Tag Archive: Chained CPI

Feb 26 2014

NRCC Bashing Democrats for Supporting Chained CPI

You can tell it’s an election year, all the hypocrisy comes out of the closet:

After spending weeks subjecting the public to unfounded and widely debunked claims that Obamacare contains a hidden “bailout” for private insurers, Republicans have undertaken a complete reversal, and are attacking Democrats for cutting corporate welfare for insurance companies by too much.

Specifically, they’re attacking the Affordable Care Act’s reduction in overpayments to carriers who participate in Medicare Advantage, reflected in lower payment rates for program providers, which were officially announced late last week. [..]

When confronted, they retreat from pretending to oppose the cuts on the merits, to claiming the real problem is that Democrats used the savings from the cuts to fund Obamacare. But this is a non sequitur. A diversion. The attacks specifically express outrage on behalf of seniors who, Republicans claim, will lose doctors or get stuck with higher premiums specifically as a result of the ACA’s Medicare Advantage cuts.

But remember, Republicans actually support the cuts. All of these supposedly horrible things would happen under their plan, too, regardless of how the savings are spent. So right away it’s clear that the attacks are straightforwardly deceitful.

While some the beltway deficit scolds mourn the death of “entitlement reforms,” the The National Republican Campaign Committee has begun attacking Democrats for supporting Simpson-Bowles:

The National Republican Congressional Committee (NRCC) tried a political ju-jitsu on Thursday as it sought to turn former state CFO Alex Sink’s attacks on David Jolly on Social Security against her. Sink, the Democratic candidate, takes on Republican Jolly and Libertarian Lucas Overby in a special congressional election for an open seat in Pinellas County on March 11.

On Thursday, the NRCC bashed Sink for saying she supported Simpson-Bowles.

What digby said:

I have never understood why Democrats who have to run for office are so wedded to the idea that they will be rewarded for being “the adults in the room” and doing the “hard stuff” like cutting Social Security and Medicare benefits but they do. You’d think they’d remember what happened to them in 2010 when the Republicans ran against the Medicare cuts in the health care reforms by portraying them as monsters turning old people into Soylent Green. But they didn’t.

The president may have decided to keep his proposal to cut benefits from his new budget, but it’s quite clear from the talking points that they still very much want to get “credit” for being willing to do it.

Supporting cuts the social safety net, especially in the state of Florida, is not going to fly very well with elderly voters. And, yes, they do vote. So why aren’t Democrats giving the people what they want, an expansion of Social Security and open Medicare to all?  

Nov 19 2013

Retirement in Crisis

Increasingly over the last few months the sensible people of congress have gotten on board with the idea that Social Security should be expanded. With the failure of many 401k’s and inadequate pension funds, many seniors and future retirees are more reliant on Social Security for a substantial part of their retirement plans. Senators Tom Harkin (D-Iowa), Bernie Sanders (I-Vt.), and Sherrod Brown (D-Ohio) have proposed that instead of switching to a “chained” consumer price index that cuts retiree benefits, the nation should adopt CPI-E, which measures the actual cost of living for the elderly and would raise benefits to meet actual needs.

The latest to voice support for this idea is Massachusetts Senator Elizabeth Warren who took to the Senate floor to criticize the Washington Post‘s editorial that said  called expanding Social Security “wrongheaded” and suggested the nation should instead be more concerned about the higher percentage of children living in poverty. Sen. Warren called this the “uglier side” of the debate on Social Security.

Floor Speech by Senator Elizabeth Warren (pdf)

The Retirement Crisis

November 18, 2013

As Prepared for Delivery

(Mr./Madame) President, I rise today to talk about the retirement crisis in this country – a crisis that has received far too little attention, and far too little response, from Washington.

I spent most of my career studying the economic pressures on middle class families – families who worked hard, who played by the rules, but who still found themselves hanging on by their fingernails. Starting in the 1970s, even as workers became more productive, their wages flattened out, while core expenses, things like housing and health care and sending a kid to college, just kept going up.

Working families didn’t ask for a bailout. They rolled up their sleeves and sent both parents into the workforce. But that meant higher childcare costs, a second car, and higher taxes. So they tightened their belts more, cutting spending wherever they could. Adjusted for inflation, families today spend less than they did a generation ago on food, clothing, furniture, appliances, and other flexible purchases. When that still wasn’t enough to cover rising costs, they took on debt credit card debt, college debt, debt just to pay for the necessities. As families became increase singly desperate, unscrupulous financial institutions were all too happy to chain them to financial products that got them into even more trouble — products where fine print and legalese covered up the true costs of credit. These trends are not new, and there have been warning signs for years about what is happening to our middle class. One major consequence of these increasing pressures on working people – a consequence that receives far too little attention – is that the dream of a secure retirement is slowly slipping away.

A generation ago, middle – class families were able to put away enough money during their working years to make it through their later years with dignity. On average, they saved about 11% of their take home pay while working. Many paid off their homes, got rid  of all their debts, and retired with strong pensions from their employers. And where pensions, savings, and investments fell short,

they could rely on Social Security to make up the difference. That was the story a generation ago, but since that time, the retirement landscape has shifted dramatically against our families. Among working families on the verge of retirement, about a third have no retirement savings of any kind, and another third have total savings that are less than their annual income. Many seniors have seen their housing wealth shrink as well. According to AARP, in 2012, one out of every seven older homeowners was paying down a mortgage that was higher than the value of their house.

While President Barack Obama and House Minority Leader Nancy Pelosi have expressed their support for cuts to Social Security as part of a budget agreement to trim the deficit, which Social Security does not contribute to, most Democrats wisely have said ruled that out in the current debate talks. We need to make sure that any cuts to the Social Security benefits of our most vulnerable citizens is taken off the table permanently.

 

Nov 07 2013

Rantings of a Frustrated Blogger: Expanding Social Security

As recounted by relapsed blogger David Dayen, intrepid blogger, economist and former college professor Duncan Black, aka Atrios, became frustrated with stagnating wages over the last ten years that have been putting working class families at risk of being unable to sustain their standard of living past retirement.

(I)n late 2012 he embarked on a sustained crusade, on his blog and in a series of columns for USA Today, to inject a single idea into America’s policy discourse: “We need an across-the-board increase in Social Security retirement benefits of 20 percent or more,” he declared in the opening of a column for USA Today. “We need it to happen right now.”

The proposal was not exactly attuned to the political winds in Washington. Indeed, for anyone inclined to think in terms of counting potential votes in Congress-especially this Congress-the idea of expanding Social Security is the epitome of a political non-starter. Black’s proposal was attuned, however, to a mounting pile of research and demographic data that describes a gathering disaster. The famously large baby boom generation is heading into retirement. Thanks to decades of stagnant wages and the asset collapse of the Great Recession, more than half of American working-class households are at risk of being unable to sustain their standard of living past retirement. To put it even more starkly, according to research by the economists Joelle Saad-Lessler and Teresa Ghilarducci, 49 percent of middle-class workers are on track to be “poor or near poor” after they retire.

There is very little safety net left to break this fall. The labor market for older workers is bleak. Private pensions are largely a thing of the past. Private savings are so far gone that some 25 percent of households with 401(k) and other retirement plans have raided them early to cover expenses, and a growing number of Americans over age 50 find themselves accumulating, not settling, debt. On the whole, 401(k)s have proved a “disaster,” as Black puts it, one that has enriched the financial sector but lashed the country’s retirement security to a volatile stock market-and left 75 percent of Americans nearing retirement age in 2010 with less than $30,000 in their accounts.

What’s left? Social Security. Though it was never meant to be a national retirement system all by itself, that’s increasingly what it has become. For Americans over age 65 in the bottom half of the income distribution, Social Security makes up at least 80 percent of retirement income.

In one of those columns in March of this year, Black used the “three legged stool” metaphor to bolster his argument to expand Social Security:

According to the Pew Research Center, the median household wealth for those aged 65+ is about $170,000. While that sounds like a significant amount of money, as Dean Baker of the Center for Economic and Policy Research pointed out, this is actually a trivial amount of wealth for people with little or no income other than Social Security benefits. Remember that this figure includes housing wealth. Even if it was a bunch of cash in a bank account, it wouldn’t actually provide for a significant supplement to other retirement income, but the reality is that many people have a house and not much else. [..]

Social Security was envisioned as one leg of a three-legged stool of retirement, along with employer pensions and private savings or insurance (though the metaphor itself was devised after its creation). The problem is that two of those legs have shrunk significantly. This is not a stool one can comfortably sit on. This is not a stool most people will be able to sit on at all. The system, as envisioned, is failing.

We can goad and cajole people into saving. We can provide incentives for people to save for their retirement, and penalize them for raiding those funds before they retire. We can subsidize employer contributions to retirement funds.

But we have been doing all of these things for decades, and they haven’t worked. The majority of people nearing retirement will not have sufficient funds to retire with anything resembling economic security and comfort.

Well our frustrated blogging buddy’s idea is at long last taking root. Two Democratic Senators, Tom Harkin of Iowa and Mark Begich of Alaska, have introduced legislation that not only would expand Social Security but strengthen it.

The Strengthening Social Security Act of 2013 would:

Strengthen Benefits by Reforming the Social Security Benefit Formula: To improve benefits for current and future Social Security beneficiaries, the Act changes the method by which the Social Security Administration calculates Social Security benefits.  This change will boost benefits for all Social Security beneficiaries by approximately $70 per month, but is targeted to help those in the low and middle of the income distribution, for whom Social Security has become an ever greater share of their retirement income.

Ensure that Cost of Living Adjustments Adequately Reflect the Living Expenses of Retirees: The Act changes the way the Social Security Administration calculates the Cost of Living Adjustments (COLA).  To ensure that benefits better reflect cost increases facing seniors, future COLAs will be based on the Consumer Price Index for the Elderly (CPI-E).  Making this change to Social Security is expected to result in higher COLAs, ensuring that seniors are able to better keep up with the rising costs of essential items, like health care.

Improve the Long Term Financial Condition of the Trust Fund: Social Security is not in crisis, but does face a long-term deficit.  To help extend the life of the trust fund the Act phases out the current taxable cap of $113,700 so that payroll taxes apply fairly to every dollar of wages.

The legislation has the support of AFL-CIO, AFSCME, the Alliance for Retired Americans, the National Organization for Women (NOW), the National Education Association, Paralyzed Veterans of America, Strengthen Social Security Coalition, Social Security Works, the United Automobile Aerospace & Agricultural Implement Workers of America (UAW), United Steelworkers, MoveOn.org and others.

The Harkin/Begich bill has now been endorsed by Ohio’s Senator Sherrod Brown (D) who has also introduced legislation that would change the cost Of living formula for Social Security to better reflect seniors’ true expenses:

With the introduction of several proposals that would reduce Social Security benefits for seniors by changing the formula used to calculate annual cost-of-living adjustments (COLA), U.S. Sen. Sherrod Brown (D-OH) today joined the National Committee to Preserve Social Security and Medicare (NCPSSM) to announce the Consumer Price Index for Elderly Consumers Act.  The new legislation would change the COLA formula for Social Security to more accurately reflect the expenses of senior citizens. Because of the method by which inflation is calculated, seniors and other Social Security recipients did not receive a COLA in 2010 and 2011, even though the price of prescription drugs, food, energy, and other necessities continued to rise. [..]

Social Security COLAs are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).  The CPI-W was chosen as the measure of inflation because it was the only measure available at the time the automatic COLA was established in 1972.  The CPI-W measures changes in the prices of goods and services purchased by those who earn more than half their income from clerical or wage occupations.  However, the CPI-W formula only represents about 32 percent of the U.S. population and does not accurately represent the inflation experience of older Americans. According to the Congressional Research Service, between 1982 and 2009, the cost of living under the CPI-W rose at an average rate of 2.9 percent, while the cost of living for seniors-as measured by an experimental CPI-E-rose at a rate of 3.2 percent.

Brown’s legislation would formalize a Consumer Price Index for the Elderly (CPI-E). The CPI-E would take into account seniors’ specific consumption habits, including increased prescription drug and energy costs, and would be used to determine the COLA for Social Security benefits.

It is time for President Barack Obama and congressional Democrats start acting like progressives and back both the Harkin/Begich and Brown bill. The president and the Democratic leadership should remove Social Security as a bargaining chip from the faux debt/deficit austerity negotiations and start protecting some of our most vulnerable citizens.

You can support the Strengthen Social Security Act (S.567) by signing this petition

Thanks, Atrios.

May 07 2013

Obama Losing Democratic Support on Social Security Cuts

Eight of the 14 Democrats who are up for reelection in 2014, three from red states, have taken a stand against Pres. Obama’s proposed Social Security cuts:

The majority of Senate Democrats running for reelection in 2014, including three running in red states, have broken with President Barack Obama and are opposing his effort to cut Social Security benefits, imperiling the austerity project known as the “grand bargain.” [..]

Democratic Sens. Kay Hagan (N.C.), Mark Begich (Alaska) and Mark Pryor (Ark.), all running in states won by Republican Mitt Romney in 2012, have publicly opposed the president’s effort, going so far as to co-sponsor a Senate resolution against chained CPI last week. Sens. Al Franken (D-Minn.), Jeff Merkley (D-Ore.), Jack Reed (D-R.I.) and Brian Schatz (D-Hawaii), running in bluer states, also co-sponsored the resolution. [..]

Other Senate Democrats up for reelection who didn’t sign the resolution were still unfavorably disposed toward chained CPI. Sen. Jeanne Shaheen (D-N.H.) opposes the cost-of-living cut, her office confirmed to HuffPost, and has said Social Security should be off the table in debt talks.

Sen. Chris Coons (D-Del.) has been open to the chained CPI cut, but insisted a “circle of protection” must be established for the most vulnerable Americans.

Alaskan Senator Mark Begich will introduced two bill that would protect Social Security benefits:

Begich plans to introduce the Protecting and Preserving Social Security Act and the Social Security Fairness Act of 2013 when he returns to Washington, DC next week. He says his plan has three points. The Protecting and Preserving Social Security Act would remove a cap on high income contributions. The cap is now at 113,700 dollars. Removing the cap would make high income earners pay into Social Security just like everyone else, he says. [..]

The second part of that bill would revise how SS payments are adjusted to better reflect how America’s senior spend their income. Currently, payments are based on a Consumer Price Index model that does not accurately reflect higher costs seniors pay, for medications, for example. The bill would create a CPI – E for elders.

The Social Security Fairness Act would remove penalties that are now placed on retirees who worked more than one job, paid into Social Security, but then retired under a different retirement system. Under current law, they are denied their Social Security benefits Many government workers and some teachers in Alaska fall into this category.

It’s about time the Democrats stood up to the Republican in the White House.

Apr 11 2013

Say No to Cuts to Social Security

President Obama formerly released his budget for 2014. As, expected it contained the cuts to Social Security and Medicare that have are an anathema to the left. As has been pointed out before on this site, these proposals for the sake a few dollars in revenue increases and a paltry $50 billion investment for infrastructure improvement. That is bad policy and even worse politics. If you don’t believe that, well here is a sample of the criticism from the right:

Americans for Tax Reform, the advocacy group that asks lawmakers to sign a formal “Taxpayer Protection Pledge,” said Tuesday that chained CPI violates the pledge.

“Chained CPI as a stand-alone measure (that is, not paired with tax relief of equal or greater size) is a tax increase and a Taxpayer Protection Pledge violation,” the group said in a blog post.

Anti-tax crusader Grover Norquist, leader of the organization, criticized the policy via Twitter on Wednesday. “Chained CPI is a very large tax hike over time,” Norquist wrote. “Hence Democrat interest in same.”

The Congressional Budget Office estimates (pdf) that chained CPI would reduce Social Security spending by $127 billion and increase tax revenue by $123 billion over 10 years.

When asked Friday if chained CPI represents a tax hike on the middle class, White House spokesman Jay Carney said, “I’m not disputing that.

Can you hear the political ads attacking Democrats with this? So much for electoral victory in 2014, Obama just sold that prospect for what? Trying to make the point that Republicans are intransigent? American already know that. A few dollars of revenue from tax reforms that will be changed the first chance the Republicans get, like the debt ceiling hostage situation? We seen this scene played out how many times with Obama caving to Republican demands because some vague fear about the economy.

Predictably the left is outraged and there are threats from left wing organizations to primary any Democrat who votes for chained CPI.

A party rift on Obama budget

Warren joins lawmakers in criticizing Obama budget

A coalition of prominent Democrats, including many from New England, slammed President Obama’s $3.8 trillion budget blueprint Wednesday for its proposed changes to the Social Security payment formula and Medicare, opening a widening rift between the president and members of his own party.

Senator Elizabeth Warren of Massachusetts said she was shocked by Obama’s proposal to recalculate the cost of living adjustment for Social Security beneficiaries by linking it to a different version of the Consumer Price Index, known as the “chained CPI.” [..]

“In short, ‘chained CPI’ is just a fancy way to say ‘cut benefits for seniors, the permanently disabled, and orphans,'” Warren fired off in an e-mail to supporters. She related the experience of her brother, David Herring, a military veteran and former small business owner who lives on monthly Social Security checks of $1,100. “Our Social Security system is critical to protecting middle-class families,” she wrote, “and we cannot allow it to be dismantled inch by inch.” [..]

Representative Edward Markey of Massachusetts called “chained CPI” an abbreviation for “Cutting People’s Income, a wrong-headed change that would go back on the promise we make to our senior citizens.”

“Tea Party Republicans may have pushed the president into many of these difficult decisions, but it still does not make this budget right nor fair, especially for those Americans who need help the most,” Markey said.

MSNBC’s All In host Chris Hayes discussed the chained CPI with Sen. Jeff Merkley (D-OR), Jonathan Alter, Heather McGhee, and Mattie Duppler, Americans for Tax Reform.

Transcript for this video can be read here

This a direct attack by a Democratic president on our earned benefits. Time to start calling and don’t stop until this deal is dead and buried.

The White House switchboard is 202-456-1414.

The comments line is 202-456-1111.

Numbers for the Senate are here.

Numbers for the House are here.

h/t Susie Madrak at Crooks and Liars

Apr 08 2013

What ‘s Being Said About Social Security Cuts

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.

Apr 05 2013

Obama Budget: From Bad to Worse

Pres. Barack Obama has released his proposed budget that include cuts Medicare and linking Social Security payments to Chained CPI in hopes (there is that ugly word again) of gaining “bipartisan” (another bad word) from Congressional Republicans. Never mind that the fact that the majority of voters do not want cuts to the top three social safety programs, the president is willing to sacrifice the disable, veterans and the elderly for a few tax changes that even if passed, would most likely be reversed in the next six months. This is not “compromise,” it is a sell out of the majority of Americans.

Huffington Post‘s Sam Stein has the breakdown of the proposal that will be releases in all its full gory details next Wednesday:

   

  • The budget would reduce the deficit by $1.8 trillion over ten years — $600 billion of this reduction would come from revenue raisers, and $1.2 trillion would come from spending reductions and entitlement reforms;
  • It would change the benefit structure of Social Security (chained-CPI);
  • It would means test additional programs in Medicare;
  • All told, it would include $400 billion in health care savings (or cuts);
  • It would cut $200 billion from other areas, identified by The New York Times as “farm subsidies, federal employee retirement programs, the Postal Services and the unemployment compensation system;”
  • It would pay for expanded access to pre-K (an Obama priority) by increasing the tobacco tax;
  • It would set limits on tax-preferred retirement accounts for the wealthy, prohibiting individuals from putting more than $3 million in IRAs and other tax-preferred retirement accounts;
  • And it would stop people from collecting full disability benefits and unemployment benefits that cover the same period of time.

Dean Baker shows that these cuts over time are worse for seniors than for the rich:

By comparison, Social Security is about 70 percent of the income of a typical retiree. Since President Obama’s proposal would lead to a 3 percent cut in Social Security benefits, it would reduce the income of the typical retiree by more than 2.0 percent, more than three times the size of the hit from the tax increase to the wealthy.

Chained CPI impact on Income photo btp-chained-cpi-obama_zpsdeb1873b.jpg

The congressional Democratic apologists insist that “certain lines won’t be crossed” which translates that if Republicans realize they can get the cuts to “entitlements’ that they want by temporarily sacrificing the tax and revenue increases this is a done deal.

The president is willing to agree to the entitlement cuts only in exchange for tax hikes in other areas.

“The president has made clear that he is willing to compromise and do tough things to reduce the deficit, but only in the context of a package like this one that has balance and includes revenues from the wealthiest Americans and that is designed to promote economic growth,” the administration official said. “That means that the things like CPI that Republican Leaders have pushed hard for will only be accepted if Congressional Republicans are willing to do more on revenues.”

This is political suicide for Democrats up for election. The Republicans will forever blame Democrats for destroying these programs.

As Paul Krugman points out, this makes no sense other than just Pres. Obama’s need to seek approval of the “Serious People:”

So what’s this about? The answer, I fear, is that Obama is still trying to win over the Serious People, by showing that he’s willing to do what they consider Serious – which just about always means sticking it to the poor and the middle class. The idea is that they will finally drop the false equivalence, and admit that he’s reasonable while the GOP is mean-spirited and crazy.

But it won’t happen.

No, that won’t happen because underneath it all this is what Obama has wanted all along and has continuously said so since 2006. It’s not the GOP that is “mean-spirited and crazy” it’s Obama.

Mar 27 2013

Protecting Social Security from Inaccurate Accounting with an Agenda

I was asked to contribute to the Daily Kos Social Security blogathon today to draw attention to the neoliberal attack on it. I hope you visit and like my contribution.

I have referenced this before, but there hasn’t really been enough of a movement on the this issue, and it’s an important one. It’s specifically important right now when Washington DC is completely stuck on stupid in a self created crisis. This crisis started in 2010 when the debt ceiling was not secured in the Bush tax cut deal with Republicans by President Obama and Senate Majority Leader Harry Reid. Many of us predicted it would lead to the debt ceiling debacle in 2011 which in turn led to the fiscal cliff negotiations and the sequester that is now a reality.

However, it could end anytime with House Democratic Representative John Conyer’s bill to just repeal the sequester; that is, if he got proper support. I think that needs to be a goal along with forever protecting Social Security from neoliberal economics and the politicians that support it. After all, this sequester was a conscious bipartisan decision on their part to put Social Security in danger now that a 130 billion net cut within the chained(superlative) CPI is now on the White House’s website in its proposal to stand in place of the sequester.

What we are hearing to justify it are not only exaggerations and lies about Social Security being unsustainable, those lies are based on inaccurate accounting standards that have pervaded our entire government; the CBO, and yes, even the Social Security Trustees Board itself at times over the years. Let’s face it; the Social Security Trustees Board has a broad history of being overly pessimistic.

Mar 27 2013

Dick Durbin’s new Social Security reform commission

Have you heard about Dick Durbin’s proposal for a new Social Security reform commission?  It sounds remarkably like the failed Simpson-Bowles Catfood Commission, complete with special rules that allow its recommendations, if approved by the commission, to take the express route to the floor of Congress for a vote with no amendments and limited debate.  

The number two Democrat in the Senate championing this bipartisan bill was asked if this new commission would be like the Greenspan commission of the 1980’s and he said that he prefers to refer to it as similar to Simpson-Bowles.  One of the most interesting things about it is that this time, the commission won’t be dissolved after it finishes its work.  It comes back to life every ten years.

So while we are very happy that the Senate rejected Chained CPI in the budget that they passed last week, the reason why it was rejected is most likely because a separate commission for “reforming” Social Security is on the way, and there are other reasons to use caution while considering the weight and effect of the Sanders amendment.

In a recent article, Dean Baker wonders why the media elites did not find the Sanders amendment to be newsworthy.  I agree with his points about the national media corruption on the subject, and that they have been pushing their favorable opinion on cuts, and how the facts and arguments against the cuts have been curiously absent in their reporting and their programs.

Senate Unanimously Votes Against Cuts to Social Security: Media Don’t Notice

This is why the vote on the Sanders amendment should have been newsworthy. Here was an opportunity for all the senators who have explicitly or implicitly supported the adoption of the chained CPI to step up and say why the switch to the chained CPI was a good and necessary measure. However, not one senator was prepared to stand up and argue the case. Not one member of the senate wanted to go on record in support of this cut to Social Security.

With all the Republicans who pronounce endlessly on the need to cut entitlement spending, there was not a single Republican senator who was prepared to say that switching the Social Security COLA to a chained CPI was a good idea. And even though President Obama has repeatedly stated as clearly as he could that he supported the switch to a chain CPI, there was not one Democratic senator who was prepared to stand up and speak in solidarity with the president.

But let’s not get complacent. There is nothing that the media elite and the proponents of Social Security cuts would like more than for us to let our guard down and say “phew, now we can relax because the Senate said they oppose chained CPI cuts to Social Security.”  In fact, it would not surprise me at all if the reason that this amendment was allowed to the Senate floor by the Democratic leadership was that it might calm down the grassroots left and organizations like AARP and give us a false sense of security, resulting in less organizing, less protesting, while they form a new commission prepare the way for the cuts that they are clearly determined to impose.  

The people in power who want to cut Social Security have been working at this for decades, with renewed fervor in recent years, some of them spending millions for astroturf groups, propaganda campaigns, and influence over elected officials.  One non-binding amendment in the Senate is no hurdle for them and if anything, I believe they will try to use it to their advantage.

Some other cautions about the Sanders amendment:  

1) The amendment was framed as opposition to using chained CPI for veterans benefits.

2) The amendment is non-binding.

3) While Sen. Sanders tried to get a roll call vote, he was persuaded by Sen. Murray to accept a voice vote, so none of the Senators, except the sponsors of the amendment, are on the record. The sponsors are: Sens. Bernie Sanders (I-Vt.), Tom Harkin (D-Iowa), Mazie Hirono (D-Hawaii) and Sheldon Whitehouse (D-R.I.).  Four senators.

4) Sen. Burr of North Carolina is on the record as saying he “supported protecting veterans, but supported using chained CPI elsewhere”.

Mar 05 2013

“Strengthening Social Security” and Other Euphemisms

strengthen

Strengthen – example 1.)  

As a seventh grader, Victor Alcantara towered over his peers. Already six feet tall and a substantial 190 pounds, Victor was well prepared by nature for what gave him the greatest pleasure – being a thug.  Victor was not driven by circumstances into his chosen career field. He had an unremarkable but perfectly serviceable intellect.  

His father was a University professor and his mother was a lawyer.  That Victor lacked their passion for academic acheivement was something of an irritant to them as were the frequent calls from school administrators and the irate parents of Victor’s victims.

Victor had wisely chosen to form a strategic partnership with the next largest boy in seventh grade, Mark Ballis, who had been held back a couple of times  making him the oldest seventh grader in the entire school system.  Mark was neither tremendously bright nor capable, but generally not a bad sort of kid and Victor had decided that he needed something of a life remake.  As part of Victor’s remake, he had renamed him, “Spike” and had had spent considerable effort on tutoring him as to how to comport himself with a certain thuggish silence and an attitude of cool equanimity.  Spike became a perfect henchman.

Victor and Spike, while often scheming greater exploits mostly engaged in classic bullying, shaking down kids in the halls and at recess for their lunch money.  Victor’s instincts led him to choose the social misfits, the nerds and the fat kids as his victims, steering clear of the popular kids.  

One day, Victor and Spike had cornered a recently arrived fat kid on the playground.  Victor got close up to the kid so that he had to look up at him at a sharp angle and pressed his demand.  “You kind of bother me looking like that, I think that you should give my associate here Spike your lunch money.”

Normally, the implied threat of violence and the innate desire to flee caused most kids to hurriedly comply with Victor’s demands, but this kid did not seem to be in any hurry to comply.  Victor leaned closer as the kid asked him, “What do you need it for?”

Nobody had ever asked Victor a question that went to the purpose of his enterprize before and he didn’t have a quick answer ready.  His brain raced as he stalled for time.  He fixed his portly interlocutor with an angry stare, the kind he had practiced in the mirror hundreds of times, but the kid just stood there, relaxed and expectant.

Then, from somewhere, Victor knew not where, the words came to him and he delivered them with a patient, but subtly insistent tone.  “This isn’t about our needs.  This is about you.  You need to lose some weight and toughen up a bit.  We will strengthen your ability to help yourself by removing one of the causes of your problem.  Now, are you going to hand over the money or do we have to work harder to strengthen you?”

Victor, now an old man sitting in his favorite chair, reflected that this was the turning point in his life where he transitioned from being a mere thug to becoming a politician.

Strengthen – example 2.)  

Victor sped into the Gas and Go on Bynum Road. He hopped out of his gaudy Hummer with enormous graphics that read, “Alcantara – County Executive” adorning all visible sides and the hood.  Heading straight for the office, he bellowed out to the man behind the counter, “Johnson, I need to talk to you now!”  

Walter “Butch” Johnson closed the cash register, signalled to the pimply faced kid dispensing a hot dog to a customer to take over and shuffled into his office.  Victor was seated behind the desk looking around at Butch’s family pictures on the left by the stapler and the calculator.  “Sit down Butch,” Victor said.

Victor Alcantara, now in his 30’s was the owner of a chain of gas station convenience stores and had recently been elected County Executive.  Victor now needed to scrape up some money to purchase a sand and gravel pit.  All of the pieces were in place.  He had installed Mark “Spike” Ballis as the County’s head of Public Works who would approve the contract with the County for sand and gravel and then the taxpayers could contribute directly to his success.  Now all he needed was a bit more capital to swing the deal.

“Butch,” he started, “I really appreciate the hard work you’ve been doing here, doing without an assistant manager, working double shifts and keeping down the costs of hiring kids to work the store in these tough times.”  Butch nodded and wondered when the pain would come.  “So I’ve been trying to find a way to reward your efforts.  I wanted to be able to tell you that we’d finally be able to give you and all of the managers a raise, but, the money’s just not there for that.”  Victor paused and gave Butch the compassionate look that he’d been working on in the mirror and had deployed repeatedly at events while campaigning for office.  Seeing the look, Butch thought to himself, oh damn, here it comes now.

Victor launched back in to his spiel, “So I thought, I don’t have the money,

because times are tough.  Let me tell you, though your store is a consistent performer, Butch, there have been a number of times I’ve thought that maybe I’d have to shut down a few stores.  So I thought,  what other sort of thing can I do for my people?  Then I got to thinking about you, Butch.  You’ve got a family and what you need is security.  The security that comes from knowing that the company you work for is strong and can continue to keep you employed.”

Victor suddenly got to the heart of his pitch. “So, I’ve decided to strengthen you by strengthening the company, Butch.  From today forward, everybody’s pay will be cut back to minimum wage.  Your paycheck won’t need to go down, you can keep on working all of the hours that you want, Butch, and the company can afford to keep paying you and everyone else.  So, that’s what I am working to give everybody here, a strengthened company and strengthened employees.  That security should really help you, Butch, now that your third child is on its way, right?”  Butch nodded his head while still in the process of making some mental calculations as to how the hell he was going to keep his family afloat while Victor sprang to his feet, slapped Butch on the back as he worked his way out the door and thought to himself, “one down, 27 to go.”

Strengthen – example 3.)

Victor sat in the den surrounded by mementoes of his long political career.  His eyes scanned over the walls covered with pictures of himself with presidents and other congressmen. There were assorted awards and trophies imparted by a mixture of lobbyists, corporations and organizations, pictures of himself on the podium at the Republican National Convention, CPAC, playing tennis at Kennebunkport.  His eyes fell on the picture given pride of place in the room that had hung in his congressional office for years.  It was a picture taken when he visited an industrial hog farm many years ago. It showed him and the farmer in the foreground, and as far as the eye could see were pigs, tightly penned in row after row of cages with mounds of food in front of them and a conveyor belt behind them to take away their poop.  The picture had become for Victor a visual metaphor for his constituents and the public in general.

Victor looked down and began to read aloud from an article on his laptop:

Congressional Democrats, led by House Minority Leader Nancy Pelosi (Calif.), signaled greater willingness on Wednesday to cut Social Security benefits … Pelosi told reporters on Capitol Hill that a cut proposed by President Barack Obama in the fiscal cliff negotiations would in fact

strengthen” the program, echoing the claims often made by Republicans about entitlement programs they want to slash. …

The cut involves swapping out the traditional method for calculating cost of living increases, based on the current standard for measuring inflation, for something called a chained CPI, or chained Consumer Price Index.

The cuts would start small, but wind up costing beneficiaries thousands of dollars over time … Pelosi wrapped both her arms around it Wednesday, insisting she does not regard it as a “cut.”

Victor stared at his laptop in disbelief for a moment and then erupted, “Goddamn, I can’t stand that Obama, but I have to admit, the man has cojones!  Strengthening Social Security my ass!  If I had proposed a scam like that in my day, they would have relegated my ass to the “crazy uncle” wing of the party!  That son-of-a-bitch is sending ’em off to the slaughterhouse and they still think he’s just the nice farmer that gives them all that damned food!”

Victor emitted a gutteral cackle startling his trophy wife’s cat who was yet again demonstrating his feelings for Victor by peeing on his rug for the umpteenth time.

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