Obama’s entitlement cuts paved the way for Dems’ support of Reid debt plan

Senate Majority Leader Harry Reid (D-Nev.) can thank President Obama for the popularity of his proposal to raise the debt ceiling. 

While Democratic criticism is focused on Speaker John Boehner’s (R-Ohio) short-term approach to raising the $14.3 trillion limit that will receive a House vote Thursday, Obama also is getting hammered for offering up cuts to entitlements most in the party consider sacrosanct.

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Obama’s willingness to sacrifice entitlement benefits for the sake of a deal was “distressing” and “upsetting,” said Rep. Keith Ellison (D-Minn.), co-chairman of the Congressional Progressive Caucus. 

Rep. John Garamendi (D-Calif.) said the news was “terribly disappointing.” And Rep. Peter DeFazio (D-Ore.) said, if Obama was sincere in his offer, “then he’s out to lunch.”

Reid’s measure would cut trillions in spending without increasing any taxes on business or the wealthy, making it precisely the kind of unbalanced approach to lowering deficits that House liberals say should be avoided. 

Yet Democrats in the lower chamber have rallied around it as a lesser evil compared not only to Boehner’s proposal, but to their president’s. 

Indeed, many Democrats have latched on to the Reid plan precisely because it leaves Social Security, Medicare and Medicaid alone. The absence of tax-revenue increases, many said, is just part of the compromise.

The sweeping debt-reduction package that, until last Friday, was in the works between Obama and Boehner would have cut hundreds of billions of dollars from entitlement programs — including some future benefits that made the proposal a nonstarter in the eyes of many House liberals.

“Yes, the Reid plan takes revenue off of the table. The Reid plan also takes entitlements off the table,” Rep. James Clyburn (S.C.), the third-ranking House Democrat, said Wednesday. “We were big on entitlements; they were big on revenues. All of that washes away.”

Ellison said the Reid plan is evidence that Congress doesn’t need entitlement benefit cuts to rein in deficit spending.

“If you look at the Reid plan, he holds the Big Three harmless, so it doesn’t have to happen,” Ellison said.

Obama revealed Friday that he’d offered Republicans $650 billion in entitlement cuts — changes administration officials said included an increase in Medicare’s retirement age and a reworking of how Social Security payments are calculated, known as the chain CPI. Additionally, Obama reportedly was eyeing a Medicare-premium hike for wealthier beneficiaries.

The president said the changes “preserved the integrity” of the programs for future generations. 

Ellison said Obama’s concessions were an indication that the president was serious about reaching a deal — in contrast to Republicans, he charged, who “are not within the realm of rationality.”

Still, the Minnesota liberal also blasted the cuts as a step too far.

“Social Security, Medicare, Medicaid don’t need to be touched,” Ellison said. “In my view, the chain CPI is touching Social Security. Raising the [eligibility] age is touching it. Means-testing is touching it.

“I wouldn’t have voted for that if he’d put it in front of me.”

Other Democrats piled on the president’s offer. 

“I thought, how many people would it hurt? How many people won’t have access to healthcare? How many clinics will close?” Rep. Luis Gutierrez (D-Ill.) said. “This is real money.”

The Illinois liberal wondered how the president hoped to pass such a package through the House, considering its success hinges on significant support from Democrats.

“They’d better figure out who they’re selling this to,” Gutierrez said. “They need House Democrats to pass this bill, but who? What’s the coalition? The president on Friday did not help build one in this caucus.”

House Democrats have been stewing for months since Obama ignored their concerns in December and forged an agreement with Senate Republicans to extend the George W. Bush-era tax cuts, even to the wealthiest Americans. More recently, they were excluded from talks between Obama, House Republicans and Senate Democrats to finalize the 2011 continuing resolution (CR) — a bill that ultimately required House Democratic support to become law.

Party leaders have vowed to remain a force during the contentious talks over how to raise the nation’s $14.3 trillion debt ceiling, which the government is expected to hit Aug. 3.

Behind Boehner, House Republicans are proposing a two-step fix that would require Congress to hike the debt ceiling again next year. Reid’s plan, by contrast, would extend the debt limit through 2012 — and November’s elections.

It remains unclear if Boehner has the votes to move his proposal through the House. On Wednesday night, GOP leaders were still tweaking their proposal to make it more attractive to conservative members.

Also uncertain is whether GOP leaders would take up the Reid bill if the Boehner plan fails.

Rep. John Larson (Conn.), chairman of the House Democratic Caucus, predicted Wednesday that the Reid plan would win support from 180 of the 193 House Democrats. But not all Democrats are lining up enthusiastically behind the proposal.

Gutierrez, for instance, said he doubts he’ll support it.

“Once you start into the trillions of dollars and there’s no offset with new revenues, it becomes virtually impossible for the cuts to not have a real devastating effect,” Gutierrez said Wednesday.

Garamendi also slammed the Reid plan for a lack of balance between cuts and new revenues.

“From the very outset we’ve talked about shared sacrifice,” he said. “It’s a nice soundbite, but when it gets down to writing the bill it seems to disappear.”