Cowen faces backbench revolt over pension cuts
TAOISEACH Brian Cowen was engulfed in a backbench revolt last night after he gave his strongest indication yet that the old-age pension would be cut in the Budget.
Savage cuts to the pension, child benefit and other welfare benefits are being planned by the Government in a bumper first instalment of the €15bn four-year plan to slash the deficit.
Increases in the levels of income tax and social insurance being paid by workers are also on the cards.
The state pension was spared from the axe last year, even though most other social welfare payments were cut.
Following the revolt two years ago over the abolition of the automatic entitlement to a medical card for the over-70s, Fianna Fail TDs are still nervous about doing anything to upset pensioners.
Fianna Fail backbenchers last night told Mr Cowen and Finance Minister Brian Lenihan they accepted many areas of public spending were "fair game" but the old age pension was not one such area.
Fianna Fail Longford-Westmeath TD Mary O'Rourke, the aunt of Mr Lenihan, was the first to speak up after Mr Cowen's opening address to the meeting and she focused heavily on the pension.
"She got the ball rolling on it and basically said it should be a no-go area. Loads of others rowed in then," a party backbencher told the Irish Independent.
Ms O'Rourke was supported by another six Fianna Fail TDs, who expressed similar views.
"She said these people were our support base and that while some people might argue the elderly can afford to make some contribution, she said it was the one sector that shouldn't be touched," one TD said.
Mr Cowen made it clear at the meeting everything was on the table and up for negotiation.
"He was making it clear there are no sacred cows," another TD said.
There is a growing sense within the coalition that the four-year super budget plan will be highly detailed, meaning the key decisions will be taken by the middle of November, rather than the closing days of Budget preparation in early December.
"Budget day will possibly be a damp squib," a government source said.
Defending the Government's decision to opt for a cut of €15bn over the next four years, the Taoiseach also said there would be more spending cuts than tax increases in the Budget. He pointed out that the contributory state pension rose by 38pc over the past five years, when inflation in the same period was just 10pc.
"Given the budgetary crisis we are now in, I do not believe that we can protect every aspect of health, education and social welfare spending," he said.
Fianna Fail's coalition partners in the Green Party say education spending is the priority.
Greens leader John Gormley also signalled that he wants to see a cut to salaries of TDs and senators as well as expenses -- but didn't go into specifics.
Despite the Government's repeated commitment to meeting the deficit reduction target, Irish borrowing costs surged yesterday to fresh highs.
Ireland's interest rate on the markets was at 6.67pc, up almost a third of a percentage point in a day.