Social Security opponent Nancy Pelosi defends her support of proposal to make Grandma eat catfood

Nancy Pelosi, who has publicly signed on to President Obama's proposal to cut benefits for Social Security, has the usual frivolous excuses for her support of this awful proposal, as Michael McAuliff and Sabrina Siddiqui report in Nancy Pelosi Says Social Security Cut Proposed By Obama Would 'Strengthen' Program Huffington Post 12/19/2012.

They point to one of the central problems in an argument that has become gospel - or at least acceptable in terms of cynical propaganda - among the Beltway Villagers:

Pelosi's reasoning on Social Security focuses on the costs of the program. Logically, a way to strengthen it even further would be to cut it much deeper. It's no coincidence that Rep. Paul Ryan (R-Wis.), who takes that argument to its logical extreme, also employs the term "strengthen" when talking about his plan, which slashes Medicare spending. While weakening a program to strengthen it may seem at first to be wholly counterintuitive, it begins to make sense from a different perspective. For beneficiaries, the program is weaker, as it pays out less. But for taxpayers, it's stronger, because the program can meet its obligations for a longer period of time without taxes being raised. The extra costs are borne instead by seniors.

That logic, however, is only ever applied to entitlement programs that have their own revenue streams. Nobody would attempt to argue that the military was strengthened by cutting its budget, or that education was strengthened by slashing funding for it.

Social Security was created in the 1930s to combat elderly poverty. It worked: Giving money to older Americans made them less poor. Shrinking benefits would correspondingly lower their standards of living. [my emphasis]

Tags: austerity economics, barack obama, chained cpi, fiscal cliff, grand bargain, medicaid, medicare, nancy pelosi, social security

Fiscal cliffing with Obama-style negotiating

House Speaker John Boehner seems to be balking at Social Security opponent Obama's latest offer to solve the non-crisis of the "fiscal cliff" that includes reductions to Social Security benefits and $400 billion of unspecified savings in Medicare. (Nancy Cook, Fiscal Cliff Talks Devolve Into Day of Dueling Press Conferences National Journal 12/19/2012)

Once again, Obama looks to be back in President Pushover mode in negotiating with the Republicans.

David Dayen takes note of it in Obama Proud of His Fiscal Slope Offer, For Some Reason FDL News 12/19/2012:

Anyway, the President had to defend his latest offer, with its spending cuts commensurate in level with the sequester, benefit cuts to Social Security, concession on marginal tax rate increases by moving the dividing line to $400,000 a year and allowing open the opportunity for debt limit hostage taking down the road. And he basically bragged about the wise centrism of his offer. He called it the “largest piece of deficit reduction we've seen in the last 20 years” and said it would resolve out deficit and debt issues for the next 10 years. Because that’s how things work, right? Deficit scolds just go into hibernation once some mythical level of stabilization gets reached.

Obama basically ignored the implications of the benefit cut in Social Security, and ignored the regressive tax increase for everyone associated with the move to chained CPI. He mainly expressed puzzlement that Republicans haven’t taken his deal, since he’s gone "more than halfway" in their direction. Um, that answers his own question. If by doing next to nothing, they can watch the President give up on things he long demanded – he said he would veto anything that extended the Bush-era tax rates above $250,000, and that he would not "play the game" anymore on the debt limit – then why wouldn't they just keep sitting still and letting the President come to them?

Markos Moulitsas also is struck by it, as he describes in It wasn't Obama's negotiating style that won him reelection. It almost cost him Daily Kos 12/18/2012.

Dayen mentions that Obama has already neutralized his post-election vow not to negotiate over the debt limit. : "The President says he won’t negotiate on the debt limit. By offering up this debt deal now, he’s actually in the process of doing that. And he’s basically setting up a debt default in 2014, or a major conflagration anyway, by not shutting this down immediately."

Markos makes a similar observation:

Obama isn't doing himself any favors by drawing lines in the sand and then inevitably capitulating. Republicans have learned that there isn't a negotiating stance that Obama won't compromise. That doesn't lend itself to smart negotiations. Rather, it creates unbalanced ones, as Republicans simply wait for Obama to cave on his demands. They've learned that for Obama, making a deal is more important than what's in the deal.

One of the bizarre aspects of these negotiations is that the Democratic "concession" most prized by the Republicans - cuts in benefits to Social Security, Medicare and Medicaid - is one that the Republicans know Obama wants to give up. Four years ago, we could still reasonably hope that Obama's talk about controlling deficits as political posturing to make his proposed stimulus package more acceptable to skeptics. But since he not only offered benefit cuts in Social Security, Medicare and Medicaid in 2011 but just since his re-election has again offered up cuts in benefits to Social Security and Medicare, his messaging on the subject four years ago looks like the expression of a real, hardcore goal of his.

Digby just reposted one of her early analyses of the Grand Bargain to cut benefits on Social Security, Medicare and Medicaid, Fiscal Madness 01/11/2009. Jane Hamsher, who has also been following the evolution of the Great Sellout to cut benefits on Social Security, Medicare and Medicaid, does a recap of Obamas history on the subject, Can We Please Stop Pretending Obama is "Capitulating" on Social Security? FDL Action 12/19/2012.

This doesn't invalidate the criticisms of his negotiating strategy, though. In fact, his negotiating is awful because he's trying to achieve the impossible. He wants to achieve an "end of ideology" state by agreeing to cut benefits on Social Security, Medicare and Medicaid and doing it in a way that Democrats will accept and even like. Only by achieving such an "end of ideology" can he be the great conciliator who makes no-red-America/no-blue-America a reality.

But the Republicans aren't interested in an end of ideology, they're interested in the victory of theirs. And that includes gutting Social Security, Medicare and Medicaid. But to make Democratic acceptance of that even remotely plausible, it has to be generally seen as the reluctant capitulation by Democrats to a Republican demand. And to do that, Obama would have to negotiate on the basis of Democratic priorities until the Republicans gave him a clear offer on rolling back Social Security, Medicare and Medicaid on which he could agree to a less drastic version which he could then sell as stopping the Republicans from doing more harm.

This would also require the Republicans to be willing to make such an offer and own them as their demand. But they aren't willing to do so. They falsely charged Obama in 2010 and again in 2012 with cutting back Medicare on the basis of projected savings that did not involve benefit cuts.

In another post on how Medicare Obama claims he's already gone "at least halfway" toward the Republican positions, Markos writes (Obama admits he's already conceded more than warranted 12/19/2012):

Sheesh, why didn't Obama say something like, "I made a more than fair deal. The GOP rejected it. So now I'm pulling the offer off the table and waiting to see what the GOP has to offer. Clock's ticking!" Instead, the GOP will bank the concessions he's already made, then demand more. Rinse. Lather. Repeat.

The sad part, given Obama opposition to Social Security, Medicare and Medicaid, is that stalemate and no deal is one of the best options for the country.

Tags: austerity economics, barack obama, chained cpi, fiscal cliff, grand bargain, medicaid, medicare, nancy pelosi, social security

Nancy Pelosi endorses the Great Sellout to cut benefits on Social Security

Nancy Pelosi has become a disgrace to the Democratic Party and to California by endorsing Social Security opponent Obama's "chained CPI" proposal to cut benefits on Social Security, including for current recipients: Amanda Terkel and Sam Stein, Nancy Pelosi Predicts 'Democrats Will Stick With The President' On Fiscal Cliff Deal Huffington Post 12/18/2012.

I hope this will become a serious inflection point in the history of the Democratic Party. This can become a dividing point for the labor/liberal/pro-Social Security/Medicare/Medicaid portion of the party, which reflects the views of the base, to become a serious opposition within the party that can successfully challenge the corporate wing, of which Pelosi with her public support of a cut in Social Security benefits now has to be considered a part.

It's hard to imagine that San Francisco Democrats would be unable to mount a substantial primary challenge to Social Security opponent Nancy Pelosi in 2014.

This is a great opportunity for aspiring Democrats, from whatever combination of principle and opportunism on which they operate to establish a distinct political profile for themselves as defenders of the very popular Social Security, Medicare and Medicaid programs against corporate Democrats like, I'm sorry to say, Pelosi and Obama.

Tags: austerity economics, barack obama, chained cpi, fiscal cliff, grand bargain, medicaid, medicare, nancy pelosi, social security

Obama to seniors: Merry Christmas! I'm cutting your Social Security benefits!

So President and Social Security opponent Obama has gone there. After he let people hope for a weekend that the Grand Bargaining to cut benefits on Social Security, Medicare and Medicaid might at least be on hold until January, on Monday comes the news that he's agreed with House Speaker John Boehner on a "fiscal cliff" plan. (Jonathan Weisman, Obama's New Offer on Fiscal Crisis Could Lead to Deal New York Times 12/17/2012)

The details are overshadowed by the only thing in it that really matters: cuts to Social Security benefits, including current recipients, by adopting the "chained CPI" inflation-adjustment measure. There are various places to find explanations of "chained CPI," e.g., David Dayen, What Chained CPI Means, and Why a Cut in a Time of Inadequate Social Security Benefits Makes No Sense FDL News 12/17/2012; Mide Konczal, A Cost of Living Adjustment for Social Security in the Fiscal Cliff? Rortybomb 12/17/2012; Bryce Covert, In Fiscal Cliff Deal, Don't Chain Grandma to Smaller Social Security Checks The Nation 12/18/2012; Dylan Matthews, Everything you need to know about Chained CPI in one post Wonkblog 12/11/2012.

This AARP video explains the basic concept, Changing Social Security COLA Formula Would Hurt Current Retirees 12/14/2012:

The placing of that critical "detail" in the New York Times article linked above, the ninth paragraph, is a reflection of the success among the Beltways Villagers of Obama's approach to the "fiscal cliff" marketing of concentrating overwhelming on taxes, so that coverage of any such proposal like this would focus on the Social Security opponent Obama's supposed victory on taxes and ignore the very damaging cuts to Social Security benefits. (It's not clear from what I've seen how many other programs might be affected by "chained CPI," but it's my understanding that if Social Security is subjected to it, veterans benefits will also be.)

It's bad enough that we have a Democratic President who is committed to cutting benefits on Social Security, Medicare and Medicaid. If this is adopted, it will be open season on the program. Social Security is the Mississippi River of cash flows and Wall Street wants to find some way to tap into it, ultimately by privatizing it.

It's politically important that this is a cut to current beneficiaries, a boundary that even privatization advocates like Bush II were generally unwilling to cross before now. And if a Democratic President and any substantial number of Democrats support it, the political firewall that has protected the program will be, well, badly damaged. A critical thing here will be how many Democratic members of Congress who support this cut to Social Security benefits are unseated in primaries in 2014.

It also shows that Obama is going to continue his President Pushover act - in dealing with Republicans. We saw early on in the fight over a public option for health insurance that he was willing, even eager to fight "the left," aka, his voting base. Since "the left" now apparently includes everyone who opposes cutting benefits on Social Security, Medicare and Medicaid, it's pretty much the Democrats' entire voting base. The Democrats will need some new approaches in 2014 if this thing goes through:

Raven Brooks of Netroots Nation tweeted:

If the Democrats want 2010 losses X 5 in 2014 they should go ahead and vote to cut Social Security.
— Raven Brooks (@ravenb) December 18, 2012

What's astonishing too is that Obama is willing to have himself and the Democrats be patsies for this. The Republicans will campaign against them in 2014 based on the Social Security cut if it goes through. The idea that they will observe a "Grand Bargain" by not using the Social Security cut against the Democrats is nonsense. Then when they capture both Houses of Congress, they can push Obama for more cuts in Social Security, Medicare and Medicaid and then make the Democrats own those in 2016. Awesome!

Brian Beutler in The Social Security Benefit Cut Obama May Agree To TPM 12/18/2012 reports on several alleged Social Security supporters leaning toward backing this cut which would politically have the effect of throwing Social Security to the Wall Street wolves:

Supporters like to describe it as a technical fix to the way the government calculates inflation. But in practical terms, it will effectuate a genuine Social Security benefit cut. If it’s applied across the board, it will also reduce food stamp benefits and veterans benefits, and function as a modest but regressive tax increase, as brackets grow more slowly and taxpayers find themselves pushed across income thresholds more quickly than in the past.

Chained CPI differs from the way the government currently calculates inflation by taking a broader view of the behavioral changes consumers make when prices rise. It factors in a propensity to substitute cheaper, but similar products for ones that have become more expensive. And it has been criticized by advocates for being a less accurate measure of inflation for the products seniors rely on than Social Security currently uses.

But Obama allies and and some liberal economists have identified it as the least-bad entitlement benefit cut and have given it their blessing provided it's one piece of a broader, balanced debt reduction plan, and includes protections for poorer seniors. Though the Congressional Budget Office has cautioned that indexing Social Security to chained CPI would be technically complicated, the liberal Center on Budget and Policy Priorities backed it under those circumstances. So did the progressive Center for American Progress, which has close ties to the White House.

In Evaluating The Coming Deal 12/16/2012, Beutler added an important aspect: "But even though it’s not as onerous as an increase in the Medicare eligibility age — and even though the Obama administration has never really had a problem with this particular reform — it's still a benefit cut, a real one, up front, with Obama’s fingerprints all over it." (my emphasis) As Sarah Palin might say, you betcha!

I was unpleasantly surprised to see that even Paul Krugman went a little wobbly in writing about this awful proposal. Just the day before in, he Assimilated by the Peterson Borg 12/16/2012 was writing about a "Peterson deficit-scold front group" fear-mongering about the fiscal cliff, and he observed, "The only way we could even get anything pretending to be a Grand Bargain would be for Obama to surrender completely, as he almost did in 2011; and a bargain like that wouldn't even deliver deficit reduction, because you know that Republicans would end up reneging on the revenue parts." And he reminds us of what today's Republican Party is:

So this is ridiculous — and the fact that all these people don’t realize that is in itself evidence of the bubble in which Very Serious People still live. It’s also evidence of the desperation of the deficit scolds, who are evidently horrified that they aren’t managing to exploit the fiscal cliff — which has nothing at all to do with our debt — to ram their agenda through.

This is one of the weaknesses that even sensible economists like Krugman or Robert Reich show on Social Security. For economists, a payroll tax cut looks like a technically efficient way to put more money immediately into consumers hands and one that even enhances the progressivity of the tax, since wealthy people pay a much smaller percentage of their total income on payroll taxes because of the cap and because it doesn't apply to income categories like capital gains.

But politically, the payroll tax is an anchor of the Social Security and Medicare programs because it emphasizes their nature as social insurance and gives people a sense that "I've paid into this program my entire life," and therefore more ownership of the program. Reducing the payroll tax and replacing the lost revenue from the General Fund, which we've been doing the last couple of years, helps Social Security opponents like Obama and the Republicans stigmatize Social Security and Medicare as "welfare."

That's even true of one of the reported elements of Obama's current proposal to cut Social Security benefits: the fact that the cut would be replaced by a subsidy of some kind to the lowest-income seniors. Another big and visible step toward making it "welfare."

Tags: austerity economics, barack obama, chained cpi, fiscal cliff, grand bargain, medicaid, medicare, social security