Politics & Policy

Fear and Loathing in Boca Over Budget Cuts


When President Barack Obama says he’s willing to take “significant heat” from Democrats who don’t want Social Security and Medicare cuts to be part of a debt deal, he doesn’t mean Harry Reid or Nancy Pelosi. He’s talking about guys like Mel Safra, 70, owner of Bagel Time in Miami Beach. “It’s very sad,” says Safra, who wanted to retire by now but puts in 12-hour days at his kosher bakery, “this idea that you can take away money from the elderly who’ve worked for 40 or 50 years.” Safra thinks Obama has mismanaged the budget in a way that has jeopardized retirement benefits—so much so that he’s thinking of voting Republican in 2012.

Everything is up for grabs in traditionally Democratic Miami Beach these days, as well as in other Sunbelt precincts where retirees and would-be retirees are nervously watching the debt ceiling negotiations in Washington. Party lines and entrenched positions are being crossed and dug up left and right. While Democrats such as Safra are considering pulling the other lever, some older Americans are asking whether it’s time to rethink Social Security and Medicare. Joan Schlossberg, a new retiree who lives just north of Boca Raton, isn’t happy about proposed reductions to the programs, but she says her bigger worry is what will be left of the entitlements for her progeny. “This affects our children and their children. Older parents—how can they plan on retiring?” she asks. The former public university staffer, a staunch Democrat, says she is willing to sacrifice to ensure future generations don’t lose out.

The chatter in South Florida echoes the debate over the past week in Washington, where many lawmakers are exploring compromise to make sure they aren’t left on the outside when a deal is eventually reached. Even House Majority Leader Eric Cantor (R-Va.), who has led the opposition to tax increases, arguing that they are “the wrong policy to pursue with so many Americans out of work,” said the bipartisan deficit-cutting plan of the Senate’s Gang of Six includes “some constructive ideas to deal with our debt.”

There’s a creeping realization that everything is suddenly in play, both out of political necessity and intergenerational fairness. Budget negotiations between Congress and the White House include wrangling over $350 billion in potential Medicare and Medicaid savings over 10 years.

South Florida is emblematic of the new political realities. Experiencing the worst of the real estate bust, high unemployment—Miami-Dade County’s jobless rate now stands at a record 13.4 percent—and packed with seniors, the area is a political testing ground for hard questions that increasingly will confront the rest of the nation.

Representative Debbie Wasserman Schultz, the powerful Democratic National Committee chair who represents much of South Florida north of Miami, is not yet keen to break with the old talking points on Medicare and Social Security spending. “We should start by getting rid of tax breaks for millionaires and billionaires and for oil companies making record profits,” she said in an e-mail to Bloomberg Businessweek. “What we cannot do is attempt to balance the budget solely on the backs of seniors, children, and the middle class.”

The congresswoman’s tough line reflects the long-held views of retirees such as Jerome Radtke. The scooter-bound 72-year-old, a recent transplant to Miami, simply refuses to believe that anything will happen to the social programs he relies on. “Social Security,” he says, “will always be around. They won’t do away with it, because it’s one of the few government programs that actually works.”

Other elderly Miamians are more worried than Radtke—and more confrontational. David Lifschultz, a Miami Beach resident, takes a break from a tennis game in the 97-degree heat to warn of a political backlash against any meddling with entitlements. “It could be that 50 million seniors rise up, stronger than the Tea Party,” he says. “Call it the Gray Party!”

These are the people Democratic members of Congress fear when they hear Obama talking about laying social programs on the negotiating table. “It’s impossible to exaggerate the paranoia among Democrats that Obama will throw them under a bus in an effort to get a deal that boosts his reelection prospects,” says Gregory R. Valliere, chief political strategist with the Potomac Research Group. Capitalizing on those fears, the Democratic Senatorial Campaign Committee, which raises funds for candidates, has vowed in a mailing to make Republican plans to cut benefits “THE issue in the next election.”

It’s true that budget cutters may have a tough time convincing voters they know what they’re doing. National polls show most Americans still favor leaving Social Security and Medicare untouched. In June the Pew Research Center found that only 32 percent of respondents thought cutting the federal budget deficit was more important than keeping Social Security and Medicare benefits as they are. Yet in 1995, only 24 percent of respondents thought so. Quoting the conservative Heritage Foundation, even the AARP concedes on its website, “Every course of action is going to include significant changes for someone 50 and older in their relationship with the federal government.”

“Used to be that nothing would send your congressman into fight mode like the thought that constituents wouldn’t be getting their promised benefits,” says Patricia E. Dilley, a professor at the University of Florida School of Law and former staffer on the House Ways & Means Committee subcommittee on Social Security. “That calculus is changing.”

The bottom line: Putting Medicare and Social Security cuts on the negotiating table endangers Democrats’ electoral prospects, particularly in Florida.

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Farzad is a Bloomberg Businessweek contributor. Follow him on Twitter @robenfarzad.
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Coy is Bloomberg Businessweek's economics editor. His Twitter handle is @petercoy.

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