Pelosi cautious on Medicare, Social Security cuts
By ANDREW TAYLOR and DAVID ESPO
WASHINGTON (AP) - The top Democrat in the House declined Thursday to endorse cuts to Medicare and Social Security benefits proposed by Senate Democrats earlier this week. Minority Leader Nancy Pelosi also said a counter-offer from Republicans on the deficit "supercommittee" - it totals about $2.2 trillion - isn't bold or balanced enough because it lacks tax revenues.
"If it's going to be bold, that doesn't do it," Pelosi told reporters.
She also said she's "not making any judgment" about a plan proposed earlier this week by Sen. Max Baucus, which totals about $3 trillion in deficit cuts, including $400 billion in Medicare savings over a decade and Medicaid cuts of another $75 billion. The Baucus plan also would use a new inflation measure that would slow the annual cost-of-living increases in future Social Security benefits.
Pelosi says any plan has to be "big, bold and balanced" and that any willingness by her and other Democrats to change federal retirement programs depends on requiring the wealthy to pay higher taxes.
"It's not fair to say to a senior `you're going to pay more for Social Security and we're not going to touch a hair on the head of the wealthiest people in our country,"' Pelosi said.
The California Democrat made her comments after Republicans and Democrats on a deficit "supercommittee" swapped initial offers that left the two sides far apart despite weeks of secret talks.
The Republican offer would cut deficits by about $2.2 trillion over a decade, according to officials in both parties. About one-third of that would come from increases in items such as Medicare premiums, the sale of public lands and airport fees - measures that increase government revenue without raising taxes. The GOP plan also assumes that tax reform would generate economic growth that would also lift revenues.
The GOP plan would cut about $500 billion from Medicare over a decade and another $185 billion from Medicaid, these officials said.
By contrast, Democrats want $1.3 trillion in higher tax revenue, a similar amount in spending cuts and enough other savings elsewhere in the budget to reduce deficits by more than $3 trillion over the coming decade while financing a $450 billion jobs bill along the lines that President Barack Obama is recommending.
The officials who described the rival approaches did so on condition of anonymity, saying they were not authorized to provide details of the committee's confidential discussions. In private, each side also disparaged the other, providing yet another indication that the panel's deliberations have not shown significant progress.
More importantly, the two sides are at a fundamental impasse over taxes. Republicans insist that the panel won't increase revenues; Democrats say they can't agree to cuts to critical benefit programs like Medicare unless Republicans agree to new taxes.
The panel of six Republicans and six Democrats has until Nov. 23 to recommend deficit savings of $1.2 trillion. But in fact, most if not all of the decisions must be made by early next month to give the nonpartisan Congressional Budget Office time to render precise estimates on their costs on future deficits.
Whatever the committee recommends must be approved by both houses of Congress in December if lawmakers want to avoid automatic spending cuts of about $1 trillion across a range of federal programs.
There were signs of Democratic dissension one day after Baucus, D-Mont., outlined a proposal on behalf of his party's negotiators that included changes in large government benefit programs.
According to several officials, he called for $1.3 trillion in increased tax revenue over a decade, and $1.3 trillion in spending cuts. Another $1 trillion in savings would come from the presumed reduction of Pentagon costs in Iraq and Afghanistan and $500 billion more from a reduction in interest costs resulting from declining deficits.
Those savings would be on top of cuts that Congress approved earlier in the year of nearly $1 trillion.
For Democrats on the committee, it appeared that the most contentious of the items would slow the growth of monthly checks to recipients of Social Security and other benefit programs, curtail Medicare spending by $400 billion over a decade and Medicaid by another $75 billion.
Several Democrats said during the day that the presentation had the support of a majority of the six Democrats on the panel, leaving the impression that at least one, and possibly two, of the party's lawmakers had not signed on. They also stressed that Obama has previously endorsed each of the proposals they made, including the one to adjust the government's calculation for inflation in a way that curtails the growth of benefit programs.
Others suggested that Rep. James Clyburn, D-S.C., a member of the party's leadership, and Rep. Xavier Becerra, D-Calif., had not agreed to support the recommendations.
Aides to the two men would not confirm the accounts.
In contrast, Republicans appeared to avoid any ideological pitfalls in their counter-offer, pulling well back from a position that House Speaker John Boehner, R-Ohio, took earlier in the year in private talks with Obama.
In those discussions, Boehner and the president discussed legislation to enact tax reform that was assumed to result in economic expansion and increases in tax revenue of $800 billion over a decade.
(Copyright 2011 by The Associated Press. All Rights Reserved.)