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Fiscal Cliff Cuts: Democrats Divided Over Whether To Put Social Security 'On The Table'

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House Minority Whip Steny Hoyer (D-Md.), left, and House Minority Leader Nancy Pelosi (D-Calif.) leave a news conference on Capitol Hill in Washington, Tuesday, Oct. 2, 2012. (AP Photo/J. Scott Applewhite)
House Minority Whip Steny Hoyer (D-Md.), left, and House Minority Leader Nancy Pelosi (D-Calif.) leave a news conference on Capitol Hill in Washington, Tuesday, Oct. 2, 2012. (AP Photo/J. Scott Applewhite)

WASHINGTON -- Top Democrats in Congress on Tuesday signaled their willingness to consider cuts to social insurance programs as part of a broader budget deal, but members of the party seemed divided on whether Social Security should be included in negotiations.

President Barack Obama and congressional Democrats are seeking a deal with Republicans to replace the upcoming "fiscal cliff" -- the nickname given to simultaneous tax hikes and spending cuts scheduled for the end of the year -- with smaller tax hikes and spending cuts.

To achieve such a deal, Rep. Steny Hoyer (D-Md.), the second-highest ranking Democrat in the U.S. House of Representatives, said Tuesday that his party shouldn't rule out things like raising Medicare's eligibility age and reducing future cost-of-living increases for Social Security recipients.

"They've been on the table for some period of time," Hoyer said. "That does not mean that I'd be prepared to adopt them now, but they're clearly, I think, on the table."

Other Democratic leaders in the House echoed Hoyer, saying they'd be willing to consider cuts so long as Republicans relent on higher taxes on annual household incomes above $250,000.

"Democrats have always been willing to put everything on the table," Rep. Xavier Becerra (D-Calif.) said. "We'll sit down, have a balanced conversation and negotiation on everything, whether it's Medicare and all the rest, when Republicans decide that they're going to get off this dime saying we have to protect the wealthiest 2 percent of Americans."

"While we think everything should be on the table for discussion, we do have very deep abiding concerns about where cuts would be made specifically and how fair and balanced it is," Rep. John Larson (D-Conn.) said.

But a coalition of House Democrats began gathering signatures Tuesday for a letter to House Speaker John Boehner (R-Ohio) demanding that Social Security be left out of fiscal cliff talks. As of Tuesday afternoon, 87 House Democrats -- including Larson -- had signed on. The letter notes that Social Security's financing is counted separately from the rest of the federal budget, and that the program's actuaries estimate it can pay full benefits until 2033.

"Even though Social Security operates in a fiscally responsible manner, some still advocate deep benefit cuts and seem convinced that Social Security hands out lavish welfare checks," the letter says. "But Social Security is not welfare. Seniors earned their benefits by working hard and paying into the system."

Boehner's plan to avoid the fiscal cliff includes a change to the way the government measures inflation, which would make Social Security's cost-of-living adjustments less generous to the tune of over $100 billion over 10 years, according to the Congressional Budget Office.

Deficit hawks have long supported switching to a version of the Consumer Price Index that they say offers a more accurate measure of inflation. Advocates of the so-called "chained CPI" say it accounts for the way consumers alter their spending patterns when certain goods become more expensive. Rather than continuing to buy increasingly expensive beef, for example, some consumers switch to chicken.

Asked about the chained CPI on Tuesday, Larson, Becerra, and Hoyer said they didn't like the idea, but wouldn't rule it out. Hoyer's office said his willingness to consider Social Security changes was nothing new.

"Mr. Hoyer has consistently stated that Social Security should not be used for deficit reduction, but instead be considered on a separate track to ensure it remains strong for future generations," Hoyer spokeswoman Katie Grant said in an email. "He did not say he supported chained CPI. Mr. Hoyer's point was that in order to reach an agreement, everything -– including things we don’t like -– has to be on the table."

On the other side of the Capitol, Senate Budget Committee Chairman Kent Conrad (D-N.D.) said he would accept chained CPI "as part of an overall package, with Social Security being treated separately so its savings weren’t used for deficit reduction, the savings were used to extend the solvency of Social Security. “

But Senate Majority Leader Harry Reid (D-Nev.) has been adamantly opposed to including Social Security in a fiscal cliff deal. On Tuesday, when a reporter said Reid had been party to failed "Grand Bargain" negotiations in 2011 that included the chained CPI, Reid cut the question off.

"No. Don't say that I was willing to," Reid said. "I've never been part of that."

Sarah Bufkin contributed reporting.

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