WASHINGTON — Democrats in Congress, including members of Massachusetts’ delegation, were unhappy Tuesday to learn that President Obama may be willing to trim future Social Security payments as part of a budget deal. But with little progress in meeting a Jan. 1 deadline, even liberals in the party did not rule out such a reduction in a New Deal centerpiece.
Some suggested that targeting Social Security might be the lesser of two evils, compared with the other major idea for entitlement program cuts that has been floated in Washington: raising the Medicare eligibility age from 65 to 67. House minority whip Steny Hoyer said Tuesday that raising the Medicare age is a “much more sensitive’’ issue.
As part of negotiations with Republicans, Obama has raised the possibility of changing the inflation index used to calculate automatic, annual increases in Social Security benefits. The new formula, which some people say is a more accurate measure of inflation, would provide for smaller annual increases. In 2010, the Congressional Budget Office estimated the net result of the change would be a 3 percent lifetime benefit reduction when measured against current projected growth.
Representative Jim McGovern of Worcester left a House Democratic caucus meeting in an unhappy mood after listening to briefings on the negotiations, including the White House position on the inflation index, which is called the “chained CPI.’’
“Asking Donald Trump to pay a dollar more is not the same as taking something away from an old lady or an old man in my district who is just squeaking by,’’ McGovern said.
But despite what he considers an unfair proposal, he was not prepared to say how he would vote on a final package that included the new Social Security inflation index, whether or not it was linked to tax hikes on the rich: “I don’t want to answer that question yet.”
“We have to wait until we see the whole package,’’ said Representative Niki Tsongas, Democrat of Lowell. “We know we have to protect Social Security for the long term.’’
Another Democratic representative, Gerry Connolly of Virginia, marched out of the Democrats’ caucus room at the Capitol and declared in a loud voice: “We don’t like the chained CPI!’’
In the Senate, Democrat Carl Levin of Michigan expressed a willingness to consider Social Security payment revisions, even though it would be “a problem with Democrats.’’
“I want to look at the whole package,” he said. A mitigating idea making the rounds among Democrats Tuesday was to impose the reduced inflationary adjustments on recipients who could afford it, while preserving the old formula for the neediest senior citizens.
The AARP opposed the move, saying it would disproportionately harm the oldest Americans. Outside the Capitol, unions and liberal groups gathered to support higher taxes for the rich and to urge Congress to protect Medicare and safety net programs.
In a statement, Richard Trumka, AFL-CIO president, urged Congress “to reject any cuts to Social Security, Medicaid, or Medicare benefits, regardless of who proposes them.’’
But Americans have signaled they want compromise in Washington. And the emergence of the Social Security issue on Monday night appeared to be a major step forward in the negotiations, a concession by Obama to Republicans who have demanded entitlement cuts in exchange for tax hikes on the rich. House Speaker John Boehner said over the weekend that he was prepared to raise taxes on people who make more than $1 million, and Obama raised his threshold for tax increases from $250,000 to families making $400,000.
The negotiations, which made halting progress for weeks before accelerating in recent days, appeared to slow once more on Tuesday after Boehner pledged to introduce a bill in the House that would codify his proposal to cut taxes for everyone but millionaires. Democrats dubbed that move a nonstarter and said that while Boehner’s gambit could strengthen his hand in negotiations it also would waste valuable time as the clock ticks down on the fiscal cliff — the name given to what will happen if a budget deal is not reached by the new year.
On Jan. 1, all Bush-era tax cuts are scheduled to expire and automatic spending cuts are scheduled to be imposed. The combined $500 billion hit to the economy could send it into another recession. Lawmakers are also growing worried about the lack of action on extending unemployment benefits for the long-term jobless and the annual required update for the alternative minimum tax. Boehner’s staff, advocating for the speaker’s new strategy, pointed out that House minority leader Nancy Pelosi and Senator Chuck Schumer are two prominent Democrats who have proposed extending tax cuts for everyone earning below $1 million — a similar proposal to the speaker’s.
But just as Obama and Democratic leaders may have trouble winning over liberals on entitlement cuts, Boehner will have trouble winning support among conservative House Republicans for a tax increase — even if it is limited to millionaires. Representative Jason Chaffetz, Republican of Utah, said he is not ready to support Boehner’s plan. ‘‘I didn’t see enough specificity to support it,’’ Chaffetz said, according to the Associated Press.
Changing the inflation index for Social Security is a relatively small administrative matter compared with increasing the Medicare eligibility age and imposing other more complex cost-reducing measures that probably will not be taken up until next year.
Although the index switch is on the list of GOP demands, it would not have a major impact on reducing deficits, advocates contend. The Social Security trust fund is projected to be solvent until 2033. The Congressional Budget Office has said changing the inflation index would give Social Security an extra four years of solvency. The Medicare trust fund would appear to be in more urgent need of attention, with a projected insolvency date of 2024. Opponents of the change to Social Security say it is simply a bargaining chip and does not represent sound policy.
“The Republicans just want a piece of flesh to vote for a tax increase, and this is a notable one,’’ said Mike Konczal, a fellow at the Roosevelt Institute, a New York organization that is dedicated to defending the policies of President Franklin D. Roosevelt, who won passage of Social Security in 1935.