The powerful seniors lobby AARP on Friday warned the leaders of the newly formed congressional budget conference committee to stay away from Social Security and Medicare.
The warning letter comes despite strong indications that House Budget Committee Chairman Paul Ryan (R-Wis.) and Senate Budget Committee Chairwoman Patty Murray (D-Wash.) are shying away from any “grand bargain” on entitlements and taxes.
Ryan and Murray are trying at a minimum to replace all or part of the sequester's $91 billion in cuts to discretionary spending that are hitting agency operating budgets this fiscal year. Both have talked about cutting mandatory spending, too, a category that includes entitlements. The conference committee is trying to forge a deal by Dec. 13 so a government spending bill can be drawn up by Jan. 15, when another shutdown looms.
“AARP firmly believes that any changes to Social Security, which is off-budget, self-financed by payroll taxes and has run surpluses for most of the last 30 years, must be done separately,” the letter states. “We have therefore opposed, and will continue to oppose, proposals to authorize Social Security changes for, or within the context of, deficit reduction or budget agreements.”
President Obama in his April budget proposal floated the idea of adopting a new measure of inflation known as "chained" consumer price index. Chained CPI would lower benefits for future seniors because it would reduce annual cost-of-living increases. The government's announcement of only a 1.5 percent cost-of-living increase next year for Social Security angered the AARP this week.
Obama made the proposal in the context of a comprise that would also raises taxes. While some Republicans like Ryan want to pocket the chained CPI savings without the tax increases, other Republicans attacked Obama for targeting seniors' benefits.
The AARP letter also warns against benefits cuts for Medicare.
“AARP opposes any proposal which either shifts costs to Medicare beneficiaries or reduces their benefits. Cost-shifts, such as expanding income-relating of premiums, adding copays, raising deductibles, or limiting first-dollar coverage, do nothing to improve our health care system or lower overall health care costs,” the letter states.
Obama has proposed greater means-testing for Medicare benefits, and Ryan wants to partially privatize the program with federal subsidies for buying privatized Medicare plans.