Democrats split on spending

President Obama met Senate Democratic leaders for urgent talks Wednesday as the party headed into what is shaping up to be a damaging fight over reining in the nation’s record debt.

The gathering at the White House was aimed at getting the White House and Senate Democrats on the same page on the issue. But Senate Budget Committee Chairman Kent Conrad (D-N.D.), a key fiscal hawk, was not part of the discussions.

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Conrad has stressed the need to tackle entitlement reform and criticized Obama’s budget for dodging the politically difficult issue. Meanwhile, Senate Majority Leader Harry Reid (D-Nev.) has stressed he is adamantly opposed to raising the retirement age for Social Security.

In short, Conrad is at odds with the message of his leaders, which is that entitlements are safe with Democrats but would be destroyed by Republicans.

Before the White House strategy session, Reid said, “Social Security has contributed not a single penny to the deficit, so you can talk about entitlements as long as you eliminate Social Security ... Social Security is not part of the ... problems we have in America with the deficit.”

Obama has been less definitive, but apparently wants to let Republicans make the first move on entitlements. 

Political observers note that Obama did not snub Conrad on Wednesday, because the only people invited to the White House were lawmakers on the Senate leadership team, of which Conrad is not a member.

The leaders who met with Obama were Reid and Sens. Dick Durbin (D-Ill.), Charles Schumer (D-N.Y.) and Patty Murray (D-Wash.).

Conrad, who will craft the Senate budget resolution, recently announced he would not seek reelection, saying he wanted to focus on fixing the nation’s dismal financial future.

Obama’s fiscal commission, on which Conrad served, concluded last year that the retirement age for Social Security eligibility must be raised to 68 and then to 69. Conrad backed the final report, as did Durbin and conservative Sens. Mike Crapo (R-Idaho) and Tom Coburn (R-Okla.). 

Sen. Bernie Sanders (Vt.), an Independent who caucuses with Democrats, said in a floor speech on Wednesday: “For people to come forward and say we’ve got to privatize Social Security... raise the retirement age ... lower benefits is absolutely wrong. We made a promise to the American people regarding Social Security and that’s a promise we have to keep.”

Conrad is negotiating with Durbin, Coburn and Crapo about bringing the commission proposal to the Senate floor as legislation.

Durbin acknowledged concerns of liberals, but said he voted for the commission plan so he could represent the liberal wing at the entitlement-reform table.

“They’re nervous about it, and I am too,” Durbin said, adding that the bipartisan group hopes to reach an agreement in the next several weeks.

Based on Reid’s comments on Social Security, it is doubtful such a plan would get his blessing.

How Reid deals with Conrad’s yet-to-be-released budget plan will be a major test of the Nevada lawmaker’s leadership skills. 

Nonpartisan analysts note that Medicare is in worse shape than Social Security, but say the chances of moving any major legislation on the hyper-partisan issue of healthcare this Congress are extremely small.

Well aware of that political dynamic, many on the left this year have worked to shield Social Security.

Labor unions and other liberal groups lobbied successfully to keep Social Security reform out of Obama’s State of the Union address in January. Roger Hickey, co-director of the liberal Campaign for America’s Future, for example, warned that a presidential call to cut Social Security would split the Democratic Party.

Republicans, media outlets and centrist Democrats have all jeered at the budget as failing to meet the fiscal challenge.

For now, congressional Democrats are fighting GOP calls to cut federal spending immediately, arguing that it would stanch the economic recovery and increase joblessness.

“The House Republican spending measures would gut our ability to create jobs, they would roll back investments and make America non-competitive in the future,” Schumer said.

House Republicans plan to cut at least $61 billion in government spending for the remainder of fiscal 2011, which ends in September. Obama has threatened to veto the GOP bill.

Senate Democratic leaders on Wednesday endorsed Obama’s call to freeze domestic discretionary spending for five years.

“It wasn’t an easy decision,” Schumer, vice chairman of the Democratic conference, said of the plan to adopt Obama’s freeze. “Some members of our caucus want to go further, but at a minimum we’re going to abide by this freeze.”

Reid has ripped the GOP spending plan, though he stressed that he is willing to work with House Republicans.

“We’re going to take a look at whatever they [pass],” Reid told reporters.

Senate Democrats have yet to show their cards in negotiations with House Republicans and the White House over a spending measure to keep the government funded this year.

Sen. Jim DeMint (R-S.C.), a founding member of the Senate Tea Party Caucus, predicted Wednesday that his colleagues would coalesce behind the House proposal.

“Republicans are going to support what they send over from the House,” he said. “We all know it’s not enough, but no one is pretending that this is the end. It’s a good start.”

DeMint’s remarks are good news for Minority Leader Mitch McConnell (R-Ky.), who is trying to unify his GOP colleagues around the House Republican plan.

Republican leaders have considered a proposal to pass a short-term funding measure to keep government in operation until early or mid-April. That would allow Obama and congressional Republicans to strike a grand bargain on federal spending, like they did last year on taxes.

Durbin said a deficit package, which could include entitlement reform, might be negotiated along with an increase in the debt ceiling and a 2011 bill to fund the government. 

“It seems to me we’re building up to a negotiation that involves all of these parts,” said Durbin.