Should Democrats and Liberals Embrace Obama's Budget Proposals?

It was expected that the GOP - especially the saboteurs in the House of Representatives would reject any budget proposal coming from the White House.  But some liberals are acting nearly as hysterically about some budget cuts contained in the proposal (e.g., I just got a breathless e-mail from Daily Kos).  The reality is that to achieve  a workable mechanism to reduce the national debt bot cuts and tax increases are needed.  Tax increases alone will not solve the problem.  In short, some type of workable compromise needs to be cobbled together, including addressing social security and Medicare adjustments - and I say this as one not too many years from qualifying for both programs.  The adjustments proposed are minuscule.  Robert Shrum makes the case for less hysteria from the left and more of a unified front to put the pressure on the GOP to strike a meaningful deal that avoids the GOP goal of voucherizing Medicare and Social Security.  Here are  highlights from a piece in The Daily Beast:

You would think President Obama was proposing to repeal the New Deal. (Well, actually, that’s Paul Ryan.)

This wasn’t the Republican reaction, of course, to a budget that was pre-dead on arrival, dismissed in advance by House Speaker John Boehner and disdained by the Tea-spooked Senate Republican leader Mitch McConnell, who couldn’t take yes for an answer when the president called for the entitlement changes McConnell had previously promised “would get Republicans interested in new revenue.” Aside from the fiscal fallout of a failed budgetary process that could slow the economic recovery, the episode points to a likely and grim outcome of these two years—that not much will emerge living or lasting from this Congress.

And don’t just blame GOP members, largely trapped in their gerrymandered red districts, incapable of doing right even if they recognize it, as they cower before the threat of primary challenges. The Democratic base, and prominent Democrats in the Senate and House, rushed to scorn the president’s Social Security and Medicare reforms as a betrayal of progressive principle.   .  .  . . Rhode Island’s Sheldon Whitehouse insisted that Social Security “has no place in this debate over federal spending.”
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That’s an amazing statement, given that Social Security and Medicare account for 35 percent of federal outlays, and the trust funds for both are in serious and not-so-long-term trouble. We are far from the bipartisan moment in the 1980s when Ronald Reagan, House Speaker Tip O’Neill, and Alan Greenspan rescued Social Security—by, yes, gradually raising the retirement age.

But what’s the reality, not the abstract jeremiads about a sacrosanct safety net, but the specific dollars-and-cents impacts of the proposals? The president didn’t ask for any fundamental changes in either Social Security or Medicare, which the House Republican budget would voucherize.

Obama would shift the annual cost of living increases for Social Security to a new formula with the unfortunate name “chained CPI.” But the consequences for benefits are not draconian, or even substantial—and as I’ve argued before, the formula has been altered in the past. It’s not sacrosanct, a matter of basic principle, even if the program is. Chained CPI would initially yield about $2 less a month in the average Social Security check. And as its effects multiplied, in 20 years, the difference would be $126—approximately $2,100 instead of $2,200 a month.

Beyond that, the president of the Center on Budget and Policy Priorities Bob Greenstein, one of the landmark defenders of the safety net and a passionate advocate but a cooler head, pointed out that Obama was offering essential offsets to chained CPI: “[His] budget includes a series of adjustments and protections for the very old and for people with low incomes... It should prevent an increase in the overall poverty rates among the very old.”

As for Medicare, the president is seeking cuts in payments to providers, especially the pharmaceutical industry. Good for him. He also wants wealthier seniors to pay higher premiums and he proposes a surcharge on those who buy the most generous and expensive Medigap insurance to cover out-of-pocket costs that Medicare doesn’t. 

And what’s the alternative to calibrated entitlement reforms that reform rather than gut Social Security and Medicare? Virginia Democratic Sen. Mark Warner explains: “You squeeze early childhood programs, you squeeze Head Start, you squeeze education and veterans.” Or now, or later, Congress could lift the eligibility age for Medicare to 67 or beyond, potentially leaving millions of seniors without any coverage while saving hardly any money.

The question here, the question the president had to answer, is what’s both acceptable and attainable.  .   .   .   .   .   The Obama budget does raise taxes on the wealthy by capping their deductions—which is one reason Democrats should rally to it. And there’s another: it increases spending now, while back-loading steeper deficit reduction, to support and speed the pace of the recovery. Do Democrats really think it’s smart to go into the midterms weighed down by the vulnerability of a sluggish economy? That didn’t work out so well for them in 2010.

They are concerned about another vulnerability—being tagged as the Social Security, Medicare-cutting party. The chairman of the House Republican campaign committee promptly and predictably assailed the president’s budget as “a shocking attack on seniors.” It was high hypocrisy: he had voted for the Ryan budget’s thermonuclear attack on seniors.

So Democrats, fearful for different reasons than the GOP, are now distancing themselves from Obama.  .   .   .  .  Just because the GOP is unserious about government doesn’t mean Democrats should be unserious too. The president has been responsible and brave. In any event, his party could fight out 2014 on Medicare and Social Security against an opposition that has a long record, and a contemporary one, of inveterate hostility to the social safety net.

Democrats could prove willing, as they showed during the battle at the fiscal cliff, to compromise—and settle for the Obama budget. They should.

We non-Republicans need to turn the tables on the GOP by accepting minimal adjustments to Social Security and Medicare and reminding the public what the Paul Ryan budget passed by the House GOP would do in comparison.  The GOP hypocrisy will need to be slammed head on.