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Wednesday, March 13, 2013

Putting Social Security and the Economy in Chains

Length of chain
It's one of those bad news/good news sorts of things. The bad news is that President Obama is definitely looking at some sort of benefit cut in entitlement spending. The good news is that congressional Democrats most definitely do not agree -- and if they say it doesn't happen, it doesn't happen. After President Obama met with Republicans to iron out some sort of a deal on deficit reduction, he met with Senate Democrats to pitch ideas to them. It was not a sale.

The Hill:

...Though they are his most powerful congressional allies, there is tension in that relationship too given fears of liberal Democrats that Obama will make too many concessions with House and Senate Republicans on entitlement cuts, all in the hope of reaching a deficit deal.

Obama stood firm Tuesday when pressed to back away from benefit cuts during the meeting with the Senate Democratic Conference, according to lawmakers who attended.

[...]

[B]ehind closed doors, liberals in the Senate caucus raised concerns about Obama’s readiness to consider cuts to Social Security benefits and his support for a deficit-reduction package evenly split between spending cuts and tax increases.


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I suppose the President and Democrats could be playing good cop/bad cop with Republicans, but Obama's been so willing -- scratch that; so eager -- to compromise with Republicans in the past that he's opened negotiations with them by meeting them halfway. I think he is the overly-helpful good cop. I don't think there's any playacting here at all. This was what lost us the public option in healthcare reform. Had the president started from a very liberal position -- say, singlepayer healthcare -- we might've negotiated down to a public option.

But healthcare reform was something we needed to get done. So Democrats were willing to take a bad deal and perhaps revisit it down the road. But deficit reduction? Yeah, Republicans want everyone to freak out over the deficit, but there's actually no reason anyone should. Deficits will rise during economic downturns because revenues fall. It's been said that the best social program is a job. Along those same lines, the best deficit reduction program is high employment in a good economy. Make the economy and employment your top priority and most of your deficit reduction work will be done for you. Increased employment, combined with better pay, increases revenues and reduces deficits. Prosperity is by far the best and most painless way to address deficits. And you don't get prosperity by slashing entitlement spending, because that's a direct attack on consumer demand. You can't get rich by saving money, you get rich by making money. Saving money is just making the most of the status quo.

But the White House seems bamboozled by Republican deficit hysteria. The Hill reports, "Obama did not back down from a proposal to switch to the chained consumer price index formula for calculating Social Security benefits." Chained CPI is a complex issue, so I'll give you a link explaining it and use the space here to say it's just your typical Republican attack on consumer demand. Suffice it to say it means a reduction in benefits over time.

Social Security has a budget separate from the rest of the federal budget. And that budget is solvent and deficit free. It's not responsible for deficit spending, so why should it be cut?

Here's where you get into the very special kind of robbery that is Republicanism: it should be cut to save fabulously rich people from paying more in taxes. Since Social Security does not add to the deficit and is separate from the federal budget, cutting benefits to reduce benefits is just a raid on the trust fund to plug budget holes. Republicans like to say that taxation is theft. That's ridiculous. If you want an accurate metaphor, taxation is rent. Don't like the rent in this building? Use the power of the free market and move to the Somalia Arms. No one's actually forcing you to stay here and keep paying all this rent. It's a free country. You can leave.

But raiding Social Security to keep taxes low for billionaires -- now that's theft.

After all, you paid into Social Security. It's your money we're talking about here. And it's all very real money, because Social Security is barred by law from paying out benefits at a deficit. It's real money that was collected for one purpose and one purpose only, suddenly being taken and applied to an entirely different purpose altogether. Imagine your banker telling you, "We took some of the money from your retirement account and used it to patch the roof on the bank. Sorry, you won't be getting that money back." What's being proposed with chained CPI is not a lot different. They want to pay you less of your own money, so they can take that money and apply it somewhere else. That's Wall Street's hand in your pocket and that's a Rolex on the wrist. They don't actually need the money.

"We knew some would hold [the view that entitlement spending should be off the table]," a White House official said of the meeting. "It's exactly what we anticipated. But we need to all come together and find out what we can and can't live with. That's the way we compromise. We don't have to give up on our values to reach a compromise. I think that's the message the president sent today."

But unless the president secretly agreed to abandon chained CPI and pretend it's still on the table, "giving up on our values" is exactly what the president is asking Democrats to do. Whether it's the President's plan or not, Democrats should commit to being the baddest goddam bad cops this White House and Republicans have ever seen. Give not an inch. Not a millimeter. Not a dime of your money should be spent on keeping billionaires' taxes down. Not a penny.

The goal should be to increase employment and grow the economy, not shield already spoiled billionaires from taxes.

-Wisco

[photo via BotheredByBees]


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