WASHINGTON -- House Minority Leader Nancy Pelosi (D-Calif.) upset progressives last month when, amid the fiscal cliff debate, she said she backed the idea of cutting Social Security benefits by changing the way inflation is calculated for recipients.
But now Pelosi says she was bluffing, at least in part, to see how far Republicans would go in compromising on a deal.
"It was really to call the bluff of the Republicans' tactic," Pelosi said during a small gathering with reporters on Friday. "At what figure will you raise taxes on the rich? At what place do you keep moving the goalpost on entitlements?"
In the final weeks of fiscal cliff negotiations, President Barack Obama said he supported the idea of tying Social Security cost-of-living increases to a chained CPI, or chained Consumer Price Index. Social Security benefits are currently calculated by inflation rates. By changing the formula and instead calculating benefits with a chained CPI, the result would mean small cuts at first, but would eventually cost beneficiaries thousands of dollars over time, which is why Democrats have largely fought the idea.
It wasn't long before Pelosi had signaled she agreed with Obama on the issue, going as far as saying she viewed the cuts as "a strengthening of Social Security." But on Friday, Pelosi recalled that even she wondered at the time why Obama put the idea on the table at first. She said she only learned of his plan to float the proposal just before he made the offer to Republicans.
"Members asked me, and I wondered myself, 'Why would you put chained CPI and raising [the level for extending the Bush tax cuts] to $400,000 in the same bill? Taking from the poor and giving to the rich?" Pelosi asked, getting laughs when adding, "It turned out to be a very smart thing to do because [Republicans] came back with 'Plan B.'"
The "Plan B" proposal was a botched attempt by House Speaker John Boehner (R-Ohio) to get Republicans on board with the idea of letting the Bush tax cuts expire for people making more than $1 million. Boehner unexpectedly came up with "Plan B" after the White House made its counteroffer with the chained CPI concession and the $400,000 threshold for tax cuts. At that point, though, Boehner pivoted to "Plan B," which had such little support in his caucus that he ultimately yanked it from the floor schedule at the last minute because it lacked the votes to pass.
Pelosi gave credit to the White House for having the "clarity" to see that Republicans would blink once chained CPI was on the table with the $400,000 number, and not be able to counteroffer with another compromise.
"Once again they moved the goalposts, and they were right. They were right," she said of the administration.
Still, Pelosi said it wasn't all tactical maneuvering with the chained CPI offer. She noted that Bob Greenstein of the Center on Budget and Policy Priorities -- "a respected person in our midst" -- has advocated the idea, and said she remains open to it if people like Greenstein can make a good case to Democrats that it would be an effective way to reduce entitlement spending without hurting the very poor and very elderly.
"The fact is we do have to protect Social Security. We do have to protect Medicare. We do think there are ways where money can be put in that is there to help the people we're really concerned about [while savings can be found]," she said. "I do think that Bob Greenstein probably has some influence on even proffering that part of the deal in the administration."
"But there is no way to even consider chained CPI unless it mitigates any harm to the core [Supplemental Security Income] and very elderly," Pelosi added. "Put something out there, and let's see, would [Democrats] be willing to go along with this ... It may be something that would be okay."
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