Obama caves yet again: offering Social Security cuts to appease the right…
by Linda Beale
Obama caves yet again: offering Social Security cuts to appease the right…
Obama’s budget isn’t even released yet and he’s already caving to the “let’s make the rich richer and forget the rest” crowd. That crowd that claims that we need a capital gains preference so the rich can gather all that extra money to purportedly create jobs. The crowd, that is, that fails to acknowledge that the rich tend to take all that extra money to Singapore, the Bahamas, or the Cayman Islands or hide it away in some Swiss bank, none of which does any good for our economy compared to what the government investing that money in infrastructure projects would do. See, e.g., David Leigh, Leaks reveal secrets of the rich who hide cash offshore, The Guardian (Apr. 3, 2013); The corporatist crowd that refuses to admit the empirical evidence that says government investment is as important as private investment in creating jobs. It is the government that makes the market go round. And government money–our money–spent for schools, bridges, safer communities provides jobs and improves lives. Without that government investment, there is no market, just barter.
President Obama seems to have forgotten that he was elected. as a Democrat, over the Republican candidate. Obama has no business proposing cuts to Social Security benefits as part of a purported deficit reduction package. Social Security is not a deficit driver: it is a social insurance program earned by those who receive it by payments over lifetimes of hard work. It is the only stable retirement income most have. The average Social Security beneficiary receives just short of $14,000 a year from Social Security–that’s just 125% of the poverty line, which of course is defined so low as to guarantee that anyone living at or below that line is indeed in abject poverty and unable to move out of it.
The Republican Party has argued for cuts to Social Security benefits for decades, using whatever crisis of the momen they can engender to argue that we can’t afford the system in place. They’ve invented the perjorative term “entitlement” to imply that those who rely on social insurance because of disabilities or old age are just ‘freeloaders’ who are mooching off others. Not so, since Social Security is an earned benefit program like insurance: workers pay premiums throughout their working life, and then once they reach retirement age they may draw benefits.
There are a number of reasons for the amount of debt that the US government has–most of them related to the four-decade-long drive by the Republican Party to protect the wealthy and the corporations they own from much of a tax burden and to allow the accumulation of immense wealth by a few at the top of the income distribution. Outsize military expenditures driven by Bush’s preemptive wars undertaken at the same time that the Bush Administration pushed through tax cuts that favored the rich are of course a big problem. The Bush tax cuts threw us from surplus to deficit and we haven’t gotten beyond them yet. The almost complete capture of the financial regulatory agencies by Wall Street, and the resulting financial crisis driven by casino capitalism spiked with the heady bubbles of derivative inflation is of course another part of the problem, and we haven’t gotten beyond that yet, as Big Banks still exercise far too much power over their own regulation, proven by the LIBOR scandal that demonstrated their ability to manipulate the purportedly objective market rate to suit their profit machines.
But Social Security is not one of those drivers of the debt. And the debt is not so outsize that it merits sacrificing the most vulnerable amongst us to mollify the wealthy who merely want to avoid paying their fair share of the revenues needed to get rail service up to snuff, bridges safe, and public schools owned by the public again.
The average Social Security benefit is just under $14,000: the use of chained CPI will result in a loss to the average recipient of “$4,631 in Social Security benefits by age 75, $13,910 by age 85; and $28,004 by age 95″ (from release by Social Security Works, based on “Inflation Indexation in Major Federal Benefit Programs: Impact of the Chained CPI,” Alison Shelton, AARP Public Policy Institute, March 2013.).
Obama has no business facilitating the gluttony of the rich. He should drop the proposal to use “chained CPI” that will result in a cut benefits for Social Security recipients.
cross posted with ataxingmatter
Hopefully, Senate Democrats filibuster.
Repubs wanted C-CPI. Got it. Now don’t want it. At what point do the majority of pundits catch on that the GOP is not about making policy, but about being obstructionist to pander to their base? Seriously, anyone else get the feeling that the GOP is not really interested in formulating policy, but rather just want to put out proposals they know won’t pass (Ryan Budget) and seek to block anything and everything the President suggests? Obama could make today “National Kitten Day,” and Boehner would go apoplectic about something.
Obama negotiates as if the intended result of the negotiation is to make his opponents feel good at the expense of his own negotiating goal. His entire political strategy is to move forward in baby steps hoping that by overcoming inertia his desired result will emerge somewhere down the line. He is not now or ever has been a man who wants to make big changes quickly. Incrementalism is his motto apparently much to the chagrin of those of us who want it all and we want it now. By the time his strategy kicks in, many of us will be deader than a doornail…
I wish it were as simple as bone-headed R opposition. But,the President isn’t a traditional Dem. He’s a Centrist who thinks the way to run the govt. is in “partnership” with corporations, the banks,and Wall Street.What ordinary people want or support doesn’t matter to the President and people like him. The Centrists want to cut and eventually abolish SS putting welfare programs in its place. Mind you, you would pay the same payroll taxes as now but have no guaranteed retirement benefits waiting down the line.Terrific deal!
If he and other Centrists like Alice Rivlin, Bowles, and Peterson succeed Social Security will gradually disappear. A cut here and there each year and the first thing you know, there’ll be nothing left of SS.
Point is that the President wants to reduce SS benefits. It’s his idea to include the C-CPI in the budget. To keep the COLA computation the same, we have to oppose the President. It’s unfortunate, but there you are. Yet another, We’ll just have to wait and see moment. NancyO
Nancy is right.
Killing SS has been on O’s agenda since his first primary. I was stupid enough to think he could be “educated.” I did not realize the only educators he listens to all when to school at Peterson U.
I read, again, the other day (sorry no cite) that Peter Orszag admits that SS has no affect on the deficit, but says we have to cut it to “show the Bond market that the government can control its budget.”
Now, that is either insane, stupid beyond belief, or cynically dishonest.
and Linda is right.
The government creates the economy. It is possible that large banks, or large commercial “houses” that act as banks, could facilitate economic growth in ways similar to the government.
But it is increasingly clear this “economy” would function in a closed loop at a level of wealth that did not touch the “working class” (peasants in an older scheme of things.)
The only thing that can bring economic “growth” to ordinary people is a government they can influence to look out for their needs.
We have seen, since Reagan, and Margaret Thatcher of blessed memory, the gradual destruction of government for the general welfare (you know, “of the people, by the people, for the people”) and a return to the medieval scheme of things. Remember, it worked for them (the rich) for a thousand years.
What is sad, and a little bit sick, is that President Roosevelt invented a system that protects the poor from the rich in important ways, and while we have seen some of the rich (not all of them are “bad”) attack that system with increasing success
Lately the “defenders” of that system have forgotten one of Roosevelts key ideas: the success of Social Security depends on “worker pays.” Without “taxing the rich” the workers are protected in old age by a system of dedicating part of their wages to a “trust” that protects them from inflation and market losses, and provides insurance against personal losses and failure to make “enough” to save enough to retire.
Now, our progressive leaders, not able to understand the idea, have chosen to “defend” Social Security by demanding “the rich pay.” This is suicidal. It is also dumb.
But the progressive leaders have all become royalty in their own eyes. And if a mere peasant, like me, calls them dumb.. well, off with his head.
“But,the President isn’t a traditional Dem. He’s a Centrist who thinks the way to run the govt. is in “partnership” with corporations, the banks,and Wall Street.What ordinary people want or support doesn’t matter to the President and people like him.” Nancy
No Nancy, I’m afraid that the crux of the matter is that there are no traditional Democrats left in the Congress or Executive Branch. The DLC Democrat is what we have in their place. In effect they are little different from prior examples of less extreme Republicans. But that’s what it has come to, one form of plutocrat or another doing their best to protect the interests of oligarchs in hopes of gathering crumbs at their feet before, during and after their terms in office. Isn’t that the real purpose of the K Street phenomenon? You represent the elites while in office and “work” in their interests once out of office.
“Killing SS has been on O’s agenda since his first primary. I was stupid enough to think he could be “educated.” I did not realize the only educators he listens to all when to school at Peterson U.”
Sad really . . . I hadn’t realized how much I deceived myself over the past year or so, and how little I actually understand of the SS problem until I read this comment (coupled with a few other things on this blog).
You’re right, Jack. We need to get beyond party labels. Hard to do though because of the enormous organizations the R’s and D’s have built up. I give up. It’s way over my pay grade. So, I’m just gonna whine about all of them the same. Ezcept the Anti-Lady guys. They deserve real tongue-lashings whenever we have time. 😎 NancyO
Jack,
We all need to be aware, that the herald reduction of the DLC in the last election is not what actually happened. The DLC is also rebranding and going by the name: New Democrat
http://en.wikipedia.org/wiki/New_Democrats
Same old DLC.
Reagan was more friendly to SS than Obama. He went along with the Payroll tax increase, and did not cut benefits so far as I know.
mcOsker
yep. pretty pathetic when he have to look back at Reagan as more sane than the incumbent Democrat.
What Reagan had “going for him” was Tip O’Neil to keep him honest, a Social Security constituency that knew what it was talking about, and a population of people… including Reagan… who could still remember what life without Social Security was like.
Reagan/Greenspan most surley did cts benefits.
Increasing the Normal Retirement Age by one year is essentially the same as cutting benefits by 7 percent. The NRA has increased from 65 for people born before 1937 to 67 for people born after 1960.
In addition, benefits are now taxable. Before 1983 they were not. The 1983 fix was about 50 percent tax increase and 50 percent benefit decrease.
most surely did cut benefits
You are right arne. Reagan, Clinton (increased bene tax), and Obama were/are no friends of social security. Looking at the 2 Bushes now.
On this chained CPI abomination: This is the ONE time I’d like to hear Harry Reid say, “we don’t have the votes.”