans, and Augusta Democratic Rep. John Barrow fits that bill. Barrow, one of the most centrist members of Congress, represents a Republican-leaning district. He insisted the focus should be on Medicare and Medicaid instead of Social Security, given how much health costs contribute to the rising red ink in budget projections.
Rather than just “hacking away at spending on Medicare,” the government must figure out a way to change the incentives for health-care providers and patients, Barrow said, to attack the costs — in dollars and in lives — of afflictions like diabetes and Alzheimers. That is unlikely within the next month.
“The pragmatist in me suspects it’s going to take some installments – a few steps,” Barrow said. “There’s going to be a short-term, an intermediate-term and a long-term phase. I am very encouraged by the fact that both sides appear to be having discussions about this now.”
But the parties have starkly different priorities on taxes and entitlement spending. Democrats — with groups like AFL-CIO lobbying them to stand firm — were emboldened by the election results to fight for higher taxes on top earners and a robust social safety net.
Rep. John Lewis, D-Atlanta, said he would not get into specifics on what he could or could not support, but he said of entitlements: “It’s almost like a covenant, and you can’t violate a covenant.”
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