"First, make no mistake, both parties want to gut or kneecap Social Security. On the right (which is to say, among the rulers of the Republican party, not the voters) the Trust Fund is a big fat fruit, ripe for plucking and eating — $2.7 trillion and counting. That’s a lot of money to divert into the stock market, as Bush II tried to do in 2005. He was beaten back, partly because he was a Republican (keep that part in mind); but he gave it the college try."
"On the “left” (as the Neoliberal rulers of the Dems like to brand themselves), the push is no less strong, but with slightly different changes on offer. The Wall Street billionaires would love to steal the Trust Fund outright, but you can’t sell that to Democratic voters, so when the “left” is in power, they don’t try to kill it so much as kneecap it, hobble it, cut its little hamstrings to keep it from walking.:
Read more at http://www.nakedcapitalism.com/2013/04/like-nixon-to-china-it-takes-a-democrat-to-put-the-first-knife-in-social-security.html#XxDqH3megQ9VGkLZ.99
So today it happened. The President officially called for chained CPI for Social Security
A key feature of the plan Obama is proposing for the federal budget year beginning Oct. 1 is a revised inflation adjustment called “chained CPI.” This new formula would effectively curb annual annual increases in a broad swath of government programs, but would have its biggest impact on Social Security.
Obama’s budget proposal also calls for additional tax revenue, including a proposal to place limits on tax-preferred retirement accounts for wealthy taxpayers. Obama has also called for limits on tax deductions by the wealthy, a proposal that could generate about $580 billion in revenue over ten years.
The inflation adjustment would reduce federal spending over 10 years by about $130 billion, according to past White House estimates. Because it also affects how tax brackets are adjusted, it would also generate about $100 in higher taxes and affect even middle income taxpayers.
Listen, I'm the first to amdit that we've had enough deficit cuts already. The real trouble with the deficit cutting is it's been too successful.
To hear the Jane Hamshers and the Yves Smiths of the world tell it, the White House has a fetish for cuts to the Big 3. They will cut as deeply and painfully as they can get away with-as Democrats, accroding to this thinking, they have be a little kinder and gentler but the goal is the same.
"There is no more pretense possible. As we’ve warned for some time, Obama is eager to put a notch on his belt by being the President that rolled back the New Deal programs that helped create broad-based middle-class prosperity and dignity. He’s cast himself as an adult inflicting discipline on profligate Americans. But in reality, the profligacy was most concentrated among elite financiers who used leverage on leverage vehicles to stoke liquidity that led to worldwide underpricing of risk. They paid themselves record bonuses in the years immediately preceding the crisis, and then in a grotesque display of ingratitude, did so again in 2009, able to do so only thanks to massive taxpayer support, alphabet-soup special borrowing programs, and the tax on savers known as ZIRP. And the direct result of their looting exercise that produced the crisis was the explosion in government deficits, due to a collapse in tax revenues and a rise in payments under countercyclical programs such as unemployment insurance and food stamps.
Read more at http://www.nakedcapitalism.com/2013/04/now-its-official-obama-sells-catfood-futures-um-social-security-and-medicare-cuts.html#WsmIuWJzPQq6bWYm.99
Basically, she thinks he's a vampire who feeds on the blood of the entitlements
Still, there is a bigger picture besides simply making categorical statements that there must be no cuts to entitlements. Greg Sargent I think gets to some of what the White House is thinking. Basically, it's to close this endless fiscal impasse.
"The entitlement cuts include Chained CPI for Social Security and a combination of means testing and provider-side cuts on Medicare, in addition to other spending cuts, which will anger liberal Democrats. Chained CPI is a fancy way of describing what is a real benefits cut. The budget seeks $580 billion in new revenues via closing loopholes enjoyed by the wealthy and oil and gas companies. There will reportedly be some new spending offset by money raised elsewhere — which is designed to prove that you can reduce the deficit and spend to prime the economy and help the middle class at the same time."
"At a certain level, this shouldn’t surprise anybody. On entitlements, Obama is merely reiterating what he’s previously offered John Boehner, and it has long been clear that this offer is still on the table. Many liberals have long suspected that Obama actively wants to cut entitlements. So here is my understanding of White House thinking on why a Grand Bargain is a good outcome."
"Obama and his advisers don’t necessarily view Chained CPI as good policy. But they think a Grand Bargain is ultimately a better outcome than continued sequestration, and the only way to the former is to peel off individual Republicans who are open to new revenues. They believe a Grand Bargain is good for Democrats in general, because it essentially would lock in a medium-term agreement over core disputes — about the safety net and about the size of government, and who should pay for it — that have produced a debilitating stalemate in Washington."
I think Greg is right here. It's not that Obama actively wants chained CPI but rather the important objective is to avoid continued sequestration which today's numbers show is a real threat beyond White House tours. It's also true that despite the hyperbolic language at Naked Capitlaism he's talked about chained CPI before so it's not really big news.
The White House itself says that it doesn't necessarily see this as the best policy. However, it does also propose new spending, closing loopholes on the rich, and an new cigarette tax-it's amazing to me that anyone but the 1% can afford to smoke anymore. I disagree with the narrative that Obama wants to gut the New Deal. I think he;s trying to be a trasnformational President, a kind of counter-Reagan but this fight over austerity is a long term fight. I agree with Norquist on that at least when he said that it's a long term battle over fiscal matters.
There are some real worries that he's now given them cover. Of course, Boehner and company show no gratitude, instead blasing the offering because of the tax increases.
http://www.politico.com/story/2013/04/obama-budget-medicare-social-security-89658.html
The thing that liberals who kill Obama over chained CPI or raising the Medicare age never get is that while I agree with them about austerity not all Americans do. They always leave out the opposition he has to face. They fail to appreciate that the public is largely confused on fiscal matters. They actually support cutting "government spending" except when you try to get them to name a specific program they want cut-their answer is to cut foreign aid from 29% to 10%.
I think Obama is playing the long game and that he's already been a lot more successful than he's giving credit for by many liberals. There's a real question of whether or not you'd rather accept a few unpleasant cuts like chained CPI and end permanent sequestration or refuse any entitlement cuts an live with permanent sequestration. It's not obvious to me that the second option is so self evidently the superior one. If you thin it is, I'd be interested to hear what your plan is to avoid permanent sequestration.
Overall, I think this proposal plus the disappointing job numbers will put more pressure on the GOP to come back to the negotiating table. The big knock on the GOP for most Americans is that they refuse to compromise.
http://www.gallup.com/poll/161573/americans-top-critique-gop-unwilling-compromise.aspx
This will further underscore that.
The thing that liberals who kill Obama over chained CPI or raising the Medicare age never get is that while I agree with them about austerity not all Americans do. They always leave out the opposition he has to face. They fail to appreciate that the public is largely confused on fiscal matters. They actually support cutting "government spending" except when you try to get them to name a specific program they want cut-their answer is to cut foreign aid from 29% to 10%.
I think Obama is playing the long game and that he's already been a lot more successful than he's giving credit for by many liberals. There's a real question of whether or not you'd rather accept a few unpleasant cuts like chained CPI and end permanent sequestration or refuse any entitlement cuts an live with permanent sequestration. It's not obvious to me that the second option is so self evidently the superior one. If you thin it is, I'd be interested to hear what your plan is to avoid permanent sequestration.
Overall, I think this proposal plus the disappointing job numbers will put more pressure on the GOP to come back to the negotiating table. The big knock on the GOP for most Americans is that they refuse to compromise.
http://www.gallup.com/poll/161573/americans-top-critique-gop-unwilling-compromise.aspx
This will further underscore that.
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