Following Pelosi's lead, House Dems dig in their heels on entitlements

Behind their leader Nancy Pelosi (D-Calif.), House Democrats are solidifying their resistance to including any entitlement cuts in a debt-ceiling package.

Pelosi met privately with President Obama and Vice President Biden Friday morning to lend the White House "a clear understanding of the terms for how we go forward," she told reporters afterwards.

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At a closed Democratic Caucus meeting following the White House pow-wow, Pelosi was much less reserved when she relayed how she'd told Obama in no uncertain terms of the caucus' opposition to any cuts in Social Security, Medicare or Medicaid, according to a number of lawmakers who attended the gathering.

"The [caucus] cheered Pelosi when she said she was not going to back up, and that's the message she's delivering to the White House," said Rep. Emmanuel Cleaver (D-Mo.), the chairman of the Congressional Black Caucus.

"She was speaking for all of us," added Rep. Zoe Lofgren (D-Calif.).

Obama stunned Democrats this week when he signaled an openness to Social Security and Medicare cuts — favored by Republicans — as a way of enticing GOP leaders to accept new tax revenues — favored by Democrats — as part of legislation to hike the nation's $14.3 trillion debt limit. The Treasury Department has said it can stave off a default on government obligations until Aug. 3.

Adding urgency to the discussions, the Labor Department reported Friday that the economy created a meager 18,000 jobs in June, sending the unemployment rate to 9.2 percent. The figure was well below the roughly 150,000 new jobs needed each month just to keep up with the growing population.

The jobs report is likely to entrench the positions of both parties, as Republicans have argued that new tax burdens on businesses and the wealthy will cripple hiring, while Democrats maintain that cuts to spending and safety-net programs will harm the middle class and kill jobs.

"With all this money that the private sector has … we keep on hearing from the other side, 'We’re going to cut our way to prosperity,'” Rep. John Larson (D-Conn.), chairman of the Democratic Caucus, said Friday. "How has that helped this economy?"

Bipartisan leaders from both chambers met with Obama on Thursday to advance the debt-ceiling talks, and a similar gathering has been scheduled for Sunday.

The debt-ceiling vote has created a pickle for Speaker John Boehner (R-Ohio), who supports the debt-limit hike but almost certainly doesn't have the votes to pass it without Democratic help. That odd dynamic hasn't been overlooked by Democrats, who are trying to use their leverage to influence the final bill.

"Triangulation isn't going to work here," Rep. Gerald Connolly (D-Va.) said Friday. "You need the Democratic Caucus to pass this."

Connolly estimated Friday that GOP leaders would need roughly 100 Democratic votes to secure passage of the bill. 

"That is going to be a tall order," he said, "and whether they [Republicans] like it or not, revenue is going to have to be on the table."

As bipartisan leaders take the discussions into the weekend, there's little mystery about where the House Democrats stand on entitlement cuts.

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Rep. Louise Slaughter (D-N.Y.) said the "sacrosanct" entitlements shouldn't be dragged into the talks "as a panic bell." Rep. Joseph Crowley (D-N.Y.) said plans to reduce benefits — including a proposal to change the way inflation measures are tied to benefits — are a non-starter. And Cleaver, the CBC chairman, said the Democrats wouldn’t accept benefit cuts — "not even if we were on drugs."

Many Democrats, including Pelosi, were quick to carve a distinction between benefit cuts that would shift more costs to seniors, and entitlement reforms, aimed at making those programs more efficient. 

Rep. Chris Van Hollen (Md.), the senior Democrat on the Budget Committee, specified two Medicare reforms Democratic leaders are urging as part of the debt-limit package. 

The first would empower Medicare to negotiate pharmaceutical prices on behalf of the millions of seniors in the Part D drug benefit program. The second would require the drug industry to pay rebates to the government for drugs purchased for patients enrolled in both Medicare and Medicaid — a requirement that was eliminated with the launch of Part D in 2005.

"Asking the pharmaceutical industry to go back to the same rebate structure that was in place before 2005 is appropriate — it helps Medicare," Van Hollen said.

Aside from the non-starter of benefit cuts, Pelosi has noted a second condition for leaving entitlement reform on the table as part of the debt-ceiling talks: Any savings derived from the changes must go back to the programs themselves, not toward deficit reduction.

"If you talk about the pharmaceutical [reforms], if the purpose is to strengthen Medicare, then let's make sure that money goes to Medicare, not to deficit reduction," she said.

Not all Democrats are drawing the same lines in the sand. Rep. Robert Andrews (N.J.), for instance, has sided with Obama in support of a broad, $4 trillion deficit reduction package, including some combination of entitlement cuts and revenue raisers. 

"The president should get enormous credit," Andrews said, "for being willing to talk about entitlement changes the Democrats are not readily accepting." 

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Still, even Andrews acknowledged that, on that point, he's in the minority within his caucus. Asked if there is a large enough group of Democrats to push entitlement cuts over the finish line, he said, "Not large enough yet." 

Some other Democrats are warning that entitlement reform has no place at all in the current debt ceiling talks. 

"This shouldn't be the time to make momentous, long-term decisions about programs that have been with us for decades," said Rep. Rush Holt (D-N.J.). 

With most of the details yet to be worked out, at least one Democrat said the best way to secure a deal is to keep it a secret, lest special interests lobby out the reforms before the package is even finalized. 

"The best advice for us," said Rep. Peter Welch (D-Vt.), "is not to be told what's in it."