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Fault lines also appearing on Democratic side in fiscal debate

House Minority Leader Nancy Pelosi (D-San Francisco) seems to have left President Obama little wiggle room on Medicare in the fiscal debate with Republicans. “Don’t even think about raising the Medicare age,” she said.
(Chris Somodevilla, Getty Images)
<i>This story has been updated, as indicated below.</i>

WASHINGTON — For weeks, Democrats in Congress have been relishing the division and sniping within Republican ranks over whether to raise tax rates. But as negotiations over the budget crisis wear on and shift to a debate over spending cuts, the tables are turning.

Democrats last week aired their own internal battles in the war over the federal deficit. In a petition, a newspaper column, letters and sharply worded comments, top Democrats on Capitol Hill warned the president to protect the social safety net and step back from previous proposals to make major changes.

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White House officials insist nothing is off the table, tacitly acknowledging that the president is weighing potential changes to Medicare, Medicaid and Social Security as he negotiates with House Speaker John A. Boehner (R-Ohio). Although both sides have been reluctant to put details in writing, any deficit reduction deal will almost certainly require significant alterations to these entitlement programs.

Boehner made a fresh offer in a phone call with the president Friday: The speaker would agree to allow tax rates to rise on those earning more than $1million in exchange for “substantial” reductions in spending and entitlements, according to an aide familiar with the negotiations who was not authorized to speak about the details.

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Yielding on tax rates would be a substantial concession for the Republican leader, who had previously said that new revenue would come only from reforming the tax code next year in a way that could lower all rates. Democrats have dismissed that approach as not penciling out.

Boehner’s offer also could resolve the thorny issue of raising the nation’s debt limit, which will come up early next year. He wants to match new borrowing capacity with at least as much reduction in spending, but Democrats have resisted those efforts.

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The White House does not appear to have accepted Boehner’s overture, although the lines of communication remain open.

“There is no agreement, nor is one imminent,” said Boehner spokesman Michael Steel over the weekend.

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As for Democrats, the debate is the president’s first major postelection leadership challenge. It could determine not only whether a deal passes, but whether Obama can repair four years of ragged relations with his allies in Congress.

The debate is the president’s first major postelection leadership challenge. It could determine not only whether a deal passes, but whether Obama can repair four years of ragged relations with his allies in Congress.

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The Democratic fault lines were apparent last week. More than 80 Democrats signed a letter to Obama urging him not to agree to a deal that would raise the eligibility age for Medicare. Obama had moved in that direction last year in a failed attempt to craft a “grand bargain” with Boehner, considering an increase phased in over time.

“It will do great harm to our economy and millions of seniors to raise the Medicare eligibility age or enact other significant cost-shifting alternatives,” the lawmakers wrote.

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House Minority Leader Nancy Pelosi (D-San Francisco) was blunt. “Don’t even think about raising the Medicare age,” she said at a news conference Thursday, a day after an opinion piece she wrote appeared in USA Today. Pelosi left little wiggle room for the president, writing that raising the eligibility age “betrays the bedrock promise of Medicare.”

Rep. Chris Van Hollen, the top Democrat on the House Budget Committee, has been in regular contact with administration officials involved in talks with Republicans. Van Hollen, of Maryland, said the White House was “doing a good job of keeping members of Congress informed consistent with the need to preserve the integrity of their discussions with the speaker,” and that members “have confidence that the president is fighting for the priorities he talked about during the election.”

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“I should also say,” he added, “we have let our members know that they should feel free to express their views directly to the president and to the White House, and they’re doing that.”

Democratic senators weighed in at a lunch Thursday with Gene Sperling, director of the White House’s National Economic Council.

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“We all understand compromise involves things we may not like — we understand that,” Sen. Benjamin L. Cardin of Maryland said. “But I think there are certain parameters that we made pretty clear.”

One is raising the Medicare eligibility age, now 65. Republicans have pushed to increase the age over time to 67. Sen. Richard J. Durbin of Illinois, the Senate’s No. 2 Democrat, said that such a move was “not on the table.”

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Some Democrats, though, have signaled an openness to changes, such as charging higher Medicare premiums or curtailing health benefits for wealthier elderly people.

The White House sees the president’s challenge as a matter of capitalizing on his reelection victory, convincing not only Republicans but also wary Democrats that Obama has a mandate to negotiate a deal that raises taxes on the wealthy and also cuts spending on entitlements.

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Obama has held several campaign-style events to build public support, and White House officials acknowledge they are partially aimed at providing cover for Democrats.

The White House doesn’t have to convince Democrats the public will welcome a deal that includes higher tax rates on the wealthy. Polls show most people are behind the idea.

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But aides to the president believe they can sell the country, and fellow Democrats, on a deal that also includes some Republican priorities precisely because it would reflect a bipartisan compromise.

After a contentious four years capped by an acrimonious election season, Americans want to see that “finally, Washington is working,” said one advisor, who was not authorized to speak publicly about White House strategy. A deal that includes changes to entitlement programs would be a credible piece of evidence.

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That doesn’t mean that Obama has to go as far as raising the eligibility age for Medicare. He was open to discussing it a year and a half ago, but then he was in a more vulnerable political position.

Fresh off his reelection and Democratic gains in Congress, Obama might shift back to a less dramatic approach, such as charging wealthier beneficiaries more for healthcare services.

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Although Obama isn’t publicly ruling out an eligibility-age change or anything else, one aide said he was taking care not to “overstate” with Republicans what he thinks he can deliver in the way of Democratic support for changes. Democratic votes may be the key to ensuring passage in the House given the likelihood of defections by members of the Republican majority.

Rep. Barney Frank, a retiring Democrat from Massachusetts, noted that Republicans not only wanted to raise the eligibility age for entitlement programs, but they also want to reduce annual cost-of-living adjustments. “The Democratic caucus would erupt. I don’t see the president buying into them,” said Frank, ranking member of the House Financial Services Committee.

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Obama has been conspicuous about consulting with Senate Majority Leader Harry Reid and Pelosi before and after meeting with Boehner. White House staffers also conduct sessions with their counterparts in House and Senate offices.

The White House has kept the talks under wraps but is quietly making sure Democratic lawmakers know about the discussions.

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“He’s very mindful, and the whole team is, about making sure that Harry and Nancy are integrated” into the conversations, said a senior administration official.

When Obama ventures out of the White House to talk about the budget, he is broadcasting a subtle message to rank-and-file Democrats, as well as the Republicans he is trying to pressure: When a deal is reached, he can sell it to the American people.

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[For the Record, 10:18 a.m. PST  Dec. 17: This post has been updated to include Boehner’s latest offer to Obama.]

christi.parsons@latimes.com

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michael.memoli@latimes.com

kathleen.hennessey@latimes.com

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Lisa Mascaro in the Washington bureau contributed to this report.


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