(T)he chained consumer price index, would lower the annual payment increases for Social Security beneficiaries, saving the government money as it lowers the future monthly income of retirees and disabled Americans. The change would also raise revenue over time because it would cause more taxpayers to wind up in higher marginal brackets.
What neither side seems to have noticed, however, is that the difference between the chained CPI and the standard CPI has been diminishing. That means the impact of switching indexes may not be as great as many assume. The change may still be a good idea, but it probably won’t matter as much as expected.
A decent guess is that, over the next decade, the effect on the deficit of adopting the chained index would be less than $150 billion. Social Security benefits even 20 years after retirement would be reduced by less than 2 percent. This does not amount to bold long-term deficit reduction.
…
Consider what future projections look like if we instead assume that the chained index will grow just 10 basis points a year more slowly than the current indexes. In that case, the deficit reduction from switching to the chained index would be less than $150 billion over 10 years, rather than $340 billion. And the reduction in the long-term Social Security deficit would be about 7 percent, rather than 20 percent.
This would make a pretty big difference in the effect on Social Security benefits. For an 85-year-old who began receiving checks at 65, checks would be about 2 percent less, rather than 6 percent if the chained index were to grow 25 to 30 basis points more slowly than the standard index.
…
President Barack Obama deserves credit for political courage in being willing to adopt the chained CPI — in the face of strong opposition from members of his party. But if switching to the chained index reduces the 10-year deficit by less than $150 billion and the 75-year Social Security actuarial gap by less than 10 percent, can a “grand bargain” built around it really be all that grand?
(Peter Orszag is vice chairman of corporate and investment banking and chairman of the financial strategy and solutions group at Citigroup Inc. and a former director of the Office of Management and Budget in the Obama administration.)
Before we even start to talk about the Social Security cuts in President Obama’s budget in his quest for a “grand bargain” with Republicans, bit the president and House Speaker John Boehner have admitted there is no deficit crisis. As a matter of fact, the deficit has fallen faster in the last three years than it has since World War II
In fact, outside of that post-WWII era, the only time the deficit has fallen faster was when the economy relapsed in 1937, turning the Great Depression into a decade-long affair.
If U.S. history offers any guide, we are already testing the speed limits of a fiscal consolidation that doesn’t risk backfiring. That’s why the best way to address the fiscal cliff likely is to postpone it. [..]
While long-term deficit reduction is important and deficits remain very large by historical standards, the reality is that the government already has its foot on the brakes.
In this sense, the “fiscal cliff” metaphor is especially poor. The government doesn’t need to apply the brakes with more force to avoid disaster. Rather the “cliff” is an artificial one that has sprung up because the two parties are able to agree on so little.
That’s right, the “fiscal cliff”, ‘the deficit” crisis are MYTHS.
Now here is what digby said:
Greg Sargent has frequently made the case that liberals are going to have to choose between the sequester cuts and the Grand Bargain and therefore will need to make the affirmative case for why they are choosing the sequester. [..]
And Greg is probably right that if the Republicans are smart enough to take yes for an answer, the liberals in the House will face the wrath of their Party apparatus and the president (and the liberal establishment) if they end up voting against a Grand Bargain. [..]
This, on the other hand, is a choice between two negatives. Essentially, as before, the White House and the Democratic centrists are holding hostages but this time they’re basically 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 should progressives bear that responsibility? They didn’t get us into this mess.
I say they should just say no. Republicans do it all the time and everybody just throws up their hands and says, “well, I guess we’d better figure out something else.” They should hold fast and say “the sequester sucks and so does the Grand Bargain and we don’t support either one.” Most of the progressives didn’t vote for the sequester in the first place and bear no responsibility for it. (And even those who did have no obligation to defend the monster that everyone assured them had no chance of ever becoming law.) This is a failure of the leadership of both parties and progressives are not required to betray their most fundamental values and defend any of these ridiculous cuts to anyone.
Just say no. The “sequester vs Grand Bargain” is a phony construct made by man, not God, and there’s no reason on earth why any progressive should be forced to own either one. Find another way.
Now matter how you view the cut to Social Security by linking it to the Chained CPI, it is bad policy and even worse politics that will be forever linked to A democratic president, Barack Obama. He owns it. It’s too late to put that back in the can, even if the Republicans reject it out of hand. But worse than that, every Democrat now owns it, too.
“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.
Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.
President Obama will soon release a new budget, and the commentary is already flowing fast and furious. Progressives are angry (with good reason) over proposed cuts to Social Security; conservatives are denouncing the call for more revenues. But it’s all Kabuki. Since House Republicans will block anything Mr. Obama proposes, his budget is best seen not as policy but as positioning, an attempt to gain praise from “centrist” pundits.
No, the real policy action at this point is in the states, where the question is, How many Americans will be denied essential health care in the name of freedom?
I’m referring, of course, to the question of how many Republican governors will reject the Medicaid expansion that is a key part of Obamacare. What does that have to do with freedom? In reality, nothing. But when it comes to politics, it’s a different story.
President Obama picked the very day that new job creation collapsed to propose a deflationary budget deal featuring cuts in Social Security and Medicare. This is perverse economics and worse politics, on several grounds. [..]
But the deal that Obama is trying to coax the Republicans into accepting would cut the budget at this rate for an entire decade. The economics are just insane. There is no evidence that banks are waiting to lower interest rates (which are already rock bottom) or businesses waiting to invest, pending progress on a grand budget bargain. Businesses are hesitating to invest because customers don’t have money in their pockets — and a deflationary budget deal will only make the economy worse.
The politics are worse than the economics. President Obama, violating every rule of smart negotiating, has put his final proposal on the table — cuts in Social Security and Medicare in exchange for the Republicans’ (still imaginary) agreement to raise taxes — before the Republicans have made a single concession.
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.
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.
We must make pols hear our nation’s cry: Pass tougher laws for guns purchases NOW!
We’re all used to hearing people say that patience is a virtue.
I think about patience every day as I continue to regain my speech and the mobility I lost after I was shot in the head two years ago, while meeting with my constituents in the parking lot of grocery store in my district.
I think about patience and determination, because I still wake up every day wanting to make the world a better place.
But lately I’m not feeling too patient toward senators and representatives who are listening to the misinformation that’s out there about universal background checks instead of to their constituents, and saying they may not support common sense solutions to ending gun violence.
President Obama’s plan to include Social Security cuts in his budget plan is well summed up by Vermont Senator Bernie Sanders as a “bitter disappointment.”
Obama closed his 2012 campaign with a populist flourish that seemed to suggest he was finally coming to believe his own rhetoric about the need for growth, as opposed to austerity. The strength of his message earned the president a mandate: a popular vote margin of almost 5 million, a landslide win in the Electoral College and significant gains in Senate and House races.
But, now, he proposes to squander that mandate in pursuit of a “grand bargain” with House Republicans – a bargain that would replace the current approach to calculating cost-of-living increases for Social Security recipients with a “Chained-CPI” scheme. The change will harm not just seniors, children and people with disabilities but a fragile economic recovery.
It’s time to start paying close attention to the mechanisms of the deregulation machine. For the past 30 years, the business lobbies have pushed Congress and the executive branch to disassemble the regulatory system that has protected us from the worst excesses of Wall Street and Big Business. The catastrophic effects of this dismantling are well known — the misbehavior of Wall Street brought us the financial collapse, the global recession, and the dominance of the largest banks being both “Too Big to Fail” and their culpable executives “Too Big to Jail”.
Despite negative public sentiment and the rise of the Occupy movement, the avarice on Wall Street arrogantly continues on. The big banks are now even bigger and more powerful than they were in 2008 when they were bailed out by the U.S. taxpayers.
Surely it has an historical meaning and there are some roundabout descriptions of modern progressivism online like this one from Wikipedia:
Today, members of the Green Party of the United States are most likely to self-identify as liberal progressives. In the U.S. Congress, the Congressional Progressive Caucus is the most liberal wing of the Democratic Party, and it is often in opposition to the more centrist or conservative Democrats who form the Blue Dogs caucus. It is also in near-continuous opposition to the Republican Party.
“The truth of the matter is that my policies are so mainstream that if I had set the same policies that I had back in the 1980s, I would be considered a moderate Republican.”
Further, what does it mean when three quarters of the Congressional Progressive Caucus won’t stand up for the indispensable legacy of the progressive New Deal and Great Society advances, Social Security, Medicare and Medicaid?
For the social compact of the United States, most of the Congressional Progressive Caucus has gone missing.
While still on the caucus roster, three-quarters of the 70-member caucus seem lost in political smog. Those 54 members of the Progressive Caucus haven’t signed the current letter that makes a vital commitment: “we will vote against any and every cut to Medicare, Medicaid, or Social Security benefits — including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need.”
… Addressed to President Obama, the letter has enabled members of Congress to take a historic stand: joining together in a public pledge not to vote for any cuts in Social Security, Medicare or Medicaid. …
The Progressive Caucus co-chairs, Raul Grijalva and Keith Ellison, signed the letter. So did Barbara Lee, the caucus whip. But no signer can be found among the five vice chairs of the Progressive Caucus: Judy Chu, David Cicilline, Michael Honda, Sheila Jackson-Lee and Jan Schakowsky. The letter’s current list of signers includes just 16 members of the Progressive Caucus (along with five other House signers who aren’t part of the caucus).
What about the other 54 members of the Progressive Caucus? Their absence from the letter is a clear message to the Obama White House, which has repeatedly declared its desire to cut the Social Security cost of living adjustment as well as Medicare. In effect, those 54 non-signers are signaling: Mr. President, we call ourselves “progressive” but we are unwilling to stick our necks out by challenging you in defense of Social Security, Medicare and Medicaid; we want some wiggle room that you can exploit.
Now, however, the, “no doubt progressive” President is about to release his budget, which will reportedly contain cuts to programs that have always been the core of progressive policy:
President Obama’s budget proposal to be unveiled next week will include cuts to Social Security and Medicare, according to media reports Friday morning.
The most controversial element of Obama’s proposal is the inclusion of “chained CPI,” the adjustment that would over time reduce cost-of-living increases to Social Security and other federal benefit programs – effectively, a cut to Social Security benefits by tying them to inflation.
Progressives in the Media and the Blogosphere
So while many congressional “progressives” have chosen between their divided loyalties and come up as cowering yes men for the misguided juggernaut of the Obama administration, parts of the progressive media are spouting propaganda:
John Nichols tells only part of the truth in this piece and the failure to represent the whole truth makes it a specious bit of propaganda, that distracts and diverts attention away from those that are carrying out the agenda of the big money forces he decries.
[Perhaps this is a problem created by editing as Nichols is generally a reasonable guy, who has written a number of articles calling for opposition to President Obama’s Chained CPI plan. This was a publication of The Nation magazine, so perhaps they edited it and it represents their editorial position more than Nichols’ opinions and position. Since Nichols is the face, name and voice of this piece, however, the criticism will be directed at him and presumably if he gives a damn about what some blogger says, he can assert that the blame lays elsewhere.]
Nichols explains that in, as he puts it a, “Dollarocracy,” the ideas that get put forward are the ideas that have big money behind them, like cutting Social Security. He goes on to highlight the fact that austerity-loving-corporate-greedheads were able to get, “one of their own,” Paul Ryan on a ballot to run for Veep to push their plans. What Nichols fails to mention is that those austerity-loving-corporate-greedheads were going to win no matter what this election. They already have a Democratic president who is promoting their agenda on the other ticket. Guess what, they won! And there was no chance that they wouldn’t!
How is it that Nichols could have failed to notice and call out the Obama administration and the many Democrats that are performing the bidding of the, “Dollarocracy” with such alacrity these days? Nichols is an experienced pundit, he certainly has been around and allegedly paying attention long enough to know who has been pushing the 1%’s, “Dollarocracy” agenda.
Let’s take a trip through some of the evidence that one would have to ignore to create that Dollarocracy video with such a glaring omission in it…
On this day in 1974, Hank Aaron of the Atlanta Braves hits his 715th career home run, breaking Babe Ruth’s legendary record of 714 homers. A crowd of 53,775 people, the largest in the history of Atlanta-Fulton County Stadium, was with Aaron that night to cheer when he hit a 4th inning pitch off the Los Angeles Dodgers’ Al Downing. However, as Aaron was an African American who had received death threats and racist hate mail during his pursuit of one of baseball’s most distinguished records, the achievement was bittersweet.
Although Aaron himself downplayed the “chase” to surpass Babe Ruth, baseball enthusiasts and the national media grew increasingly excited as he closed in on the home run record. During the summer of 1973 Aaron received thousands of letters every week; the Braves ended up hiring a secretary to help him sort through it.
At the age of 39, Aaron hit 40 home runs in 392 at-bats, ending the season one home run short of the record. He hit home run number 713 on September 29, 1973, and with one day remaining in the season, many expected him to tie the record. But in his final game that year, playing against the Houston Astros (led by manager Leo Durocher, who had once roomed with Babe Ruth), he was unable to achieve this. After the game, Aaron stated that his only fear was that he might not live to see the 1974 season.
Over the winter, Aaron was the recipient of death threats and a large assortment of hate mail from people who did not want to see a black man break Ruth’s nearly sacrosanct home run record. The threats extended to those providing positive press coverage of Aaron. Lewis Grizzard, then editor of the Atlanta Journal, reported receiving numerous phone calls calling them “nigger lovers” for covering Aaron’s chase. While preparing the massive coverage of the home run record, he quietly had an obituary written, scared that Aaron might be murdered.
Sports Illustrated pointedly summarized the racist vitriol that Aaron was forced to endure:
“Is this to be the year in which Aaron, at the age of thirty-nine, takes a moon walk above one of the most hallowed individual records in American sport…? Or will it be remembered as the season in which Aaron, the most dignified of athletes, was besieged with hate mail and trapped by the cobwebs and goblins that lurk in baseball’s attic?”
Aaron received an outpouring of public support in response to the bigotry. Newspaper cartoonist Charles Schulz satirized the anti-Aaron camp in a series of Peanuts strips printed in August 1973, in which Snoopy attempts to break the Ruth record, only to be besieged with hate mail. (As Lucy puts it in the August 11 strip, “Hank Aaron is a great player…but you! If you break Babe Ruth’s record, it’ll be a disgrace!”) Babe Ruth’s widow, Claire Hodgson, even denounced the racism and declared that her husband would have enthusiastically cheered Aaron’s attempt at the record. Ruth, who was unprejudiced, had himself been subjected to racial taunts during his youth, by those who fancied that he had Negroid features.
As the 1974 season began, Aaron’s pursuit of the record caused a small controversy. The Braves opened the season on the road in Cincinnati with a three-game series against the Cincinnati Reds. Braves management wanted him to break the record in Atlanta, and were therefore going to have Aaron sit out the first three games of the season. But Baseball Commissioner Bowie Kuhn ruled that he had to play two games in the first series. He played two out of three, tying Babe Ruth’s record in his very first at bat off Reds pitcher Jack Billingham, but did not hit another home run in the series.
The team returned to Atlanta, and on April 8, 1974, a crowd of 53,775 people showed up for the game-a Braves attendance record. In the fourth inning, Aaron hit career home run number 715 off Los Angeles Dodgers pitcher Al Downing. Although Dodgers outfielder Bill Buckner nearly went over the outfield wall trying to catch it, the ball landed in the Braves’ bullpen, where relief pitcher Tom House caught it. While cannons were fired in celebration, two white college students, Cliff Courtney and Britt Gaston, sprinted onto the field and jogged alongside Aaron for part of his circuit around the bases, temporarily startling him. As the fans cheered wildly, Aaron’s parents ran onto the field as well.
Dodgers broadcaster Vin Scully addressed the racial tension – or apparent lack thereof – in his call of the home run:
“What a marvelous moment for baseball; what a marvelous moment for Atlanta and the state of Georgia; what a marvelous moment for the country and the world. A black man is getting a standing ovation in the Deep South for breaking a record of an all-time baseball idol. And it is a great moment for all of us, and particularly for Henry Aaron. … And for the first time in a long time, that poker face in Aaron shows the tremendous strain and relief of what it must have been like to live with for the past several months.”
A few months later, on October 5, 1974, Aaron hit his 733rd and final home run as a Brave, which stood as the National League’s home run record until it was broken in 2007. Thirty days later, the Braves traded Aaron to the Milwaukee Brewers for Roger Alexander and Dave May. On May 1, 1975, Aaron broke baseball’s all-time RBI record, previously held by Ruth with 2,217. That year, he also made the last of his 21 record-tying (with Musial and Mays) All-Star appearances; he lined out to Dave Concepcion as a pinch-hitter in the second inning. This All-Star game, like his first in 1955, was before a home crowd at Milwaukee County Stadium.
On July 20, 1976, Hank Aaron hit his 755th and final home run at Milwaukee County Stadium off Dick Drago of the California Angels.
On this day in 1974, 
As the 1974 season began, Aaron’s pursuit of the record caused a small controversy. The Braves opened the season on the road in Cincinnati with a three-game series against the
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