President Obama’s proposal to cut Social Security and Medicare has fueled a civil war within the Democratic Party. The social insurance programs are considered by many Democrats to be the party’s greatest achievements in the New Deal and Great Society, respectively. Obama’s alignment with Bush style Neoliberalism has provoked the progressive wing of the party to begin to openly defy the termed out president.

When it comes to economic issues, Democrats are not a united party. There are economic liberals, in the vein of Elizabeth Warren, who believe that very rich people who lead a good life can afford to pay more in taxes to support basic services for struggling people, seniors, and others who are vulnerable. And then there are “pro-business” Democrats, or what might be called SPECs (Socially Progressive Economic Conservatives). These are the pro-fracking, self-described “entitlement reformers” — like omnipresent former Gov. Ed Rendell — who talk about the need to keep taxes low and make “bold” decisions like cutting the social safety net, in an effort to fix the debt, restore “balance” and “get serious.”

While the split is not discussed as often as it might be, these two camps stand far apart on economic issues, and, in some ways, are fighting for the soul of the Democratic Party. And, with President Obama’s newly reiterated proposal to cut Social Security through his chained CPI plan, a big test is approaching to see which wing of the party will prevail.

The Progressive Change Campaign Committee promised a nuclear war if Obama did this. We’ll have to see if it goes that far. AARP has already come out swinging. First releasing a video reminding Obama he promised not to cut Social Security and breaking down why Chained CPI is bad for the program.

And as the civil war continues Richard Eskow asks a question the establishment press refuses to ask despite its obvious relevance – have Wall Street’s Third Way Democrats ever been right about anything?

The Third Way crowd keeps saying they’re bringing “fresh” and “new” perspectives to the debate, but all they do is keep rehashing twenty-year-old talking points. They don’t seem to have learned from the economic shocks — and financial revelations — of the 21st Century. The world has learned some hard lessons, but they still want to party like it’s 1999…

Have they been right about any economic issue of import? We haven’t found any evidence for that. But we promise to keep on looking.

Aye there is the rub. The Neoliberal/SPEC faction of the Democratic Party doesn’t care that their policies fail to help the 99% every time they are tried. Deregulation and privatization help them and their benefactors. That’s all that matters to them – another payday. Cutting spending to pay off private debts that were made public by bank bailouts is much more important than dealing with historic poverty. And why not? Who are the poor going to vote for, the Republicans? It is the same Clintonian logic that lead to NAFTA and the WTO. Where are the unions going to go? Corporate calculation over loyalty and principle.The value of not having values.

And so now the Democratic Party is faced with a serious existential challenge. To be a true alternative to the Republican Party or to be Republican Light. And no, it is not the public that has some consensus both parties must placate – the overwhelming majority of Americans oppose cuts to Social Security and Medicare. This is an elite agenda not a public one. If the progressives prevail the Corporate Democrats will find their home in the private sector, just a little early. If the Neoliberal/SPEC faction wins it will be the beginning of the end for the safety net as America lurches towards further social and political disintegration.