Pelosi, Dems signal openness to Social Security changes

For the first time today, House Democratic Leader Nancy Pelosi did not rule out changing the way the government calculates annual cost-of-living adjustments for Social Security recipients. The possible change, adamantly opposed by progressives in the Democratic caucus, could make payments to retirees smaller.

As negotiations over deficit reduction and raising the debt ceiling continue, Pelosi reiterated today that Democrats are opposed to making cuts to Social Security benefits.

When asked if changing the Social Security formula for cost of living adjustments was a de facto benefit cut, Pelosi did not directly answer.

"No. Cutting benefits is exactly that. Cutting benefits," Pelosi said. "There's concern in my caucus about what would happen with the CPI (consumer price index). Some think it is a benefit cut, others do not."

But she reiterated that any savings from changing the CPI would have to go back to the Social Security Trust Fund.

Meanwhile, in the House Ways and Means Committee Friday, lawmakers grappled with the costs of Social Security and how to save it for future generations.

"Social Security has never contributed a dime to our national debt," said liberal Rep. Xavier Becerra, D-Calif., noting it has a nearly $3-trillion dollar trust fund to last it until 2036, according to the most recent estimates.

Rep. Sam Johnson, R-Texas, disagreed. All of Social Security's money is in bonds, which require the government to borrow money to redeem, he insisted.

Both, however, agreed that something has to be done.

Starting in 2037, benefits will drop to 77 percent of their required levels, as the system can only pay out what it takes in. For the third of seniors who have no other source of income, the impact could be significant.

"If we do wait until we're close to trust fund depletion," said Charles Blahous, a research fellow at the conservative think tank the Hoover Institute, "there's no historical president for closing that level of shortfall."

A panel of experts proposed a myriad of solutions. Raise the retirement age. Cut benefits for the well-off. Eliminate the cap on taxable wages.

Syl Schieber, former Chairman of the Social Security Advisory Board, proposed adjusting the CPI.

The consumer price index used to adjust benefits fluctuates with price changes in a fixed collection of products. But, Schieber argued, because people buy different items when others become more expensive, the index overstates the living costs for most seniors.

Joan Entmacher, vice president for family economic security at the National Women's Law Center, disagreed. Because seniors spend twice as much on health care as the general population, Entmacher argued, the current CPI actually understates their living costs.

While Pelosi said today that any savings from Social Security must be returned back to the program, Republican leaders today were also resolute about certain conditions.

GOP leaders made clear that any savings from closing tax loopholes should go to tax cuts elsewhere.

"It just does not make sense for Americans to suffer under higher taxes in an economy like this," House Majority Leader Eric Cantor told reporters today after the dismal monthly job numbers showed unemployment rising to 9.2 percent.

The resolution of both parties leaves the question of how members can actually hit deficit reduction goals of $2-4 trillion if a large chunk of savings -- either from closing tax loopholes and reforming entitlements --don't go to deficit reduction.

Though staffs will continue to work over the weekend to see how to breach the remaining divides, many of the negotiators have left town and will return Sunday to see if there is a realistic path forward for a big deal that reduces the deficit by up to $4 trillion.

It will be a heavy lift. House Speaker John Boehner said today that the two sided remain far apart on a deal. He said the problem is like a "Rubik's cube that we haven't quite worked out yet."

[ryanhn]

It seems to me that Democrats always cave to Republicans on the issue of taxes. Even when they were in power and wanted to repeal the Bush tax cuts they caved. They might as well get it over with and just agree with Republican demands for a spending cuts only deal now and put an end to this standstill. Mark my word, whether it's at the last minute or now the Democrats are going to cave.

[guycash]

Don't know why they have to change the index, we haven't gotten anything for 2 years.

[skeezix06]

Skeezix signals the certainty that a third party will get my vote when the democratic party throws away democratic values.

[slatep]

I'd be willimg to bet that if the incompetents and bull-heads that are running the government reduce Social Security payments and Medicare they will find out the true meaning of the word Gray "Panthers".

The million man marches on Washington will look like garden parties.

Along with Obama; this is probably the worst Congress the United States has ever had.

Bi-partisanship is so rampant and these people are so afraid of losing their cushy jobs and the bribes that come with them; they have accomplished absolutely nothing except passing the healthcare program (a disaster by any definition) and dither back and forth trying to score points for the next election.

It would serve all of them right if voters arbitrarily voted for whoever is running against them in 2012.

The crises in the US might get better or they might get worse.

But; in my opinion; they couldn't get much worse.

[RobAla]

Nancy "we need to pass the bill so that we can know what is in it" Pelosi is a nutcase. She shouldn't even be holding office after she and the other progressives crammed a horrible health care law down the throats of a majority of Americans who do not want it. She has been a disaster where ever she led during the terrible 111th Congress. I have had all I want to hear from her.

She helped create this mess, and tweaking Social Security will not fix the nation's woes. Politicians form both parties have mismanaged Social Security and Medicare to the point that both are on the verge of collapse. It is time they were replaced with practical people who will handle things in a rational manner.

[obboy2037]

Well if Nancy Pelosi had said what you imply (being that the "we" is Congress) you may have a point.

But since she was referring to the American people "when the cloud of misinfromation clears" ... she was correct!

So, you think opinion polls represent what the American people want, per your health care debate statistics?

Then you must know that the GOP must raise taxes on the wealthy and end tax subsidies to corporations ... as all the scientific opinion polling today states.

Do the American people only speak when they agree with you?

[slatep]

DITTO.!! DITTO.!! DITTO.!!

You got that right.

Pelosi is a disaster waiting to happen.

[FP1970]

Just keep letting in more immigrants from 3rd world countries who'll take more out of the system than they ever put in. That should fix social security. Viva amnesty!

[bajajohn1]

Eric Cantor needs to leave the planet peacefully...send him to the Moon. Cantor only knows one broken tune...no taxes for the rich. Someone needs to remind this clown the tax reductions for the wealthy have been in place for years and the rich still are not creating jobs. Does this guy Cantor live in a paralell world? So why doesn't the media ask Cantor that in light of the rich having their tax breaks...why aren't they producing jobs? Bet I know the answer...he will mutter 'regulations'. What is wrong with Republicans?

[sjc_1]

Income/net worth test both Medicare and Social Security. If you are wealthy you can take care of yourself.