GOP gives muddled response to Obama offer on entitlements

The Republican response to President Obama’s recommended changes to Social Security has grown increasingly muddy, underscoring the tricky spot the party faces on entitlement reform.

Speaker John Boehner (R-Ohio) and other top GOP lawmakers quickly embraced Obama’s proposal this week to slow the rate of inflation used for Social Security benefits as a modest move toward the entitlement reforms they have long sought.

But other Republicans, and activists like Grover Norquist, have raised questions about the higher tax bill that the “chained” consumer price index (CPI) could force on millions of households.

And while Norquist criticized the proposal from the right, the chairman of the campaign arm for House Republicans came at it from the left. Rep. Greg Walden (R-Ore.) blasted chained CPI and other entitlement proposals in Obama’s budget as a “shocking attack on seniors.”

The GOP replies illustrate the predicament party lawmakers face, after lobbying the White House for years to roll up its sleeves on entitlement reform.

Walden’s comments drew criticism from Boehner, and put some House Republicans in the awkward position of distancing themselves from the man charged with keeping their majority in 2014.

“I don’t think the president made an attack on seniors. I think Walden just misspoke on the issue,” Rep. Raul Labrador (R-Idaho) said. “But we have to reform Social Security, and I am open to all reforms of Social Security.”

At the same time, GOP lawmakers on Friday also pushed back on the White House’s assertion that chained CPI was a Republican idea, pointing out that the inflation change was not in the budget that House Republicans passed last month.

Top GOP officials like Senate Minority Leader Mitch McConnell (Ky.) had previously prodded Obama to get behind chained CPI, and the conservative Republican Study Committee did tuck the change into their most recent budget.

Several House Republicans, including senior members of the tax-writing Ways and Means panel, have also said they needed more time to study chained CPI’s impact on the tax code.

“The president is trying to say this draconian thing that no one likes is the Republicans’ fault,” Rep. James Lankford (Okla.), the chairman of the House Republican Policy Committee, told reporters on Friday.

“It’s not my plan,” Rep. Aaron Schock (R-Ill.) said about chained CPI. “This is the president’s plan.”

Under chained CPI, Social Security beneficiaries and military retirees would receive smaller checks than they otherwise would have. But because income tax parameters and provisions are also tied to inflation, the slower rate would also force some taxpayers into higher brackets.

In all, the Congressional Budget Office estimates that chained CPI would save some $340 billion over a decade — $216 billion in reduced spending, and $124 billion in new revenues. The Urban-Brookings Tax Policy Center has also estimated that households making under $200,000 a year would contribute around three-quarters of the extra revenues under chained CPI.

Given those impacts, the proposal has drawn critics on both the left and the right, with liberals complaining that the president is trying to balance the budget on the backs of seniors who have already paid into Social Security.

Norquist suggested on Friday that the White House was trying to lure Republicans into backing a “hidden tax increase” with just a baby step on entitlements.

The founder of Americans for Tax Reform has also said that a standalone chained CPI measure would violate his group’s anti-tax pledge, which has been signed by the vast majority of congressional Republicans.

Some GOP lawmakers were sympathetic to Norquist’s argument, and expressed concern that the White House budget could start reducing benefits for seniors on Social Security almost immediately. The House GOP budget’s heavily discussed overhaul to Medicare would only affect those 55 and younger.

“I’m very sensitive to the fact that you’re impacting current seniors in particular. It’s something I’m very hesitant to jump up and down and support,” Rep. Tom Reed (R-N.Y.), a Ways and Means member, told The Hill. “The tax brackets and the potential tax increases that represents to just average Americans — it’s something I think that is going to have a difficult time.”

Boehner has included chained CPI in his budget offers to President Obama, and has also said that the two parties should just go ahead and enact proposals like chained CPI where there’s bipartisan agreement. But because the Speaker’s proposals were never detailed to the full Republican conference, rank-and-file lawmakers said they never signed on to the change.

“Obviously we were not privy to the offers,” Schock said. “There was no conversation within our conference about whether we would support that.”

But other Republicans on Capitol Hill have commended the president for chained CPI, with some going as far to call the proposal little more than a technical adjustment. For the purposes of cost of living adjustments, chained CPI assumes that consumers will adapt to higher prices by buying less expensive goods.

“It’s something that is simply a correction,” said Sen. Dan Coats (R-Ind.). “Some people will label it as taking money away from them. We’re simply saying, it’s a fraction of what we need to do.”

Rep. Tom Rooney (R-Fla.) also said that among the views of chained CPI offered by Boehner, Norquist and Walden, he stood with the Speaker.
 
“For the president to come out with chained CPI, I agree with those who have said it’s a good first step,” Rooney said. “And I know that he’s getting heat from his own party, so you know that it’s sincere.”
 
The Florida Republican added that, while he respects Norquist, “I’ve given up a long time ago worrying about what people like Grover think when it comes to the future of this country.”

“When it comes to me doing my job, I have to look at much more than just a single issue and try to do what is best for my children and my district,” Rooney said. “If he’s going to say that this is a tax increase, and I think that it’s going to save entitlements, then Grover’s going to lose.”