Tag: Austerity

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.

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

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.

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.

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.

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”.

Economist Richard Wolff discusses how austerity is making economic problems worse and the cure for these economic woes.

As Washington lawmakers pushes new austerity measures, economist Richard Wolff calls for a radical restructuring of the U.S. economic and financial systems. We talk about the $85 billion budget cuts as part of the sequester, banks too big to fail, Congress’ failure to learn the lessons of the 2008 economic collapse, and his new book, “Democracy at Work: A Cure for Capitalism.” Wolff also gives Fox News host Bill O’Reilly a lesson in economics 101.

   AMY GOODMAN: Professor Wolff, before we end, I want to turn back to the crisis in Cyprus and relate it to what’s happening here. Bill O’Reilly of Fox News warned his audience last week that Cyprus and other European countries are facing economic hardships because they’re so-called “nanny states.”

       BILL O’REILLY: Greece, Italy, Spain, Portugal, Ireland, now Cyprus, all broke. And other European nations are close. Why? Because they’re nanny states, and there are not enough workers to support all the entitlements these progressive paradises are handing out.

   AMY GOODMAN: That’s Bill O’Reilly of Fox News. Richard?

   RICHARD WOLFF: You know, he gets away with saying things which no undergraduate in the United States with a responsible economic professor could ever get away with. If you want to refer to things as nanny states, then the place you go in Europe is not the southern tier-Portugal, Spain and Italy; the place you go are Germany and Scandinavia, because they provide more social services to their people than anybody else. And guess what: Not only are they not in trouble economically, they are the winners of the current situation. The unemployment rate in Germany is now below 5 percent. Ours is pushing between 7 and 8 percent. So, please, get your facts right, Mr. O’Reilly.

   The nanny state, you call it, the program of countries like Germany and Scandinavia, who tax their people heavily, by all means, but who provide them with social services that would be the envy of the United States-a national health program that takes care of you, whether you’re employed or not, and gives you proper healthcare. In France, for example, the law says when you go to work, you get five weeks’ paid vacation. That’s not an option; that’s the law. You get support when you’re a new parent for your child care and so forth. They provide services. And they are successful in Germany and Scandinavia, much more than we are in the United States and much more than those countries in the south.

   So they’re not broken, the south, because they’re nanny states, since the nanny states, par excellence, are doing better than everyone. The actual truth of Mr. O’Reilly is the opposite of what he says. The more you do nanny state, the better off you are during a crisis and to minimize the cost of the crisis. That’s what the European economic situation actually teaches. He’s just making it up as he goes along to conform to an ideological position that is harder and harder for folks like him to sustain, so he has to reach further and further into fantasy.

H/t Heather at Crooks and Liars

Capitalism efficient? We can do so much better

by Richard Wolff, The Guardian

For all its vaunted efficiency, capitalism has foisted wasteful inequality and environmental ruin on us. There is an alternative

What’s efficiency got to do with capitalism? The short answer is little or nothing. Economic and social collapses in Detroit, Cleveland and many other US cities did not happen because production was inefficient there. Efficiency problems did not cause the longer-term economic declines troubling the US and western Europe.

Capitalist corporations decided to relocate production: first, away from such cities, and now, away from those regions. It has done so to serve the priorities of their major shareholders and boards of directors. Higher profits, business growth, and market share drive those decisions. As I say, efficiency has little or nothing to do with it.

Many goods and services once made in the US and western Europe for those markets are now produced elsewhere and transported back to them. That wastes resources spent on the costly relocation and consequent return transportation. The pollution (of air, sea and soil) associated with vast transportation networks – and the eventual cleaning up of that pollution – only enlarges that waste.

Lately there have been some rumors about me that I feel need to addressed. Because I have more class than some people spreading nonsense about me and others, I am not going to name names or link to them, but some of you will know what I am talking about. First off, in the comments of my last diary it was rightly brought up that the President did issue a veto threats against anyone who wants to get rid of any part of the sequester.

This veto threat applied to anyone in both parties which also included the plan from Republicans that wanted to give federal agencies more leeway in how the sequester was implemented so as to spare the defense cuts instead of equal foreign and domestic cuts across the board. It’s not surprising that no one else put anything forward with that veto threat.

Obama Threatens Veto on Bid to Avoid Automatic Cuts as Supercommittee Fails

President Obama said today he will veto any efforts to get rid of the automatic spending cuts that will be triggered by the supercommittee’s failure to reach a bipartisan solution to deficit reduction.

“There will be no easy off-ramps on this one. We need to keep the pressure up to compromise, not turn off the pressure,” the president said this evening. “The only way these spending cuts will not take place is if Congress gets back to work and agrees on a balanced plan to reduce the deficit by at least $1.2 trillion.”

Only those that enable the real life terror federal employees and their families will soon feel deny that this is a debacle created by the Executive and the Legislative working together for austerity. The direct quotes up above can only be ignored by those with an agenda and not one for working people. Get real.  

Sequestration wasn’t going to happen according to Pres. Barack Obama, but it did. Mostly, because he was naive enough to think that the Republicans would cave because he dangled cuts to Social Security under there noses. Well, that didn’t work out so well. The Tea Party hard liners were adamant about no new taxes and House Speaker John Boehner (R-OH), eager to hold onto his gavel, stood his ground.

We now move to the next manufactured budget crisis on the agenda: the continuing resolution (CR) to keep the government lights on after March 27. If you think that is going to be smooth sailing then you aren’t paying attention. The fight over sequestration could very well lead to a government shutdown:

An aide to Speaker John Boehner (R-OH) said GOP leaders haven’t yet settled on an approach to funding the government. And House Republicans are divided enough that it’s unclear whether they could pass a stripped-down appropriations measure to begin with. Many Republicans would like to use the appropriations process to mitigate sequestration’s defense cuts, or eliminate them by cutting more deeply into domestic spending – a non-starter for Democrats. [..]

“We have had a law that’s in effect; it’s called sequestration,” (Senate Majority Leader Harry Reid (D-NV) said. “Those cuts will go forward. They’re all cuts. I think we need some revenue to take the pressure off everybody. The American people agree with me. And until there’s some agreement on revenue, I believe we should just go ahead with the sequester.”

In other words, Democrats won’t allow Republicans to use a continuing resolution to enshrine sequestration’s lower overall spending requirement by apportioning the cuts in a less indiscriminate way.

Pres. Obama thinks a government shut down can be avoided believing that the Republicans will do the “right thing” and agree to a CR that “adhere to the spending levels they agreed to during the debt limit fight in 2011“:

If House Republicans can’t pass a government funding bill that sets overall spending at levels agreed to in the Budget Control Act – funding that would automatically be reduced because of sequestration – then the government will shutdown and the pressure Republicans feel to cut a deal that both averts sequestration and keeps the government running will intensify. [..]

Thus, if Republicans try to rejigger the sequestration cuts such that they make the lower overall spending levels permanent, but rescind its indiscriminate cutting mechanism and thus remove the pressure on Congress to pass a balanced alternative, they’ll set off a government shutdown fight.

But if Republicans can pass a government funding bill that adheres to spending levels agreed to and set in 2011, then the government will stay open and the fight over sequestration will continue indefinitely.

However the fight over ongoing funding of the government shakes out, Obama said he hopes public pressure convinces Republicans to relent on revenues so that he and Congress can replace sequestration with an alternative deficit reduction plan.

First, the Republicans don’t care about public pressure Second, if Pres. Obama isn’t aware of that then he hasn’t been paying attention and his prediction that the government won’t shut down is as premature as the one about sequestration not happening.

“We agreed to a certain amount of money that was going to be spent each year, and certain funding levels for our military, our education system, and so forth,” Obama said. “If we stick to that deal, then I will be supportive of us sticking to that deal.”

But the implementation of sequestration, particularly its indiscriminate cuts to defense programs, calls into question whether House Republicans will be able to honor the government funding deal without relying on a significant number of Democratic votes. Republicans want to restore some funding to defense programs to mitigate sequestration’s impact on GOP priorities. And that could leave Boehner to choose between keeping his conference united – and thus passing a continuing resolution that the Senate and White House reject – or ignoring internal GOP politics and teaming up with Democrats to keep the government open.

The Republicans in the House have other ideas and have already started planning their end run around the cuts in sequestration they didn’t like by eliminating them in the CR. According to The Hill, they’ve already introduced a funding bill that will “cushion the Pentagon and other agencies from the blow of $85 billion in sequester spending cuts”

It would shift about $10.4 billion into the Pentagon’s operations and maintenance account by cutting other defense accounts, including a $3.6 billion reduction in personnel funds, $2.5 billion less in research and development, and $4.2 billion less in equipment procurement. [..]

In total, the bill includes $518 billion for defense, $2 billion more than President Obama requested this year but the same as in 2012. It assumes the 13 percent cut to non-exempt budget accounts called for by sequestration will occur.

The Republicans are trying to undo the cuts they don’t like while preserving the cuts that the Democrats don’t like and using the CR as an end run around the law.

The Democrats are still reviewing the proposal and have said that they would insist on the same “cushion” non-defense appropriations. There are two scenarios for how this “drama” will play out:

A fight ensues between the House and Senate over the cushions for the Republican’s pet cuts and the Democratic opposition without similar concessions leading to a government shutdown;

Harry Reid gets his orders from the White House, fearing the repercussions of a government shut down, and he puts the House bill up for a vote and it passes with minimum Democratic support.

I’m betting on the latter because Barack already said so.

Someone has finally found the argument that could finally put an end to the death penalty, it costs too much. In the age of austerity, the cost to the state of Maryland to litigate the appeal of inmates on death row is three times higher than the cost of life in prison without parole:

In its 2008 report, the (Maryland Commission on Capital Punishment) wrote that the average cost of prosecuting and imprisoning a Death Row inmate was $3 million, nearly three times higher than the cost of convicting and sentencing a murderer to life imprisonment. Of that $3 million, $1.7 million is spent in the courtroom and $1.3 million is spent in a Supermax prison, the commission wrote. [..]

The commission determined that the state spent $1.8 million dollars for every failed attempt to impose the death penalty, including $950,000 in prison costs and $850,000 in adjudication costs.

Maryland’s Gov. Martin O’Malley said since the death penalty is not a crime deterrent and the exorbitant cost, it is time to end the death penalty in his state.

On Friday, the Maryland state Senate once again began debating a bill to repeal capital punishment in the state. It needs 24 votes to pass and 26 senators have already said publicly that they support the repeal.

Rather than funnel all of their focus into moral and social arguments, the bill’s supporters have been making their point partly in economic terms. The cost of prosecuting a death row case in Maryland can be as much as three times what it costs for a case seeking a life sentence without parole.

On Sunday’s Up with Chris Hayes, Bryan Stevenson, founder & executive Director of Equal Justice Initiative, professor at New York University School of Law, addressed how the savings could benefit public safety. He and Up host Chris Hayes were joined by panelists Mattea Kramer, the National Priorities Project; David Sirota, contributor to Salon.com; and Roberto Lovato, writer for New American Media, contributor to The Nation.

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.

With $85 billion across-the-board spending cuts, known as “the sequestration,” set to take effect this Friday, a new investigation reveals how billionaire investors, such as Peter Peterson, have helped reshape the national debate on the economy, the debt and social spending. Between 2007 and 2011, Peterson personally contributed nearly $500 million to his Peter G. Peterson Foundation to push Congress to cut Social Security, Medicare and Medicaid – while providing tax breaks for corporations and the wealthy. Peterson’s main platform has been the Campaign to Fix the Debt. While the campaign is portrayed as a citizen-led effort, critics say the campaign is a front for business groups. The campaign has direct ties to GE, JPMorgan Chase, Morgan Stanley and Goldman Sachs. Peterson is the former chair and CEO of Lehman Brothers and co-founder of the private equity firm, The Blackstone Group. For more, we speak to John Nichols of The Nation and Lisa Graves of the Center for Media and Democracy.

Sequestration Is Austerity, but Not Enough for Simpson and Bowles

by John Nichols, The Nation

Sequestration?

Cue the return of Alan Simpson and Erskine Bowles, frontmen for American austerity. [..]

The former Republican senator and defeated Democratic senate candidate who praises Paul Ryan’s budget don’t particularly like the death-by-slow-cuts of sequestration. They prefer a full frontal assault on the most vulnerable Americans and a redistribution of the wealth upward.

As President Obama has noted, Washington has already reduced the deficit by $2.5 trillion.

But the co-chairs of the failed National Commission on Fiscal Responsibility and Reform now want another $2.4 trillion.

To wit, in a “rehashed” plan to “Fix the Debt,” Simpson and Bowles are busy promoting schemes to “modernize…entitlement programs to account for” an aging population. That’s code for schemes to delay the point at which the hardest working Americans can get access to Social Security and Medicare.

Simpson and Bowles are arguing specifically for the adoption of “chained CPI.” That’s the assault on Social Security cost-of-living increases that Congressman Keith Ellison, D-Minnesota, correctly identifies as “a benefit cut.”

Remember who appointed these two charlatans to head the “National Commission on Fiscal Responsibility and Reform” when Congress refused to create it, Pres. Obama. Remember who embraced their recommendations when the committee failed to come to an agreement, Pres. Obama.

Remember who was privately financing the commission, Peter G. Peterson.

Sperling: Obama Wanted Sequester to Force Democrats to Accept Entitlement Cuts

by Jon Walker, FDL Action

The way Obama has handled basically every manufactured crisis from the debt ceiling, to the Bush tax cuts expiration, to the sequester has been about trying to force both Democrats and Republicans to embrace his version of a “grand bargain.” While it is clear this has been the driving force behind Obama’s decisions, if you pay close attention to his actions is is rare than an administration official will directly admit this. This is actually what I think it most interesting about the recently leaked email exchange between Bob Woodward and Gene Sperling up on Politico. Sperling wrote:

   But I do truly believe you should rethink your comment about saying saying that Potus asking for revenues is moving the goal post. I know you may not believe this, but as a friend, I think you will regret staking out that claim. The idea that the sequester was to force both sides to go back to try at a big or grand bargain with a mix of entitlements and revenues (even if there were serious disagreements on composition) was part of the DNA of the thing from the start. It was an accepted part of the understanding – from the start. Really. It was assumed by the Rs on the Supercommittee that came right after: it was assumed in the November-December 2012 negotiations. There may have been big disagreements over rates and ratios – but that it was supposed to be replaced by entitlements and revenues of some form is not controversial. (Indeed, the discretionary savings amount from the Boehner-Obama negotiations were locked in in BCA: the sequester was just designed to force all back to table on entitlements and revenues.)

Pres. Obama has close ties to Mr. Peterson, both want cuts to Social Security and Medicare. That the president is calling for tax increases is a cover so he can get away with unpopular cuts. If he can get a bipartisan agreement that cuts entitlements and raises taxes then everyone, and no one, is to blame. What John Walker said, “That is why even now Obama isn’t calling for the sequester to be simply repealed or delayed. Obama still wants to use this manufactured crisis to force congressional Democrats to betray their base by adopting Social Security cuts and get Republicans to accept revenue increases.”

This is a fine mess you’ve got us into, Barack.