Tag: Social Security

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”.

This won’t be FP material everywhere, but it’s the truth. That is, unless one just hasn’t paid attention to the events and Congressional deals facilitated by this administration in response to said events that led up to the sequester. If one did pay attention, this conclusion is undeniable. The sequester was basically an invention of Gene Sperling and Jack Lew.

In case we all need a refresher, Gene Sperling was and still is the Director of the National Economic Council under President Barack Obama. In case the denial is too thick with regard to Jack Lew, Jack Lew was head of Obama’s Office of Management and Budget when the first grand betrayal was written only to be fall apart by John Boehner’s doing in 2011. For that, and his time on Wall St helping Citigroup as OCC crash our economy while denying that deregulation was a problem, he is insultingly being rewarded with a post as our next Treasury Secretary.

These are the people that were hired by and work in the Obama administration that wrote the damn Sequester! It’s pretty hard to deny, but some will try.

This was during the debt ceiling debacle many of us warned about but were ignored in favor of 11th dimensional chess. In reality, this is a vile violent rigged chess game that makes seniors starve to death through lack of meals on wheels. This form of deficit terrorism also threatens many of my friends and their relatives through layoffs and furloughs while slowing all essential government operations down.

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.

Or as Shakespeare’s Juliet said, “what’s in a name? that which we call a rose; By any other name would smell as sweet.” Not quite.

In this case calling chained CPI, “superlative CPI to make it more palatable to the voters and politicians who oppose it as a cut to future Social Security benefit, does not make it any less noxious or toxic:

Click image to view it in full size

Spending savings from superlative CPI with protections for vulnerable     $130 B

As Pres. Obama’s idol, Pres. Lincoln said, “You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.”

No, Barack, we will not be fooled by you.

Up Date: 3/3/13 23:18 AM EST: Post and learn. It seems that there is a “superlative CPI”, from letgetitdone in a comment at Corrente:

Hi TMC, There is a “superlativeCPI ,” but it’s not “the chained CPI” which is really “the Catfood CPI.” An actual superlative CPI, would cost adjust for the higher proportion of seniors’ household budget they must spend on rapidly increasing health care costs. It would also adjust for living area. so that seniors who live in high cost areas, can remain there if they choose, rather than moving to lower cost areas where their meagre SS pensions don’t go very far. In the real world, living costs in New York City are 2 1/2 times more than living costs in say, rural Kansas or the UP of Michigan. SS payments should be adjusted for these important regional differences.

Up Date: 3/6/13 12:39 AM EST A cut is a cut. I want to thank Hugh at Corrente for this explanation.

Then there is the Chained CPI which is a modification of the CPI-U. It is being pushed by the anti-old, austerity-minded as a replacement for the particular version of the CPI-W I just described above which already tends to understate inflationary effects on Social Security recipients. And there is the annoying Administration reference to it as the superlative CPI. Again context is important. The CPI survey collects information on prices. These are first averaged individually by geographic area. This is called “lower-level aggregation”. The example which they use is the price of one item (apples) in one locality (Chicago). The BLS then does what it calls “higher-level aggregation” (note the use of the comparative): the price of apples regionally and nationally, the price of food nationally, the price of all items nationally, etc. The Chained CPI involves another level of analysis and what must follow the comparative but the superlative? (..)

http://www.bls.gov/cpi/cpisupq…

The example used is that the CPI-U and the CPI-W have prices for pork and beef. What the Chained CPI seeks to measure is, in the event of a price increase in pork, the effect of consumers switching to beef. The BLS example is, of course, innocuous. The one some of us are more concerned about is seniors being forced to choose between beef and cat food. Substitution basically reduces the effects of inflation. Calculating a CPI based on it will inherently be lower then others (CPI-U and CPI-W) which do not. What it ignores, some would say deliberately, is quality of life. (..)

http://www.bls.gov/cpi/cpieart…

What is important to understand is that the various schemes to cut the size of the Social Security COLA, including the one currently in place are cumulative. You have no doubt heard of the miracle of compound interest. Well, what these schemes amount to is negative compound interest being charged against our seniors. What is always left off the table is the question of what constitutes a living retirement, perhaps because it would lead to the related discussion of what constitutes a living wage. Instead we get a numbers game, divorced from the very social issue the number is supposed to address.

The “comedy team” of former Sen. Alan Simpson (R-Wy) and businessman Erskine Bowles trotted out their latest version of their unauthorized report from the “Cat Food Commission” that they co-chaired for President Barack Obama. Not surprisingly, the dynamic duo of austerity and cuts to the social safety net go even further with the 2.0 version of their solution for ending the mythical budget crisis calling for even greater cuts and less revenue all on the backs of those who have the least to contribute:

The corporate austerians released their ‘new’ Bowles-Simpson recommendations today (pdf). They claim that they are building upon their original plan, not replacing it. They framed their recommendations as the last two steps in a four step process. For Social Security followers, Step Three includes the chained CPI. And Step Four includes all of the previous cuts to Social Security which they recommended in their first plan.  Raising the retirement age starting in 2022 slowly to 69, cutting benefits through re-indexing and flattening  all future benefits for our recipients in 2050. [..]

The corporate austerians go for installing the chained cpi first. Why? It could be that they still think that most Americans do not realize that the chained cpi is a cut which keeps on cutting [..]

The language is a vague euphemism for cuts; code words to their rich buddies that the uploading of wealth will not be threatened with significant new taxes. No pesky new scrap-the-FICA cap income taxes which might be used to pay for under-funded social insurance programs.

Meanwhile, President Obama, seemingly ignoring his two side show buddies, called for tax reforms that would increase revenue and a more balanced approach to the looming sequestration that would impose draconian cuts to non-defense spending programs. Taking lessons from Bill Maher, the Speaker of the House, Rep. John Boehner (R-OH), is having none of that and has proposed “new rule“:

“The sequester will be in effect until there are cuts and reforms that put us on a path to balance the budget in the next 10 years.”

At Maddow Blog, Steve Benen points out that Mr. Boehner may not have thought this “new rule” through and it could pose some problems in his caucus:

One of the details that often goes overlooked is that the House Republican budget plan from the last Congress — the one that included all the spending cuts, entitlement reforms, and tax breaks the GOP are desperate to have — didn’t bring the federal budget into balance until 2040. That’s not a typo — under the House Republican plan, written by Paul Ryan, the United States would run deficits every year for nearly three decades, and then might reach a balanced budget 27 years from now if optimistic projections are met.

And that plan included spending cuts so severe, GOP candidates were afraid to talk about them out loud in public.

This year, however, thanks to a new “rule” embraced by Boehner and his cohorts, the new House Republican plan intends to balance the budget by 2023, instead of 2040. Why does that matter? Because trying to eliminate the entirety of the deficit in one decade instead of three necessarily means ridiculously drastic cuts.

A plan from the House Progressive Caucus that presented the unique idea that creating jobs would bring down the already shrinking deficit. But, as Greg Sargent of the Washington Post‘s “Plum Line“, notes it stands little chance of even being considered in the Republican held House:

Needless to say, this plan – the creation of the Congressional Progressive Caucus – has no chance whatsoever of passing Congress. Which is exactly the point: No plan that prioritizes job creation as the best means of reducing the deficit; no plan that cuts defense while determinedly avoiding any cuts that would hurt the poor and elderly; no plan that includes equivalent concessions by both sides – could ever have a prayer in today’s Washington. It’s yet another indication of how out of whack Washington’s priorities are.

Greg sums up the problem of the GOP’s approach in a nutshell:

So, Boehner says House Republicans are not only willing to let the sequester hit, but that the only acceptable replacement for it will be a plan that wipes away the deficit in 10 years – all without revenues. [..]

There’s simply no chance that House Republicans will produce such a budget by March 1st, which is the deadline for the sequester. If Boehner means any of this, he’s confirming that we’re getting the sequester, and it will remain in effect until it is replaced by a plan that is simply never, ever going to happen. Wiping out the deficit in 10 years with no new revenues would be at least as bad as the Ryan plan – probably worse – yet even that plan was loaded up with unspecified cuts and other big question marks. Republicans are never going to propose specific cuts that balance the budget in 10 years with no new revenues – ever. Boehner has, in effect, just taken ownership of the sequester.

No, Mr. Boehner has not thought this “boner” through.  

What Atrios said: Republicans Don’t Care About Cutting Social Security

The big flaw in the premise of the grand bargain is that Obama is asking them to give away their precious by increasing taxes on the rich in exchange for something they don’t care much about. Cutting taxes for rich people is their whole purpose. Cutting Social Security? Well, if they can use Social Security cuts to cut taxes for rich people, sure. But cutting Social Security in order to increase taxes on rich people? Really not interested.

401Ks are a disaster

We need an across the board increase in Social Security retirement benefits of 20% or more. We need it to happen right now, even if that means raising taxes on high incomes or removing the salary cap in Social Security taxes.

Over the past few decades, employees fortunate enough to have employer-based retirement benefits have been shifted from defined benefit plans to defined contribution plans. We are now seeing the results of that grand experiment, and they are frightening. Recent and near-retirees, the first major cohort of the 401(k) era, do not have nearly enough in retirement savings to even come close to maintaining their current lifestyles.

Frankly, that’s an optimistic way of putting it. Let me be alarmist for a moment, because the fact is the numbers are truly alarming. We should be worried that large numbers of people nearing retirement will be unable to keep their homes or continue to pay

Economics and law professor at the University of Missouri, Kansas City, William K. Black joined Paul Jay, senior editor at The Real News Network to discuss President Barack Obama’s State of the Union address and his economic proposals.

President Barack Obama told Democratic delegates and congressional members meeting at the annual House Democratic retreat at Lansdowne Resort in Virginia that the he wants a “big budget deal”

President Barack Obama said he wants to reach a “big deal” on the budget that will cut the nation’s deficit without slashing spending on education and research that is needed to ensure future growth.

Obama said negotiations with congressional Republicans over avoiding the $1.2 trillion in automatic, across-the-board spending reductions set to begin March 1 shouldn’t push aside the effort for a broader plan to cut government debt.

While the president stood firm against “government by crisis” and the need for more revenue in any future deficit reduction deal, and much like the Republicans, who keep saying that they will close loop holes in the tax code but not which ones, there have been few details in how that deal would be accomplished. Nobel Prize winning economist points out that any reduction in government spending at this time would “destroys jobs and causes the economy to shrink”

This really isn’t a debatable proposition at this point. The contractionary effects of fiscal austerity have been demonstrated by study after study and overwhelmingly confirmed by recent experience – for example, by the severe and continuing slump in Ireland, which was for a while touted as a shining example of responsible policy, or by the way the Cameron government’s turn to austerity derailed recovery in Britain. [..]

But aren’t we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there’s a long-term fiscal problem, but it’s not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders.

(my emphasis)

Prof. Krugman discussed with MSNBC’s The Last Word host, Lawrence O’Donnell the consequences of such a deal at this time would mean and what the government should be doing to restart the economy.

The New Deal, Social Security, The Great Society, Medicare, Medicaid – concern for the welfare of “the little guy.” These are the marquee items which have defined the modern Democratic Party to its constituency.  These sorts of programs have been the sweet nectar in the plant which has allowed liberals and lefties to excuse the Democrats flings with the Military Industrial Complex, foreign dictators and bankster thugs along with the usual graft, corruption and peccadilloes.

The Democrats have, in modern times, always looked after society’s island of misfit citizens and the oppressed, cast off from the society and economy.  This is what allowed lots of principled people to pull the levers for folks that were committing war crimes and conducting illegal wars of aggression for resources and business interests. It is what allowed principled anti-war legislators to coalesce in a party which did some pretty awful things. The Democrats were going to watch out for the interests of the little guy whether he was a hero in one of their wars or not.  

An article entitled, “Defining the modern Democrat,” lays out the basis of the identity of the Democratic Pary:

The modern Democratic Party was born, just over a century ago, when another young orator from the Midwest-William Jennings Bryan-rocked the national convention in Chicago in 1896.  Because of its stirring climax, Bryan’s address is widely known as the “Cross of Gold” speech and, in most histories, is accompanied by an arcane explanation about the gold standard and 19th-century monetary policy.

Unfortunately, the focus on gold obscures Bryan’s real import. His candidacy redefined the Democratic Party as the voice of the common man. It ultimately led to Woodrow Wilson’s election and the formation of Franklin Roosevelt’s New Deal coalition, which dominated American politics for most of the 20th century. …

Bryan and his Democrats promoted a wide, rich menu of reforms – a graduated income tax, the Federal Reserve, women’s suffrage, direct election of U.S. senators – that became law in the Progressive Era.

The Great Commoner, as Bryan was known, was “the first leader of a major party to argue for permanently expanding the power of the federal government to serve the welfare of ordinary Americans.

The ambitions of William Jennings Bryan were carried out by other great Democrats and enacted with the enthusiastic support of Americans.  They are the bedrock of our social contract and a legacy of the 20th century that most Americans would like to keep vital and secure.

Last night the House of Representatives voted to make permanent the Bush/Obama tax cuts on all but the top 1% of tax payers and increasing taxes on on 77.1 percent of U.S. households, mostly because of the expiration of a payroll tax cut. With the bill set to be signed by Pres. Barack Obama, Congress and the White House move to the next manufactured crisis that this bill set up, the draconian sequester cuts to defense and non-defense spending and the debt ceiling, also a manufactured “crisis.” The bill did hold off those draconian cuts for two months, just in time for spending to hit the debt ceiling.

Pres. Obama made it clear in his address after the passage of the “Fiscal Cliff” bill, that he would not allow the debt ceiling to be used as a bargaining chip in negotiations over spending.

“I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed. We can’t not pay bills that we’ve already incurred.”

“If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic – far worse than the impact of a fiscal cliff.”

This bill was not the best deal as this article on the behind the scenes Senate dealings by Ryan Grym at Huffington Post tells it:

The White House sent Reid a list of suggested concessions as his staff debated what to send back to McConnell. Reid looked over the concessions the administration wanted to offer, crumpled up the paper and tossed it into his fireplace. The gesture was first reported by Politico and confirmed to HuffPost by sources with knowledge of it, who noted that Reid frequently keeps his fire going and is fond of feeding a variety of proposals to it.

Reid’s staff then called McConnell’s office with a simple message: Our last offer stands. There will be no further concessions. McConnell took to the Senate floor, complaining that he had no “dance partner” in Reid, and called Vice President Joe Biden, a man he assumed would be more willing to give. McConnell was right.

Perhaps the most important concession he wrangled from the administration, which Reid had been unwilling to make, was a two-month extension of the sequester, automatic cuts to defense spending and domestic programs that were supposed to be triggered Jan. 1. Reid wanted much more, worried that the two-month period will simply set up another colossal showdown that will also rope in the debt ceiling and funding for the government. “The deal itself is OK, but sets up Democrats for [a] worse fight and strengthens Republicans’ hand for what they really want: cuts,” said a Democratic source close to Reid. “Biden gave away the store on timeline. Two months and we’re back at this and in worse shape.”

President Barack Obama has vowed not to negotiate over the debt ceiling, but Democrats in the Senate are worried that they’ve now lost their leverage. “Everyone knew taxes would be raised on high earners,” said the Democratic source. “So with that out of the way, what do we bargain with?”

All they had to do was let the tax cuts end and pass new tax bill that included extension of unemployment benefits, ended unconstitutional the debt ceiling nonsense and added some stimulus to really create jobs, since we all know that tax cuts don’t. But no, Pres. Obama had to have this done and kept backing away from his so-called “line in the sand.”

If anyone believes at this point that Obama stand up to the threats of a government shut down by Republicans refusing to raise the debt ceiling without serious concessions on Medicare and Social Security, consider these three reasons to doubt from Jon Walker at FDL Action

1) Failure to stick to previous lines in the sand – In past negotiations Obama has failed to stick to his previous lines in the sand. Obama did not stick to his demand that the Bush tax cuts end for income over $250,000. Similarly despite saying he would not play games with the debt ceiling, Obama seemed to treat it as just another bargain chip when trying to get a deal with John Boehner.

2) Dismissing unilateral action – The Obama administration has dismissed unilateral action to address the debt ceiling. Doing something like invoking the 14th amendment would probably be the easiest way to defuse the fight, but the administration has declared that “not an option.” Even if the Obama team didn’t think it was a legally viable solution by completely removing the threat it has weakened its bargaining position.

3) Allowing the creation of a new super cliff in two months – When WP Joe Biden took over the negotiations from Sen. Harry Reid the major concession he made was to have only a two month delay of the sequestration cuts instead of a one year delay.

Meanwhile the “irrational exuberance” of Wall St’s feral children over the tax deal abounds with the markets closing on a high. Let’s see what happens in two months when we sit on the edge of another cliff.

Once we realize there is no fiscal cliff and the whole premise is a myth, you think about why it was created. It was created so we can mop up after the 1% which owns all three branches of government including the President. Obama didn’t add a raise in the debt ceiling to the Obama Bush tax cut deal he made in 2010 which created this political mess we are in right now.

Yet the poor and middle class are supposed to “stop whining and complaining” and just mop it up as if it’s one of the menial 60% of low wage jobs created that were part of this “recovery” where 93% of the income it went to the top 1%? I don’t think that’s fair. He needs to ask his Wall St buddies in his Treasury Department to share sacrifice. We have sacrificed enough in the name of the fantasy evil deficits from the land of Mordor causing fantasy default. Think about this when Nancy Pelosi was lying to you about this sellout ultimately helping the middle class last night.

From blatant robbery to money laundering, here are the biggest scandals of 2012 banking history.

#9. Middle-Class Wealth declines by 35 percent

On July 18, 2012, the U.S. Bureau of the Census made it official: The middle-class is getting poorer. The median family — that family exactly at the mid-point of the wealth ladder  — saw its net worth collapse. (Net worth is all assets minus all liabilities.) In 2005, the median family’s wealth was valued at $102,844 (in inflation adjusted dollars.)  By 2010, the latest Census figures showed a drop of 35 percent to $66,740.

And we’re supposed to celebrate this?