Labor angered by Obama's willingness to cut Social Security in debt ceiling deal

President Obama’s apparent willingness to discuss Social Security cuts in the debt-ceiling negotiations with Congress has angered labor unions and could cause them to withhold support for Democrats in the next election.

Press reports say President Obama is considering a proposal to change how Social Security payments are calculated by chaining payments from the program to the Consumer Price Index. That change would help bring down the national debt but would likely reduce benefits for retirees.

Unions are making it known that Social Security cuts are unacceptable to them and say they will lobby against any cuts to the popular entitlement program.

“I think this is a huge political mistake for Democrats,” Chuck Loveless, legislative director for the American Federation of State, County and Municipal Employees (AFSCME), told The Hill.

“There is no question that the senior vote moved heavily towards Republicans last election. Social Security, Medicare and Medicaid are bedrock issues to the Democratic base, and to the extent that there are significant cuts in these programs, Democrats will pay a political price.”

Loveless said several of the cuts and tax breaks under discussion in the debt ceiling talks trouble AFSCME.

The union lobbyist pointed to one measure that would extend the payroll tax cut in place for employees to employers as well. The tax is used to finance the trust fund that pays Social Security benefits.

“We view that as raiding the Social Security trust fund. Once you put these tax cuts into place, they are very hard to get rid of,” Loveless said.

The public sector union is not the only labor group concerned about cuts to entitlements.

On Friday, Mary Kay Henry, president of the Service Employees International Union, said her union would not accept cuts to Social Security.

“As the negotiations continue, Congress should also take cuts to Social Security off the table. Social Security has not added one penny to our deficit and should not be targeted as a means toward reaching a deal,” Henry said in a statement.

That followed a similar statement Thursday from AFL-CIO President Richard Trumka.

“At a time when retirement security remains an elusive goal for most Americans, cuts to Social Security benefits — in whatever form they take — should not be on the table,” Trumka said. “The AFL-CIO continues to oppose any cuts in Social Security, Medicare or Medicaid benefits, including any cuts in cost of living adjustments. The best solution to our deficit problem is to create good jobs that will rebuild our economy. That should be our first priority.”

Discussion of Social Security cuts is the latest chapter in what at times has been a frayed relationship between the White House and labor.

Unions were not happy when Bill Daley, an executive for banking giant JPMorgan Chase, was hired as White House chief of staff. They bristled last year when President Obama engineered a compromise with Republicans that kept lower tax rates for the wealthy in place. And the AFL-CIO and others in labor have outright opposed the Obama administration’s push to pass three long-awaited trade deals.

That animosity has been reflected in words as well as in action.

Trumka gave a speech to the National Press Club in May where he distanced his labor federation from Democrats. The labor leader said that their allies need to be more forceful in their defense of labor after the attacks unions have come under this year — best exemplified by the standoff in Wisconsin over public workers’ collective bargaining rights — or they could lose labor support.

An analysis by the Center for Responsive Politics shows that unions’ political action committee contributions to candidates have declined almost by half — from more than $8.4 million in 2009’s first quarter to now nearly $4.8 million in this year’s first quarter. One major union, the International Association of Fire Fighters, announced earlier this year that it would suspend its political giving indefinitely.

Signing off on cuts to Social Security could lead to less political support for the president and the Democratic Party as they move into the 2012 election season. Some unions say the issue is a litmus test for whether a candidate will earn their support.

“We will not endorse anyone if they believe we should cut Social Security,” said Karen Higgins, co-president of National Nurses United.

Higgins would not go as far to say if that promise included President Obama, but that lawmakers in Congress and at the state level would lose the backing of the nurses’ union if they slashed Social Security.

“It is definitely our local leaders. It is definitely our congressmen,” Higgins said. “We have concerns about where the president is going and we are asking him to make better decisions for our seniors and working people in this country.”