By Walter Alarkon - 04/26/10 11:48 PM EDT
A liberal lawmaker on the White House fiscal commission warned its Republican co-chairman against relying on cuts to seniors’ entitlement benefits to craft a plan to rein in the deficit.
Rep. Jan Schakowsky (D-Ill.) said former Sen. Alan Simpson (R-Wyo.) and other fiscal hawks have focused too much on possible changes to entitlement programs, especially Social Security, ahead of the White House fiscal commission’s first meeting on Tuesday.
The “tax entitlements” Schakowsky referring to were exemptions aimed at helping people save for retirement, such as tax breaks on money invested in 401k and individual retirement accounts (IRAs), according to her office.
The commission’s recommendations need the votes of 14 of the 18 members to make it to Congress, so any defector could be a cause for concern. And if Schakowsky’s against the possible changes to entitlement programs than other Democrats would worry about voting for them because it could be seen as a vote against seniors.
Schakowsky joined liberal groups in pushing back Monday against Simpson and the fiscal commission’s Democratic co-chairman, former Clinton White House Chief of Staff Erskine Bowles, who have said that all options for reducing deficits must be considered.
“I feel that part of my job on the commission is to make sure that we have a consensus that the goal of fiscal policy and budget policy is to make sure that we serve the needs of the people in our country, in our democratic society, and not just put out a green eyeshade and start slashing programs,” Schakowsky said.
Simpson and Bowles, picked to lead the commission by President Barack Obama, have made clear that the commission will consider new taxes that could irk Republicans and cuts in spending and entitlement benefit levels that would be unpopular with Democrats.
Soon after they were named to the panel in February, Simpson told PBS that the country “is going to the bowwows unless we deal with the entitlements, Social Security and Medicare.”
Last Sunday, Bowles said Democrats must be open to reductions in entitlement benefits.
“If we’re going to be serious about balancing the federal budget and righting this fiscal ship, then we have got to have everything on the table, and that includes the entitlement programs,” Bowles on Fox News Sunday.
Obama wants the commission to recommend moves that would cut the deficit to a level equal to three percent of gross domestic product by 2015 and to lower levels in future decades. The deficit is expected by the White House and the Congressional Budget Office to hit 10 percent of GDP this year. Under Obama’s budget proposal, the deficit wouldn’t ever fall below 4 percent of GDP. And it would start growing again by the middle of this decade. If 14 members of the bipartisan panel can agree on a package of reforms, Democratic leaders in Congress will bring it up for floor votes in December.
Schakowsky and liberal groups sought Monday to protect Social Security from any major changes as the commission starts up.
While Social Security is the largest entitlement program, it’s not growing as quickly as Medicare, said former Rep. Barbara Kennelly (D-Conn.). Plus, Social Security has a $2.6 trillion trust fund, which ensures that the program will pay out benefits for nearly three more decades, Kennelly said.
“Social Security is not the trouble; it’s just becoming the target,” said Kennelly, now president of the National Committee to Preserve Social Security and Medicare.
“We hope the commission will focus on fixing the cost of deficits rather than reaching for the largest pot of money for its solution,” she said in a conference call.
The cost of Medicare to the federal government is expected to double from nearly $500 billion 2009 to more than $1 trillion in 2020, according to a CBO estimate (which doesn’t account for the effects of the Democrats’ new healthcare programs). Over the same period, the cost of Social Security will grow by 73 percent to less than $1.2 trillion in 2020.
Schakowsky said she was open to small changes to make sure the Social Security trust fund remains solvent for future beneficiaries. But she said trust fund money reserved for Social Security shouldn’t be used to reduce the deficit. Entitlement benefit changes could hurt seniors who rely only on Social Security checks, a group that has an average annual income of $18,000, she said.
“Are these the people that are going to be depended on to balance the budget and take care of the long-term debt?” she said. “I don’t think so.”