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Democrats' Social Security Message Is Muddled In Harry Reid, Nancy Pelosi Statements

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FILE - In this July 26, 2012 file photo, House Minority Leader Nancy Pelosi of Calif. meets with reporters on Capitol Hill. (AP Photo/J. Scott Applewhite, File) | AP

WASHINGTON -- The Democratic leader of the U.S. Senate repeated Wednesday morning that he opposes including Social Security in budget negotiations to avoid the so-called fiscal cliff coming up at the end of the year.

"I have made it very clear, I have told anyone that will listen -- including everyone in the White House, including the president -- that I am not going to be part of having Social Security as part of these talks relating to this deficit," Senate Majority Leader Harry Reid (D-Nev.) told reporters at the Capitol.

At the same time, on the other side of the building, the top Democrat in the House of Representatives didn't shut the door on Social Security in deficit talks.

"Our commitment as Democrats is that we believe Social Security and Medicare are pillars of economic and health security for America's seniors," House Minority Leader Nancy Pelosi (D-Calif.) said during a press conference. "They should not have cuts made to them in order to give tax cuts to the rich. Any adjustments we would make in them would be to make them stronger, as we did in the Affordable Care Act."

Nancy Altman is co-chair of an advocacy group called Social Security Works, which opposes any effort by congressional leaders to include Social Security in budget talks. Altman deemed Pelosi's remark a bit too wishy-washy.

"The comment is ambiguous," Altman said. "Harry Reid's statement is much more straightforward and clear: As he states plainly, Social Security should not be part of the budget talks."

At the end of December, a host of tax hikes and spending cuts are scheduled to take effect. During high-stakes budget negotiations last year, President Barack Obama and congressional leaders weighed changes to Social Security and Medicare, programs that provide financial support and health insurance for seniors, in exchange for tax increases on the wealthy. The "Grand Bargain" fell through, but many observers expect a similar deal to return to prevent the fiscal cliff.

Part of the 2011 deal adopted recommendations from the leaders of President Obama's National Commission on Fiscal Responsibility and Reform, which suggested changes to Social Security that included a less-generous formula for calculating annual benefit increases designed to keep pace with inflation. Erskine Bowles, one of the deficit commission's co-chairs, has encouraged leaders to include Social Security in any upcoming deal -- and so has House Speaker John Boehner (R-Ohio).

The Social Security Administration provides average monthly benefits of $1,130 to 56 million Americans, mostly seniors. According to the most recent data (PDF), the program will run out of money in 2033, at which point incoming payroll tax revenue will be enough to cover 75 percent of benefits. But the program's finances are counted separately from the rest of the federal budget, a point Reid has stressed repeatedly.

"Social Security is not part of the problem," he said on Wednesday. "That's one of the myths the Republicans have tried to create. Social Security is sound for the next many years. But we want to make sure that in the outer years, people are protected also, but it's not going to be part of the budget talks, as far as I'm concerned."

Altman said Congress ought to wait until the fiscal cliff is sorted out before it addresses Social Security, partly because changes to the tax code could affect how Social Security Administration actuaries project the program's finances.

"Social Security is projected to be fully solvent for the next two decades," Altman said. "Waiting a few months, once these other issues have been resolved, is the prudent course of action."

Mike McAuliff contributed reporting.

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