CFL News
January 30, 2013

No entitlement cuts, say two U.S. reps

U.S. Reps. Jan Schakowsky and Bill Foster joined labor leaders, senior citizen advocates and policy experts to stand up for Social Security, Medicare and Medicaid in federal budget negotiations

Source: Crain's Chicago Business

By Greg Hinz

Labor leaders and two Chicago-area members of Congress said Tuesday that they oppose benefits cuts of any kind in Medicaid, Medicare and Social Security — a stark illustration of just how hard it will be to reach a lasting fiscal compromise in Washington.

In a pushback of sorts from the Democratic left, the heads of the Illinois and Chicago federations of labor were joined by U.S. Reps. Jan Schakowsky and Bill Foster in saying the solution to the federal budget deficit is to be found not in hurting the middle class but in closing "loopholes" for the rich and corporations and perhaps cutting payments to health care providers.

But, under questioning, Mr. Foster conceded that Democrats might have to give some on benefits cuts to get a deal with Washington Republicans.

In a press conference at the Chicago Federation of Labor offices, national AFL-CIO Policy Director Damon Silvers took a very hard line.

"There can be no cuts to benefits in this (Republican) fiscal hostage-taking. None," he declared. Washington needs to consider items such as "a small Wall Street sales tax" and cracking down on companies that ship their profits overseas, he said.

Ms. Schakowsky, an Evanston Democrat, heartily agreed.

"Seniors are basically poor as a class, and rich people are rich," she said, asking, "Why go after the seniors" and the health care programs they depend upon?

The congresswoman said the average Social Security beneficiary gets only $14,000 a year, and millions of Americans have little retirement savings, while corporate CEOs who have been active in one Washington cut-spending group are in position to collect an average of $100,000 a month when they retire.

The health programs could be better run and save money if, for instance, some providers got less and the federal government was allowed to bargain with pharmaceutical makers over price. But citing a recent poll, she said she, like most Americans, opposes "any cuts in benefits."

Mr. Foster, a Democrat who represents the relatively moderate Naperville area, echoed some of those thoughts, noting that the country would be far better off if its tax code put money in the hands of middle-class people rather than giving it to overseas investors. Beyond that, the famed Simpson-Bowles compromise budget-cutting plan of a few years ago put far more emphasis on spending cuts relative to big Washington budget deals in the past, he said.

"I don't support" benefits cuts, he said. But given Washington realities, “it is likely that some, hopefully small, cuts in the programs will be necessary."

President Barack Obama so far has resisted putting cuts in entitlement benefits on the table, and events like today's are designed to keep him from doing so. But without some, Republicans may have little incentive to bargain, since they just agreed to repeal the Bush tax cuts for high-income groups.

Follow Greg on Twitter at @GregHinz.