No jobs. No growth. Falling income. Unaffordable colleges. A dying
middle class. Young people without hope. The greatest economic
inequality in modern history.
And yet, in the midst of the
Long Depression, we’re told that the President intends to cuts Social Security.
(Photo: Andy Thompson/wisaflcio)
According to reports, the new Presidential budget proposal will also
include job-killing spending cuts and a Medicare cost hike that will
increasingly affect the middle class with every passing year.
The President
says
this isn’t his “ideal plan,” but he doesn’t say what his ideal plan
would look like – and he certainly isn’t fighting for a better one. He
also claims his budget offers “tough reforms,” which rings of
self-satisfaction rather than sorrow.
He’s decided on his next move. What’s yours?
This budget represents a moral challenge for everyone, especially those of us who voted for him. I’ve already gone
here to let my elected officials know that I unconditionally oppose these budget cuts.
Death of a Thousand Cuts
Call it ‘the unkindest cut of all.’ What makes the chained CPI particularly unkind is the fact that millions of Americans have
already
had their Social Security benefits cut. Benefits are determined based
on a person’s lifetime earnings, so any significant loss in income now
results in a benefit cut later. (More details
here.)
Long-term unemployment is a benefit cut. A stagnating wage is a benefit cut. Wealth inequity is a benefit cut.
How many more cuts can the American people stand?
A Deep Cut
How big is the President’s chained-CPI cut? For someone who retires at 65, it would be:
a 3.7 percent cut at age 75;
a 6.5 percent cut at age 85;
and a 9.2 percent cut at 95.
What about the dollar cost of the President’s cut? For the average earner, cumulative benefits would be cut by:
$4,631 – more than three months of benefits – by age 75; $13,910 – nearly a year of benefits – by age 85;
and $28,004 – more than a year and a half of benefits – by age 95.
Unless the President’s budget excludes the chained CPI from IRS calculation, it would also lead to tax increases for all income
except that in the highest tax bracket. So his Social Security cut would also be a middle-class tax hike.
All the President’s Cuts
Despite its severity, reports tell us that the chained CPI isn’t this
budget’s only harsh austerity measure. The President will also propose
increasing Medicare premiums for higher earners. The figure that’s been
reported is $47,000 per year. That targets comfortable seniors, not
just the wealthy.
In less than 25 years, that more than one retired person in four
would be paying an increased Medicare premium. (See the Kaiser Family
Foundation’s
analysis for more.) This cost hike wouldn’t do anything to reduce runaway health care costs. It’s just cost-shifting.
The President’s budget also includes some plain, old-fashioned austerity. According to
reports,
the new Obama budget calls for $400 billion in cuts to health programs,
along with cuts to Federal employees’ retirement programs, the Post
Office, and farm programs.
That follows the European model of cutting budgets during a Long Depression. Hey,
what could go wrong?
Off-Balance
The White House is defending these cuts by saying they’re only acceptable as part of a ‘
balanced package.’
But their current budget is already unbalanced.
Dean Baker‘s
calculations show that the President’s asking the typical
financially-strapped senior to sacrifice more than three times as great a
share off income as the average wealthy American. Disabled veterans
could be hit even harder, since they tend to spend more years collecting
the benefit.
What’s more, Social Security shouldn’t be included in deficit
discussions at all. It doesn’t contribute to the deficit. Suggesting
that they be part of these negotiations is reinforcing a false sense of
‘balance.’
The President’s budget is also out of balance because it includes
much more in cuts than it does in revenue hikes, and the increases being
proposed – ‘closing loopholes’ – skirts around this country’s real tax
inequity. While it’s important to close loopholes, their preferred
approach also has the potential for being directed against the middle
class as well as the wealthy.
Austerity, Democratic-Style
No matter what the spin doctors say, the President isn’t
‘negotiating.’ Negotiation is a process in which one party proposes X
and the other counters with less than X. But
the chained CPI isn’t in the Republican budget. It is
only in the President’s.
And remember: The President’s budget is just the starting point for negotiations.
Sure, the Republicans like this cut too, and they’ve raised it on other occasions. But it’s in
Obama’s budget, not theirs. Their fingerprints aren’t on it. Obama
owns this.
That means his
party owns it – unless other Democrats oppose it, fiercely and publicly.
The Defense Should Rest
Some of the President’s supporters are still pretending the chained
CPI is a “compromise.” They should stop. He’s spoken in favor of it a
number of times. It’s his preferred policy.
Others take the opposite tack. They say people “shouldn’t be
surprised” at the President’s cuts given all the signals he’s given
recently. But wrong is wrong, and surprise has nothing to do with it.
And please stop saying that he hasn’t broken any promises. In 2007 he
said that “cutting benefits is not the right answer.” In 2008 he
berated
John McCain for “suggesting that the best answer to the growing
pressures on Social Security might be to cut cost-of-living adjustments
or raise the retirement age.” Said candidate Obama:
“I will not do either.”
As of this writing, the
White House website
still says that the President “believes that no current beneficiaries
should see their basic benefits reduced” (which this budget would do).
Other Presidential defenders offer something Digby
describes
as a “Sophie’s Choice” for liberals. They’re “telling the progressives
that a hostage is going to get shot no matter what: Head Start and food
inspections today or the elderly, the sick and the veterans tomorrow
and they have to choose which one.”
“Why,” asks Digby, “should progressives bear that responsibility?” For that matter, why should anyone else?
Things fall apart. The center cannot hold.
The self-described “centrists” supporting this move are especially off-base, since the political center
hates the chained CPI. A new
AARP poll showed that 69 percent of voters “opposed” or “strongly opposed” the chained CPI, while only 16 percent supported it. A
December poll found that 54 percent of voters opposed the chained CPI, with 16 percent favoring it.
The President’s chained CPI proposal isn’t “centrist.” It’s far to the right of public opinion.
“Left, Right, and Center” host Matt Miller even mocked “liberal”
outrage that the chained CPI is only a small reduction on a
macroeconomic level. We called those who use this argument the “
mohels of moderation“: It’s just a tiny cut! Why all the yelling?
Value Village
As
Mike Lux
says, “your budget represents your values.” What is valued in this
budget: Compromise at any price? Good press coverage? The approval of
Washington’s insular “Village,” whatever the cost to others?
This budget certainly reinforces false and destructive right-wing
messaging: That Social Security should be cut as part of a deficit
reduction plan. (It shouldn’t.) That government spending hurts the
economy, even in hard times. (We know that it helps.) That we can’t
solve our health care cost problem, so we should shift the burden back
onto individuals. (We
can solve it, the way other countries have.)
Whatever happens during budget negotiations, the President’s proposal is already a huge victory – for conservative ideology
The Dance
Obama’s defenders say the Republicans have insisted that he propose
these cuts before they’ll consider them. We’re told that this bowing
gesture will lead to a beautiful
pas de deux – or to a scornful rebuff which will benefit Democrats at the polls.
That makes no sense. When has one party demanded that the other present its ideas – especially its most unpopular ones –
as if they were its own? What’s next: Will they ask the President to propose their Medicare voucher plan? Call for a flat tax? Join the Tea Party?
We liked the old system: One party proposed one set of ideas, the
other party proposed another, and the voters decided which ones they
preferred.
Democrats’ Dilemma
The President leads his party. Unless Democrats mount a concerted
opposition to this budget, they’ll have gone on record as the party that
wants to cut Social Security.
Hill Democrats face a real quandary. If they resist this misguided
document they’ll find themselves under intense pressure from the White
House and their own leadership. But this budget is wrong for the
country, and Democrats who support it will help inflict a deep wound on
their party’s electoral chances.
And they’ll feel the wound themselves. That AARP poll showed that 87
percent of voters over the age of 50 consider it “very important” that
politicians not cut Social Security benefits. Any Dem who votes for it
will suffer at the polls.
Democrats already suffered a precipitous
25-point drop in confidence on this issue during Obama’s first two years in office – then lost the House as Republicans ran to their
left with a “Seniors’ Bill of Rights.”
The Progressive Change Campaign Committee is
tracking
the elected officials who are standing up to oppose this cut. These
leaders deserve our support. And liberals are threatening to mount
primary challenges against Senators and Representatives who vote for a chained-CPI budget.
They can count me in.
Your Move
The President has made his decision. Now the rest of us must make
ours. We have a moral obligation to future generations, and to
ourselves, to actively oppose the cuts in this budget. This is the
wake-up call: These programs can’t defend themselves, and we can’t
depend on others to defend them for us.
The ball’s in our court now.
The first step is to make your voice heard. You can tell your elected representatives that you oppose these cuts by going
here.
Richard (RJ) Eskow is a well-known blogger and writer, a former
Wall Street executive, an experienced consultant, and a former musician.
He has experience in health insurance and economics, occupational
health, benefits, risk management, finance, and information technology.
Richard has consulting experience in the US and over 20 countries.
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