Krugman is talking about what a really bad idea a post-election Grand Bargain to cut benefits on Social Security, Medicare and Medicaid would be for a re-elected President Obama. And he stresses that it would be a betrayal of the actual political mandate he's now building, perhaps more than Obama himself wanted:
... there is a sense in which the election is indeed a referendum, but of a different kind. Voters are, in effect, being asked to deliver a verdict on the legacy of the New Deal and the Great Society, on Social Security, Medicare and, yes, Obamacare, which represents an extension of that legacy. Will they vote for politicians who want to replace Medicare with Vouchercare, who denounce Social Security as “collectivist” (as Paul Ryan once did), who dismiss those who turn to social insurance programs as people unwilling to take responsibility for their lives?Krugman talks about the idea of raising the Social Security retirement age from 65 to 67 and explains what its effects would be:
This election is, as I said, shaping up as a referendum on our social insurance system, and it looks as if Mr. Obama will emerge with a clear mandate for preserving and extending that system. It would be a terrible mistake, both politically and for the nation’s future, for him to let himself be talked into snatching defeat from the jaws of victory.
Consider, in particular, the proposal to raise the Social Security retirement age, supposedly to reflect rising life expectancy. This is an idea Washington loves — but it’s also totally at odds with the reality of an America in which rising inequality is reflected not just in the quality of life but in its duration. For while average life expectancy has indeed risen, that increase is confined to the relatively well-off and well-educated — the very people who need Social Security least. Meanwhile, life expectancy is actually falling for a substantial part of the nation.And he follows it up with Bowlesing Toward Betrayal 10/02/2012, discussing a report at the time that Senate leaders were working on a plan to cut benefits on Social Security. Krugman writes, "Just to say, this would be politically stupid as well as a betrayal of the electorate. If you don’t think Republicans would turn around and accuse Democrats of cutting Social Security — probably even before the ink was dry — you've been living under a rock."
Krugman is right about this. But because he knows this so well, that makes it all the more surprising that he went a bit wobbly the week before Christmas week when Obama was pushing for quick approval of a plan that would have cut benefits on Social Security, including for current retirees. To be fair, he wound up criticizing it more than he waffled, but he he did leave the door open to considering it a decent deal.
He had it right in October. For Obama and the Democrats to support such a thing "would be politically stupid as well as a betrayal of the electorate."
Tags: austerity economics, barack obama, fiscal cliff, grand bargain, medicaid, medicare, neoliberlism, social security