Will Obama Cave on Social Security?

With chained CPI a likely part of any debt ceiling deal, outraged progressives are organizing in advance.

January 12, 2013  |  

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A top official at the nation’s largest union federation slammed a Social Security cut proposal that’s been floated by President Obama, but stopped short of calling it a deal-breaker in the next round of budget wars.

“We remain strongly opposed” to chained CPI, AFL-CIO government affairs director Bill Samuel told Salon. “It’s a very substantial benefit cut.”

“Chained CPI” is a proposed alternative method of calculating cost of living adjustments, which would reduce future increases in Social Security benefits. Samuel said that for many seniors on fixed incomes, even “the current system may not be adequate.” He called the claim that chained CPI could be implemented in a way that would be fair to such retirees “sort of ludicrous.”

Obama has repeatedly touted chained CPI as an aspect of a potential “Grand Bargain” with Republicans to reduce the deficit. In a “Meet the Press” interview aired on Dec. 30, the president highlighted it both as an example of his willingness to make concessions to the GOP and part of his “pursuit of strengthening Social Security for the long-term.”

The same day that interview aired, Republicans reportedly dropped their insistence on including chained CPI in the scaled-down so-called fiscal cliff deal, signaling they expect it to be part of a larger deficit deal in the next few months. So, it appears, does Obama. Can labor stop them?

“The White House has signaled many times they’re very open to this concept, which puts us in a very precarious situation,” said Eric Kingson, a co-chair of Strengthen Social Security. That coalition, whose 300-some member groups include the AFL-CIO and some of its largest unions, supports increasing Social Security benefits and opposes chained CPI, which Kingson called “a disguised benefit cut.”

Kingson and fellow co-chair Nancy Altman told Salon they would recommend that the Strengthen Social Security coalition oppose any overall deficit deal that includes chained CPI. Altman, whom the AFL-CIO is urging Obama to nominate as Social Security commissioner, said, “I think we would certainly have the view that there should be a line in the sand that should not be crossed.” But she noted that individual coalition members would “have to weigh a lot of things” in deciding whether their own groups would also support torpedoing an overall deal over chained CPI.

No member of that coalition is more prominent than the AFL-CIO, the federation of 56 unions that played a major role in reelecting the president. So will the AFL-CIO pledge to oppose any deficit deal that includes chained CPI? “I’m not going to answer that,” said Samuel. “That’s theoretical. I expect we will remain opposed to chained CPI.”

Samuel said that the federation’s overall priorities in any budget deal are the same ones it pushed during the “fiscal cliff” fight: raising taxes on the top 2 percent of Americans and averting cuts to Medicare, Medicaid and Social Security. In a follow-up email to Salon, Samuel added that it was “very unlikely” that the AFL-CIO would support any deal that included safety net cuts.

The AFL-CIO’s strategy for the current budget wars will be a topic of discussion at its Executive Committee meeting on Wednesday.

National Nurses United executive director RoseAnn DeMoro, one of 53 members of the AFL-CIO Executive Council, said the federation needs to take a hard line. “I think they should borrow some cement from the building trades and draw a line in the sand and keep it there …” she told Salon. “It would be unconscionable for the AFL-CIO to maintain a position of any type of wiggle room with respect to that.” DeMoro said that the varying politics of its affiliate unions make the AFL-CIO “a mixture of a whole lot of different forces,” but said it “needs to separate itself from the Democratic Party and stand on its own.”