Obama Told House Democrats to Look at Entitlement Changes

President Barack Obama told House Democrats this week that it’s better to make changes to entitlement programs when a Democrat is in office rather than risk doing so under a Republican chief executive, according to two lawmakers who attended.

Obama urged House Democrats at the Capitol March 14 to consider changes to Medicare and Social Security to make those programs more “sustainable” in the long run as part of a broader accord on deficit reduction, Democratic Representatives Robert Andrews of New Jersey and Peter Welch of Vermont said in separate interviews.

“He certainly made that point; if there are going to be entitlement reforms it is better to do it with a Democratic president in office,” Andrews said. Welch said Obama “was just really being practical about this.”

The president said that “those of us who care about Social Security and Medicare have to be the ones absolutely engaged in making sure that they are sustainable and the Democrats are committed to it, and he’s a Democratic president who is committed to it,” Welch said.

The president’s messaging to his party was part of his effort to strike a deficit-reduction deal with Republicans -- an agreement that has eluded Obama so far. Obama this week also met separately with Senate Democrats and Republicans, and the House Republican conference.

Political Dimension

House Majority Whip Kevin McCarthy, a California Republican, said he supports Obama’s effort to bring lawmakers together “to actually get reforms” in Medicare and Social Security, and now is the time to do that.

“I would take the politics out of it,” McCarthy said yesterday when asked about Obama’s comments. “The longer you wait, the fewer options you have, and the sooner it goes bankrupt. It’s not about who’s in office.”

The president in the closed-door meeting with House Democrats said because Democrats created these entitlement programs they should overhaul them to protect their future, according to a person in the room during the meeting who asked not to be identified to describe the discussion. If Democrats accept a deal, it could help Obama sell other parts of his deficit-reduction plan -- such as revenue -- to Republicans.

Deficit Reduction

Andrews said Obama’s message was focused on deficit reduction.

“He laid out the case for an agreement on the deficit, a long-term agreement that he believes would grow the economy, which he believes would then help the country in a very significant way,” Andrews said. “He clearly is very focused on trying to achieve a deficit agreement that gets us out of these every-six month crises.”

Democrats should “take appropriate action when we have people whose goal is to save the program and make it secure and solvent for the future, as opposed to folks whose view is that cutting the benefits and cutting the program is the way forward,” Welch said. The 2014 budget proposal put forth by House Budget Chairman Paul Ryan, a Wisconsin Republican, would do that, Welch said.

As in previous years, the centerpiece of Ryan’s budget plan is a proposal to revamp Medicare by giving people now younger than 55 fixed sums with which to buy either private insurance or to use in Medicare. Either way, their benefits would be capped under his plan, which would be a significant shift in how the currently open-ended program operates.

‘Hold Hostage’

House Speaker John Boehner, an Ohio Republican, said Obama is “going to hold hostage” needed changes to entitlements by insisting on tax increases as part of an agreement.

“It’s not going to get us very far,” Boehner told reporters after House Republicans’ March 13 meeting with Obama.

Administration officials said Obama is working to build trust on both sides so that Republicans can back off their insistence on no new revenues and Democrats can accept cuts to Medicare and other programs.

Resistance from rank-and-file Democrats to changes in entitlement programs -- including chained CPI, a change to the formula for calculating cost-of-living adjustments to Social Security benefits -- continues to be a challenge, Senator Richard Durbin of Illinois told reporters March 14.

‘A Reality’

“It’s a tough one, and there will be some Democratic senators who will never, ever consider a change in CPI,” said Durbin, the chamber’s second-ranking Democrat. “That’s a reality.”

Still, Durbin said he would continue to advocate for such proposals “as one of the elements toward long-term solvency in Social Security,” as long as changes to Social Security are crafted so they don’t hurt the most vulnerable recipients.

Obama’s visits to Capitol Hill this week were designed to get members of his own party, as well as Republicans, “into the grand-bargain context,” Durbin said.

Obama told Senate Democrats March 12 that they should be open to changes in entitlement programs to achieve a long-term budget deal. Iowa Senator Tom Harkin said Obama rebuffed his demand, joined by Vermont Senator Bernie Sanders, for an assurance that Medicare and Social Security benefits would be untouched in any “grand bargain” agreement.

West Virginia Senator Joe Manchin said he liked that Obama “is taking a very pragmatic approach” to entitlements.

“We’re not going to be, as Democrats, changing our core values on Medicare or Social Security,” Manchin said. “But with that, running more efficiently, looking at things that do make sense, I think he’s looking at that.”

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To contact the reporters on this story: Roxana Tiron in Washington at rtiron@bloomberg.net; Julianna Goldman in Washington at jgoldman6@bloomberg.net; Kathleen Hunter in Washington at khunter9@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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