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Warren, allies oppose Obama on budget compromise

Party liberals oppose a deal on entitlements

Senator Elizabeth Warren criticized the president’s offer to compromise with Republicans on Social Security cuts. Some New England lawmakers have joined in opposing such cuts.Jonathan Ernst/REUTERS

WASHINGTON — A united front among congressional Democrats helped President Obama beat back the GOP in the recent budget showdown. But in the next fiscal tussle, set to begin this week, Democrats may be heading toward a party split that could prevent a lasting deal to stop the constant threat of shutdowns and defaults.

Influential liberals, led by Senator Elizabeth Warren and other New England lawmakers, are fighting Obama’s offer to compromise with Republicans on changes to Social Security. The president has proposed the change in benefits in hopes of corralling Republican support for his budget and protecting the program from more sweeping cuts.


The key change he has proposed would reduce the annual cost of living increase for seniors, using a new economic inflation formula known as “chained CPI.’’

“Chained CPI is just a fancy way to say ‘Cut benefits for seniors, permanently disabled, and orphans,’ ” Warren said in an interview last week, repeating a rallying cry she has made in speeches and letters to supporters. “Our Social Security system is critical to protecting middle-class families, and we cannot allow it to be dismantled, inch by inch.”

“The president is dead wrong on this issue,” Senator Bernie Sanders, a Vermont independent who is one of the most liberal members of Congress.

Senator Sheldon Whitehouse, a Rhode Island Democrat, said he is “fully opposed” to Obama’s proposal. “We may lose, but it’s not going to be for lack of trying,” he added.

When Obama endorsed the idea in April as part of his proposed budget, he enraged liberal Democrats, who signed letters, demanded meetings with Obama, and held rallies.

The president has not backed down, including the offer as part of a spending plan that would end automatic spending cuts and raise some taxes, and Republicans are eager to include the proposal as part of a broader deal.


“Balance is a fundamental principle that this president has not only espoused, but put on paper in detailed proposals,” Obama’s spokesman, Jay Carney, said at a recent briefing.

Sanders and Whitehouse are both members of an official bipartisan budget committee that is packed with liberals. Warren, though not on the committee, will also wield significant pressure on the issue because of the large amount of influence she has on Democratic Party activists.

The negotiating committee was set up as part of a deal to end the 16-day government shutdown this month and to raise the nation’s debt ceiling. Both crises were set off by Tea Party Republicans’ insistence that Obama agree to gut or curtail his health care law as a condition of funding the government and raising the debt ceiling, threats Democrats successfully resisted.

The deal was reached just ahead of a deadline that left the country perilously close to defaulting on its debts, which could have severely damaged the world economy. But the deal only reopened the government through mid-January and only raised the nation’s borrowing authority through early February.

Lawmakers hoped to use the time they bought, and the negotiating committee they created, to reach a broader agreement on taxes, spending, and entitlements that has eluded Washington in recent years and left the nation in a cycle of periodic fiscal crises.

Senate majority leader Harry Reid has ruled out the possibility of a so-called grand bargain dealing with a major tax code overhaul and major entitlement cuts, but House Republicans are expected to pursue a change in the Social Security cost-of-living formula as part of a small- or mid-size bargain.


The negotiating committee is scheduled to begin meeting Wednesday, with a mid-December deadline for reaching a budget agreement.

Liberal lawmakers who oppose Obama’s efforts to compromise on entitlements say they are skeptical that any deal can be reached. Some say they remain open to compromise -- balancing spending cuts and new tax revenues — while at the same time insisting that Republicans are the ones who should move.

“There’s a reality check that is due on the Republican side,” Whitehouse said.

Proposals offered by liberal Democrats are not likely to bridge the gulf with Republicans. Warren and Senator Edward J. Markey of Massachusetts talked about raising money to trim the deficit and raise spending by eliminating tax breaks for oil companies and other corporate interests.

Warren declared herself shocked by Obama’s Social Security proposal in an April e-mail to supporters. She said last week that she would also resist any proposals to raise the eligibility age for Social Security and other plans that would reduce benefits.

“No one doubts where I stand on this,” she said.

Warren’s voice on the issue is key to liberals, and could put pressure on other Democrats to avoid compromising on the issue. Her six-minute floor speech on the role of government during the shutdown, for example, drew about 1 million views on YouTube, even though she had no official role in leading the Democrats’ case.


“Her speaking out will be an important marker,” said Adam Green, cofounder of Progressive Change Campaign Committee, a liberal political action committee. He added that negotiating on entitlement cuts is the Democrats’ biggest threat to fracturing its base.

Other Massachusetts Democrats, including Markey, agree with Warren on Social Security, which Democrats have long used to galvanize senior citizen voters in elections.

“People work for those benefits,” Markey said.

A main focus of negotiations will be deep across-the-board cuts known as the sequester, which are scheduled to get even larger in mid-January. Failure to reach a deal increases the risk of additional showdowns on keeping the government open and raising the debt ceiling to avoid default on the nation’s debts.

Democrats want to replace the sequester cuts of about $100 billion a year with a combination of new taxes and targeted cuts.

Many Republicans want to spare the newest round of military cuts set to begin in January, but some consider the sequester, which lasts for a decade under the law, a good way to lock in spending cuts from reluctant lawmakers.

And Republicans are dug in against any tax increase, believing they already gave ground in the New Year’s deal to end Bush-era tax cuts for individuals earning $400,000 or more a year. Obama also raised taxes on investment income for high earners to raise money for his health care law.

Additional taxes are “pretty much a non-starter,” said Representative Tom Cole, an influential Oklahoma Republican who will serve on the bipartisan budget panel.


Cole, like other Republicans, is taunting Democrats to back the Social Security changes in Obama’s spending plan, but without any of Obama’s proposals to raise additional taxes or revenues.

“To me, that’s where a bargain can be struck,” Cole said. “But the idea that we have to pay the Democrats to do what’s in the president’s own budget, I don’t know why we’d have to do that.”

Liberals at odds with the White House plan have also tweaked the president. Sanders has been promoting a bill he introduced this year that would raise Social Security withholding taxes significantly on those earning more than $250,000 a year, who currently do not pay Social Security taxes on the majority of their earnings.

His 11 cosponsors include Reid. But Sanders and his staff are fond of pointing out where they got the idea: Obama’s 2008 presidential campaign.

Still, some moderates are willing to discuss entitlement cuts, even if they do not like them.

Senator Angus King, a Maine independent who caucuses with Democrats and will be on the budget committee, said he would be willing to put them on the table to get a deal that includes other benefits and contributes to solvency.

He said that it is imperative that the sides compromise, despite the difficulties, to show Americans that government can still function.

Globe correspondent Mattias Gugel contributed to this report. Noah Bierman can be reached at nbierman@globe.com. Follow him on Twitter @noahbierman.