McCarthy Agrees Not to Cut Social Security, Medicare in Debt Talks, Manchin Says
Democratic Sen. Joe Manchin, the West Virginia centrist, played a key role in an evenly divided Senate over the last two years. Democrats may have gained a seat in the Senate, but Manchin appears to still be right in the middle of critical policy talks.
While other Democrats have rejected the idea of negotiating with Republicans over raising the debt limit, Manchin has urged the White House to engage in talks, and on Wednesday the senator himself met with House Speaker Kevin McCarthy (R-CA) to discuss the issue.
Manchin told reporters afterward that McCarthy agreed not to include cuts to Social Security and Medicare in his upcoming — though as yet unscheduled — talks with President Joe Biden. “He was very receptive and wants to negotiate and wants to sit down and talk,” Manchin said. “My sense is Kevin McCarthy wants this place to work. He doesn't want to go through this theatrics to the point to where we have come to the cliff and how much damage is done by getting to the cliff.”
Manchin said earlier this week that he thinks the debt ceiling provides a good opportunity to talk about important fiscal issues, though he’d prefer not to include cuts to Social Security and Medicare. “No cuts to anybody that's receiving their benefits, no adjustments to that. They've earned it. They paid into it. Take that off the table,” he told CNN last weekend. “But everyone's using that as a leverage.”
At the same time, “We have to negotiate,” Manchin said. “This is the democracy that we have. We have a two-party system, if you will, and we should be able to talk and find out what our differences are.”
In order to increase revenues for these key programs, Manchin has proposed raising the income limit on the payroll tax, an option favored by many Democrats. “Social Security and Medicare basically is running out of cash because we stop at a certain level where people pay into FICA,” Manchin said, referring to the payroll tax. “[T]he easiest and quickest thing we can do is raise the cap.”
Conservatives push for big cuts – and a showdown: A group of conservative senators including Rand Paul (R-KY), Ron Johnson (R-WS), Mike Braun (R-IN) and Rick Scott (R-FL) on Wednesday urged House Republicans to consider across-the-board spending cuts as part of their negotiations over the debt ceiling— including cuts in defense. “We have an opportunity here,” Paul told reporters. “Republicans have to give up the sacred cow that says we’ll never touch a dollar in military” spending. “Everything would have to be looked at across the board,” he said.
Sen. Ted Cruz (R-TX) said that GOP senators want Republicans to use the debt ceiling as leverage in their negotiations. Cruz cited the formal rules of the Republican conference, which he said call for using “the debt ceiling as leverage to force real and meaningful structural reforms to fix the underlying problems,” suggesting that a showdown could be part of the strategy.
Still, there are more moderate Republicans looking for fiscal reforms that won’t involve huge spending cuts or big confrontations, Bloomberg’s Mackenzie Hawkins reports. Ideas under discussion include limiting growth in the debt ceiling to growth in GDP and indexing spending growth to inflation, as well as modest cuts to discretionary spending.
Rep. Don Bacon (R-NE) backs the indexing idea. “It would be a compromise, I believe, that you can get many people on board,” he told Bloomberg. “Democrats and Republicans. Because you’re not making draconian cuts, but you’re reducing spending. It’s under inflation, so in the long run, you’re pointing the ship in the right direction.”
Bacon has also called for a joint committee to address funding for the Social Security and Medicare trust funds, a proposal that could gain traction across party lines. Sen. Mitt Romney (R-UT) is working on a bill backed by Manchin that would set up “rescue committees” to address shortfalls in the major entitlement programs that could spark payment cuts for beneficiaries in upcoming years.
“We want to make sure we don’t ever cut Social Security benefits,” Romney said Tuesday. “We need to make sure that we do not reach that point [of automatic spending cuts], and that’s what this bill does.”