Socialist senator at odds with Obama over veterans benefits

WASHINGTON — A few hours before midnight during a marathon budget session, Sen. Bernie Sanders of Vermont, the only member of Congress elected as a socialist, called for a vote on his proposal to oppose any cut in cost-of-living adjustments for veterans benefits.

With no opposition from senators on the floor, Sanders watched as his measure was unanimously adopted.

In this first salvo ahead of the next round of budget battles with the White House, score one for the real-life socialist; zero for the president who is often derided as one.

President Obama, however, was not dissuaded. His new budget would rein in cost-of-living adjustments not only for veterans benefits, but also Social Security and other entitlements that increase annually with inflation.

On Friday, Sanders vowed to “do everything in [his] power” to stop that from happening.

“My own view is, you don’t balance the budget on the backs of some of the most vulnerable people in this country,” the 71-year-old said in a recent interview. “The way you solve those problems is you raise more revenue in a responsible way.”

Using a lower Consumer Price Index, a measure of inflation, to calculate government benefits has gained backing from a bipartisan swath of Republicans and Democrats, making it a likely linchpin in fresh budget talks between the White House and Congress.

A slight downward shift would shave a little off monthly beneficiary checks — a few dollars each month — but amount to big savings for the government. The change would also apply to tax brackets, which would move upward at a slower rate and would yield more revenue as incomes rise with inflation.

Obama put the proposal on the table last year in talks with House Speaker John A. Boehner (R-Ohio), and he will send it to Congress in his budget on Wednesday.

Even as liberal fellow Democrats vociferously opposed the idea during private meetings with the president on Capitol Hill, House Minority Leader Nancy Pelosi gave it a nudge.

“Let’s take a look at that,” Pelosi, a Democrat from San Francisco, said last month. “I have to say, if we can demonstrate that it doesn’t hurt the poor and the very elderly, then let’s take a look.”

Economists argue that the government overestimates its annual inflation adjustment, using a formula that results in higher-than-necessary benefit increases each year, which cost the Treasury billions.

Obama wants to adopt a new method to calculate inflation, called “chained CPI.” The change could bring in $390 billion over the decade, according to estimates from the Moment of Truth Project, the bipartisan group headed by Alan Simpson, a retired Republican senator, and Erskine Bowles, a former Democratic White House chief of staff. That amount would come almost equally from trimmed benefits and increased tax revenue.

“Quite balanced,” the group called it in a recent report.

Critics, including AARP and veterans groups, say the approach would hurt the most vulnerable — elderly seniors on fixed incomes, for whom a slight reduction in benefits would be a hardship; and veterans, including those disabled from the Iraq and Afghanistan wars, or their spouses.

A $3-a-month loss, these opponents note, could amount to thousands of dollars lost over a lifetime.

In past proposals, the White House included a benefits “bump” to soften the impact for older seniors and the disabled, and will do so again in the president’s new budget.

Sanders, who is chairman of the Senate Committee on Veterans Affairs, won support for his nonbinding proposal in part because it was narrowly drafted to protect veterans. Few senators dared to resist.

Many, though, would support chained CPI as part of a broader deal.

As Obama’s chief opponent in the debate over how to adjust for inflation, Sanders — a political independent who considers himself a Democratic socialist — has taken an approach that polls show Americans prefer.

At a news conference last month, Sanders replayed a video clip of Obama in 2008, during his first run for president, vowing not to cut the cost-of-living adjustment.

“Well, this is the Barack Obama that I agree with,” Sanders said.

But the socialist senator and the not-socialist president are on a collision course.

Sanders confronted Obama on the issue during a closed-door Senate luncheon this month. Afterward, he acknowledged it would be an ongoing discussion.

lisa.mascaro@latimes.com