Nothing Grand about Proposed Social Security Bargain, Unions Say

The AFL-CIO and allies held rallies in nearly 100 cities Thursday to head of threats to Social Security, Medicare and Medicaid by newly re-elected President Obama and the lame-duck Congress. Photo: Jennifer Kenny.

This article was originally published on November 8, 2012.

After months of campaigning vigorously for President Obama, unions made a “hard pivot” today and jumped into action to head off threats to Social Security, Medicare, and Medicaid.

The AFL-CIO and allies planned picket lines and other actions in close to 100 cities demanding that the lame-duck Congress keep hands off.

Backers of the popular programs fear Congress will reach what Obama and others have called a “grand bargain”: cuts to “entitlement” programs in exchange for letting the Bush-era tax cuts for the wealthy expire December 31.

Obama’s statements on the popular programs have been less than reassuring. In the first candidates’ debate he said his position on Social Security was “somewhat similar” to Mitt Romney’s. Demonstrating his usual fondness for bipartisanship, Obama said the program needs “to be tweaked the way it was by Ronald Reagan and Democratic Speaker Tip O'Neill.” Those 1983 changes raised the retirement age from 65 to 67.

Even before the election, AFL-CIO President Rich Trumka warned fellow unionists to get ready: “A bipartisan group of senators who are not up for reelection is working behind closed doors in Washington to reach a so-called grand bargain that … ignores the views of voters,” he wrote in an October editorial.

Won’t Get Fooled Again?

When Obama was first elected president, union leaders took a "follow the leader" approach to the administration. The president’s agenda turned out to include a watered-down health care bill and no labor law reform. Trumka seems determined not be caught flat-footed this time, when long-cherished programs are on the chopping block.

AFL-CIO headquarters asked all affiliate unions to keep on hand their staff deployed for the election, to run today’s actions. Many international presidents’ first post-election messages mentioned the two elements of the grand bargain.

Retirees, union members, and allies are demonstrating at or visiting congressional offices, Social Security offices, and federal buildings. In some cases, as in Tucson, Arizona, they will accentuate the positive, thanking representatives for earlier pledges not to cut the programs.

In Grand Prairie, Texas, United Auto Workers Local 848 is hosting an event titled “The Election Behind and the Danger Ahead,” where retirees will attempt to impress on new Congressman Marc Veasey that he’d better remain accountable. The UAW worked hard to elect Veasey, said retiree chair Gene Lantz.

The state fed in Iowa is hosting four events, and President Ken Sagar says he expects to see not just retirees but also “postal workers concerned they're going to do something crazy to the postal service.”

In Cincinnati, 40 members and allies rallied outside the office of Republican Senator Rob Portman. Local AFL-CIO Secretary-Treasurer Doug Sizemore said members are phoning elected officials today with the same message.

Jenny Kenny of the AFL-CIO’s Alliance for Retired Americans said that when union members picketed outside an Orlando Social Security office, workers came out, spoke to the crowd, and said they would put “Don’t Cut My Social Security” signs up in their cubicles.

How to Slash

Nancy Altman, co-chair of the Strengthen Social Security coalition, outlined three ways “grand bargainers” might cut benefits: raise the retirement age, change the cost-of-living formula, and reduce the benefits of “higher-income” people, supposedly to make the program more progressive—granting fewer benefits to those who need them least.

Altman calls the last ploy a “poison pill,” a way to lessen support for Social Security long-term. In order to save a reasonable amount of money, she says, such cuts would have to affect not just those at the top but millions of beneficiaries further down the ladder. “To make it ‘work,’” she said—to save the billions both Obama and the Republicans are looking for—“it would have to affect the top 70 percent, not the top 2 percent.”

The fact that Social Security covers everyone is what has made it popular with everyone, Altman said. Decoupling what participants receive from their wages would move Social Security toward a subsistence-level benefit—more like welfare—and thus shrink its political support among middle and higher earners.

Instead, union leaders say, Congress should keep Social Security intact and fund it with higher taxes on the wealthy.