Sequestering Grandma with the Grand Bargain

Sam Stein and Sabrina Siddiqui report on the latest austerity competition between the White House and Congressional Republicans in Obama Sequester Plan: Hope Republicans Blink First Huffington Post 02/05/2013.

Although the title implies that President Obama is in hang-tough mode, it's pretty clear from yesterday's statement from him offering up again his Grand Bargain to cut benefits on Social Security, Medicare and Medicaid that he's using the deadline the same way he used the debt ceiling in 2011 and the "fiscal cliff" in 2012 to get his Let Grandma Eat Catfood Grand Bargain done. Stein and Siddiqui share a White House elaboration on his Tuesday pitch: "Obama would even entertain reforming entitlement programs, including Social Security and Medicare, the White House said. An administration official later clarified that means revisiting the December 2012 discussions with House Speaker John Boehner (R-Ohio), rather than the July 2011 talks, which means far-reaching Medicare reforms remain off the table."

Here is Obama's Tuesday press statement, Obama Calls for Spending Cuts Before March Deadline PBS Newshour 02/05/2013:

The article seems to indicate that Democrats are now wanting us to panic over the defense cuts, while the Republican leadership is basically saying they're not willing to let them happen. And why not? It may be entertaining to hear Bobby Jindal call his gang "the stupid party." But they're also a Party that's continuing their fundamental opposition to Obama and the Democrats, and they are very much Keynesians when it comes to military spending. They know the sequester is a heavy enough dose of austerity that it could push the economy into a new recession and to them that looks like goods politics. After all, they can blame it on Obama, especially now that he's back in Grand Bargain mode pushing to cut benefits on Social Security, Medicare and Medicaid. Because those would be his best political clubs to oppose Republican austerity. If he actually opposed austerity, which he doesn't. And if his support of Social Security, Medicare and Medicaid were anything more than a throwaway line in his Second Inaugural to distract labor and the general public from his Grand Bargain goal to cut benefits on those programs.

Stein and Siddiqui mention a feature of defense spending that's well-known, but not mentioned and emphasized in spending discussions nearly enough:

Democratic Rep. Jim Moran's district in Northern Virginia would be hit hard by sequestration, he said, pointing to the military contractors and industries tied to federal funding. For a while, he said he assumed that Congress would never let the cuts happen. After all, the defense industry strategically tries to have operations in all districts so that every member would feel the pressure to keep funding levels up. But now, he's resigned to inaction.

"Lately I have to tell constituents that I think the sequester is probably going to go through," Moran told The Huffington Post. "The only hope right now is that it goes through and the damage is severe enough that the Congress reverses itself after it starts to be implemented.

"There is a change in attitude within the Republican Party to be willing to cut defense," Moran continued. "And I'm a little surprised myself. But I think that some of the new members are not as protective of defense spending as others have been. They probably haven't been representing their district long enough to realize how important it is in their district or how much defense spending exists in their district.

"I think this is a Republican Party that [chairman of the House Armed Services Committee] Buck McKeon (R-Calif.) doesn't understand." [my emphasis]

Tags: austerity economics, barack obama, comprehensive immigration reform, grand bargain, gun regulation, medicaid, medicare, sequester, social security

The Grand Bargain, alive and kicking (as in kick starving grannies out onto the street)

The throw-grandma-from-the-train movement to cut benefits on Social Security, Medicare and Medicaid continues. And, thanks to our Democratic President who is willing to attack those programs, it may well be a major part of our politics for the indefinite future.

Obama's verbal defense of those programs in his Second Inaugural just last month were apparently all talk: "The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative, they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great."

He didn't even stick with that position for a month. What he was saying today (Remarks by the President) was that the Grand Bargain to cut benefits on Social Security, Medicare and Medicaid is back in play: "The proposals that I put forward during the fiscal cliff negotiations in discussions with Speaker Boehner and others are still very much on the table. I just want to repeat: The deals that I put forward, the balanced approach of spending cuts and entitlement reform and tax reform that I put forward are still on the table."

In the current jargon, "entitlement reform" mean "cut benefits on Social Security, Medicare and Medicaid" and "tax reform" means "cut corporate tax rates," both really bad ideas.

But Social Security is the Mississippi River of all cash flows, as Jamie Galbraith memorably put it. Wall Street wants to get their hands on it. And now that a Democratic President has taken up the cause to start downsizing it along with Medicare and Medicaid, with the current House Democratic leader backing him on cutting Social Security benefits, the financial lobbies have every reason to escalate their efforts.

The Clintons have become very wealthy not only from speaking fees and book contracts but from hedge fund business, as well. Obama can look forward to the same if he continues to pander to the big banks and hedge funds as he's done throughout his time as President. Sadly, Bill Clinton is on the bandwagon, as well. Social Security advocate Richard Eskow of the Campaign for America's Future, in a piece on the anti-SocSec/Medicare/Medicaid campaign (As Public Makes 'Hard Choices' on Social Security, Alan Simpson Ducks His "Moment of Truth" Huffington Post 02/04/2013) mentions the role Clinton is now taking:

It's true that Republicans had the most radical idea of all: privatizing Social Security. But well-funded politicians and ex-pols in both parties are used to create an impression of "bipartisan consensus. The Democratic contingent is led by Bill Clinton, who's become extremely wealthy in the hedge fund world since leaving the presidency.

And while Republicans like Mitt Romney slandered the "47 percent" as irresponsible "takers," Democrats like President Obama unfortunately repeated the "hard choices" mantra while others, like Nancy Pelosi, expressed a disturbing willingness to cut our already-inadequate Social Security benefits.

I can't see exactly how delaying the sequester will do much of anything useful. (News article: Donovan Slack, Obama: Economy will suffer from sequester Politico 02/05/2013) If Congress has to keep delaying them every couple of months, just call the sequesters off. The sequester is yet another contrived crisis. The only reason for Obama to keep playing along with it, resetting the deadline, then resetting it again, and again is for him to pursue his Grand Bargain to cut benefits on Social Security, Medicare and Medicaid.

Obama's Second Inaugural sounded great to Democrats. But this latest development just further confirms my suspicion that he holds labor and progressives in contempt, and thinks that the Democratic base can be satisfied with rhetoric and half-baked deals while he pursues essentially conservative economic goals.

What does that mean for his other progressive priorities, gun regulation and immigration reform?

Seeing that he's now off again in pursuit of the Grand Bargain to cut benefits on Social Security, Medicare and Medicaid, I'm guessing he will try some sort of replay of the health care fight, in which he compromises out major portion, not because he has to but because he doesn't want them, and allow the lobbyists to fill them with loopholes and poison pills. In the case of health care, he took out the public option that the Congressional Progressive Caucus insisted on because the insurance industry opposed it, then postponed implementation of the main provisions until after the 2012 Presidential election, giving a possible Republican President a great chance to scuttle the whole thing.

With gun regulation, he's already signalling a surrender on the assault weapons ban, which would cost the firearms industry money. That's a growing, high-margin end of their business. And may accept a sunset date on the universal background check provision.

With immigration reform, he could accept an absurdly long period for full citizenship and onerous conditions imposed, and then give veto power to some border-state audit committee to certify that "border control" is sufficient before the citizenship provisions take effect. He could also fast-track the visas for high-skilled workers, which business lobbies want badly, while the provisions for all the other undocumented workers gets pushed out to a long and possibly indefinite future.

Obama has to be pushed into doing constructive things consistent with majority opinion and the mandate he won in 2012. He likes to be applauded for progressive rhetoric. But left to his own inclinations, he'd just as soon not be bothered with pushing for progressive goals.

And he would be more than happy to cut benefits on Social Security, Medicare and Medicaid.

Digby is a veteran opponent of the Grand Bargain, and she will no doubt continue to do so at her Hullabaloo blog. For instance: Guess what? Americans aren't selfish freeloaders after all. 02/05/2013.

Tags: austerity economics, barack obama, comprehensive immigration reform, grand bargain, gun regulation, medicaid, medicare, sequester, social security