New Debt Talks for Obama, Congress as AARP Warns of Social Security Cuts

While President Obama’s nearly two-hour meeting with Congressional leaders on Thursday morning was “very constructive,” according to published reports, Obama plans to reconvene another meeting on Sunday with the same lawmakers in attempts to break a stalemate on efforts to raise the debt ceiling.

Published reports have also said that Obama is now willing to include cuts to Social Security and Medicare as a bargaining chip on a debt ceiling deal, although the White House has been quoted as saying those reports overstate the case. (See earlier AdvisorOne article on those reports regarding possible cuts.)

As Obama was meeting with congressional leaders on Thursday, the powerful lobbying group for retired Americans, AARP, urged the president and lawmakers to reject measures to cut Social Security and Medicare in any deal to raise the debt ceiling and reduce the deficit.

“AARP will not accept any cuts to Social Security as part of a deal to pay the nation’s bills,” said AARP CEO A. Barry Rand, in a statement. “Social Security did not cause the deficit, and it should not be cut to reduce a deficit it did not cause.” Continued Rand: “AARP is strongly opposed to any deficit reduction proposal that makes harmful cuts to vital Social Security and Medicare benefits.”

AARP’s move is somewhat surprising, because The Wall Street Journal had reported in a recent lengthy article that AARP was dropping its longstanding stance opposing cuts to Social Security and Medicare, and now supported such measures to reduce the deficit.

House Majority Leader Eric Cantor, R-Va., said in comments before the Thursday meeting with Obama that he believed the meeting marked “the final stage of discussions” to resolve the debt ceiling issue.

Cantor (left) said that discussions with Vice President Joe Biden had already yielded an agreed-upon blueprint “where there could be over $2 trillion in savings, consistent with what [Speaker of the House John Boehner’s] mandate is, which is what we are going to insist if we are going to vote for the debt ceiling increase.” But Cantor reiterated that “Republicans are not going to support tax increases.”

While Congressional leaders were meeting with Obama, the Senate was considering a bill introduced by Senate Majority Leader Harry Reid, D-Nev., S. 1323, which he said would require millionaires and billionaires to “make a more meaningful contribution to the deficit reduction effort.”

The bill’s subtitle notes that its intent is to “express the sense of the Senate on shared sacrifice in

resolving the budget deficit,” and cites the Wall Street Journal as reporting that the median pay of CFOs at S&P 500 companies increased 19% in 2010 to $2.9 million.

Senator Reid’s office told AdvisorOne that the full Senate will vote on the measure on Monday, July 11, at 5:00 PM.

“Republicans have already asked the poor, the middle class, children and seniors to make sacrifices to help get our fiscal house in order,” Reid said in a statement, “This legislation would reaffirm the Senate’s commitment to ensuring the extremely wealthy are asked to make similar sacrifices.”