Groups Raise Alarm Over Social Security Tampering as Debt Panel Starts Negotiations

President Obama meets with the National Commission on Fiscal Responsibility and Reform April 27 in the Roosevelt Room at the White House. (AP Photo)

Interest groups are sounding the alarm that President Obama's newly created debt commission could start hacking away at Social Security benefits in the name of closing the budget gap.

As the 18-member panel held its first meeting, top executives from seniors groups and other organizations called for full transparency in its negotiations in the months ahead and urged the commission to consider the implications of putting entitlement programs on the chopping block. Some activists also criticized the commission's co-chairmen for planning to attend a fiscal summit Wednesday in Washington hosted by billionaire banker Peter Peterson, known for his criticism of Social Security.

"Social Security is important not just to seniors, but to their children and grandchildren," Donna Butts, director of Generations United, said in a written statement. The National Council of La Raza noted the importance of the entitlement program to Latino communities. Paralyzed Veterans of America noted the importance of the program to veterans.

Roger Hickey, co-director of the Campaign for America's Future, said in a statement that Peterson's summit on Wednesday is part of an "endless campaign to gut Social Security and Medicare."

The outcry underscored the controversy and suspicion surrounding the work of the commission, which is expected to hash out ideas for reducing the deficit and the soaring national debt, and produce a set of recommendations to Congress by Dec. 1. The commission already has stirred controversy over the possibility that it might recommend a national sales tax to raise revenue. It also is taking heat over charges that it will turn instead to spending cuts.

The co-chairmen of the commission, as well as the president, have tried to tamp down on the speculation about what the group will discuss, saying the country's fiscal problems are reaching a breaking point and that "everything" has to be on the table.

Co-Chairman Erskine Bowles said on "Fox News Sunday" that when it comes to the idea of entitlement program cuts, Democrats "have to" be willing to go along with them.

"If we're going to be serious about balancing the federal budget and righting this fiscal ship, then we have got to have everything on the table, and that includes the entitlement programs," he said. "We'll never get to balance unless they're on the table."

Prior attempts by the U.S. Congress to tackle Social Security -- known as the "third rail" of American politics -- have failed and stalled. Former President George W. Bush proposed a partial privatization of the system during his second term, but Congress did not move forward with the plan.

But Social Security is rapidly deteriorating, and the recession is making things worse. The Congressional Budget Office reported last month that the seniors benefits program will pay out more than it receives in taxes this year -- something that wasn't expected to happen for another several years. Also, the federal government for years has borrowed against the account's surplus, meaning there's no rainy-day fund to make up the difference as baby boomers starting soaking up more and more benefits.

Obama has said he does not want to raise the retirement age -- one possible way to move toward solvency -- but has spoken in favor of raising the cap on the payroll tax that funds the program.

He is not commenting specifically on what the debt commission might consider. But many groups are urging it to think twice before messing with Social Security in order to save other programs.

"Simply put, Social Security has not contributed one thin dime to the current deficit. It should not be used as a piggy bank to pay our way out of the fiscal hole we find ourselves in," said Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.

Seventy-seven groups wrote a letter to Bowles and co-chairman Alan Simpson urging them to air their proceedings on C-SPAN and publicly disclose the impact of their proposals on different demographic groups.

Rep. John Conyers, D-Mich., made a similar request, writing in a letter that the commission will make recommendations that "will impact every single American." He cited "our social safety net" among the programs up for consideration.

Simpson, a former Republican senator, said there are no sacred cows when it comes to taxes or spending because the minor economic comeback so far this year can do nothing to sustain the rate of debt.

"If that's the wind, that's got to be a sparrow belch in a typhoon. We can't grow our way out of this. Double rates the growth in 30 years wouldn't grow out of this," he said, adding that the United States is going to borrow to pay for war, homeland security, education and veteran benefits, not to mention the cost of obligations through Social Security, Medicare and Medicaid.

The deficit for fiscal 2009, which ended last September, was $1.4 trillion. The commission has been called on to reduce to deficit to within $550 billion by 2015, meaning the members need to find at least $250 billion in cuts and revenue.