Carolyn Lochhead, Chronicle Washington Bureau
July 13, 2011
Washington -- Issuing an ultimatum to a president of her own party, House Minority Leader Nancy Pelosi is betting that she can recapture the speakership in a high-stakes game of brinkmanship over raising the $14 trillion debt ceiling by Aug. 2.
The San Francisco Democrat has told President Obama that House Democrats will not vote for any trims to future benefits in Medicare or Social Security, even a tweak to the cost-of-living index to restrain benefit growth. Obama has made clear that he is open to cuts in entitlement programs.
But after being dismissed in Washington as largely irrelevant following the Democrats' loss of the House in November's elections, Pelosi now controls the precious Democratic votes Obama needs for a deal that would prevent a U.S. default that his Treasury secretary warned could be catastrophic.
Pelosi has framed her stand as "no benefit cuts in Medicare or Social Security" and emphasized that she has made that position known with "full clarity" to the White House.
Her ultimatum is the mirror image of the refusal by House Majority Leader Eric Cantor, R-Va., to accept any new tax revenue. That forced House Speaker John Boehner, R-Ohio, to walk away Saturday from a $4 trillion "grand bargain" with Obama that roughly would have cut spending by $3 trillion and raised revenue by $1 trillion over a decade.
"She sees that both Boehner and the president have the most to gain from such a deal," said Jim Manley, former spokesman for Senate Majority Leader Harry Reid, D-Nev. "So the card she's been playing is standing for the Democratic base and trying to pick off vulnerable Republicans next year over cuts to Medicare."
Failure to recapture the House in 2012 would probably end Pelosi's career.
Obama in the middle
Obama on Monday positioned himself squarely in the middle, pushing for "the largest possible deal" that would "defy expectations that we're always thinking in terms of short-term politics and the next election, and every once in a while we break out of that and we do what's right for the country."
(L-R) U.S. Rep. Laura Richardson (D-CA), House Minority Leader Rep. Nancy Pelosi (D-CA), Rep. Nydia Velazquez (D-NY), and Rep. Karen Bass (D-CA) listen during a news conference July 12, 2011 on Capitol Hill in Washington, DC. Pelosiand members of the Women of Democratic Caucus called on the Republicans not to cut the Social Security and Medicare benefits. Alex Wong/Getty Images
While Obama is appealing to the independent voters his party lost in droves in November, such a deal would require Pelosi and Cantor to relinquish their sharpest partisan weapons for 2012. Medicare and Social Security are the two largest middle-class entitlements with proven political potency.
Pelosi's relentless opposition to former President George W. Bush's plan to add private accounts to Social Security helped her win the speakership in 2006.
She lost her majority last year in part because Republicans accused Democrats of cutting Medicare by $500 billion over 10 years as part of the health care legislation. By positioning themselves as Medicare's defenders, Republicans won back the senior vote.
This year, Republicans in the debt talks are demanding as much as $25o billion in Medicare cuts over 10 years. House Republicans also voted earlier this year for a plan by Budget Committee Chairman Paul Ryan, R-Wis., to turn Medicare into a voucher program. Democrats see that vote as their ticket to winning back the House.
But Pelosi might be helping Obama by strengthening his bargaining position against Republicans and forcing them to compromise on taxes.
Many Democrats, already angry that Obama negotiated a two-year extension of the Bush-era tax cuts last year and agreed to sharp cuts in domestic programs this year, feel that he has given up too much in the debt talks. Pelosi's ultimatum provides the White House with a backstop.
"If the Democrats are too quiet, then the Republicans are sure to say, 'Gee, if Obama's walked this far, he can keep going,' " said Dan Seiver, a finance professor at San Diego State University. "The Republicans have to see that Obama has gone about as far as he can go, and at some point he has to say, 'I can't alienate my entire party because then we won't get this approved anyway' " without Democratic votes.
In purely budgetary terms, Pelosi's demand for zero changes to Medicare benefits is untenable. Medicare, Medicaid and Social Security consume 40 percent of the budget, and Medicare in particular is a key source of rising long-term deficits. Any serious deficit reduction "has to involve entitlements," Seiver said. "You just can't do it without that.
"In the end, this is their president and they want to keep him in 2012," he said of Democrats. "If he negotiates a deal, they're just going to have to swallow hard. What concerns me more is the Republicans. I'm not sure if they're posturing. They might be willing just to drive us off the cliff on Aug. 2."
During the first two years of Obama's presidency, Pelosi was his greatest ally, proving critical to enacting his controversial stimulus program and health care legislation.
Democrats lost 63 seats and their majority last November, the highest number of losses for any party since 1938. Most Washington hands expected Pelosi to retire. Instead, she stayed on and ran again to lead her party with the aim of recapturing the majority.
Carolyn Lochhead was the Washington correspondent for the San Francisco Chronicle, where she covered national politics and policy for 27 years. She grew up in Paso Robles (San Luis Obispo County) and graduated from UC Berkeley cum laude in rhetoric and economics. She has a masters of journalism degree from Columbia University. Twitter: @carolynlochhead