Obama Allegedly to Cut back Social Security and Medicare in New Budget

 The Great Capitulator capitulates once again and...

Accepts GOP Austerity Cat Food War on the Unwealthy
MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT


It's back to the Simpson-Bowles cat food for the elderly and poor budget as far as the White House is concerned, according to The New York Times (NYT) on Friday:

President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say.

Once again, a Democratic president is conceding to the GOP "frame" of austerity being vital to the future of America, when it was the Republicans who ran up the deficit – after Clinton left Bush a balanced budget – with a profligate tax cut for the super rich, two wars, and things like a multi-billion gift to the pharmaceutical industry by prohibiting government negotiations on drug prices in Medicare Part D.

This amidst a historical moment when income redistribution and asset ownership disparities have reached record levels in the US. But Obama appears to have an aversion to discussing or rectifying a morally unacceptable imbalance in wealth in America.

In return, Obama will get some crumbs of revenue enhancement, but take at a look at some of his leaked proposed reductions:

Deficits would be reduced another $930 billion through 2023 as a result of spending cuts and other cost-saving changes to domestic programs, and $200 billion more due to reduced interest payments on the federal debt.

Mr. Obama’s proposed spending reductions include about $400 billion from health programs and $200 billion from other areas, including farm subsidies, federal employee retirement programs, the Postal Service and the unemployment compensation system.

Cutting domestic programs such as pensions and unemployment?

In its defense, the White House claims that it is proposing increased infrastructure investment (too little) and more taxes on the wealthy (not a whole lot more).

Meanwhile the elderly on a pittance of Social Security will have imposed on them the dreaded chained CPI, says the NYT:

Besides the tax increases that most Republicans continue to oppose, Mr. Obama’s budget will propose a new inflation formula that would have the effect of reducing cost-of-living payments for Social Security benefits, though with financial protections for low-income and very old beneficiaries, administration officials said. The idea, known as chained C.P.I., has infuriated some Democrats and advocacy groups to Mr. Obama’s left, and they have already mobilized in opposition.

Obama either continues to believe in the now inexcusably naïve notion of "bi-partisanship" or he is, as some will argue, at heart a fiscal corporate neo-liberal Wall Street true believer:

Together with the $2.5 trillion in deficit reductions that Mr. Obama and Congressional Republicans have agreed to since 2010, that would bring the total deficit reduction to more than $4.3 trillion over 10 years by the administration’s computations — just over the goal that both parties have set for stabilizing the growth of the national debt.

The NYT, which clearly received the leak about the Obama budget from White House sources, is reflecting an Oval Office viewpoint that the president is compromising in order to win over "moderate" Republican votes. Say what? Earth to planet Obama: have you learned nothing from continually starting negotiations with the Republicans letting them advance to 10 yards of their goal – and them allowing them to walk over into the end zone for a victory twist and shake?

If you want to know the low threshold of weakness Obama is negotiating from, read the viewpoint of his aides, as reported in the NYT:

Neither the president nor senior aides privately hold much hope that Republican leaders — Mr. Boehner and Senator Mitch McConnell of Kentucky, the Senate Republican leader — will compromise. So Mr. Obama’s strategy of reaching out to other Senate Republicans reflects a calculation that enough of them might cut a budget deal with the Democratic Senate majority. If that happens, the reasoning goes, a Senate-passed compromise would put pressure on the House to go along.

Uh, so the White House can't get even a basically Republican budget passed – with some crumbs of federal spending. They have to, as they see it, concede grovel and pray.

Bill Clinton said a long time back: "We [Democrats] have got to be strong. When we look weak in a time where people feel insecure, we lose. When people feel uncertain, they'd rather have somebody who's strong and wrong than somebody's who's weak and right."

Doesn't Obama run the danger, in his budget and many of his legislative proposals of appearing both weak and wrong?

Or is it that he actually believes in what he is proposing?

BuzzFlash at Truthout is not clairvoyant, so we can't say.

But history will judge him – and the seniors, unemployed, and poor who watch helplessly -- as President Obama thrusts a stake through the heart of the New Deal, while perpetuating a system of systemic oligarchy.

A Profound and Jarring Disconnect

The Writing on the Wall
By DAVE LINDORFF

Democracy: de-moc-ra-cy, government by the people; the common people of a community, as distinguished from any privileged class

According to the latest poll conducted by CBS "60 Minutes" and the magazine Vanity Fair, 61 percent of Americans want to raise taxes on the wealthy as the primary way to cut the budget. The same poll finds that the second most popular first choice for cutting the nation's budget deficit, at 20 percent, is cutting the military budget. That is, 81 percent of us--four out of five--would cut the deficit by taxing the rich and/or slashing military spending.

Only four percent of those polled favored cutting Medicare, the government-run program that provides health care for the elderly and disabled, and only three percent favored cutting Social Security.

President Obama meanwhile, appointed a so-called National Commission on Fiscal Responsibility and Reform (quickly dubbed the "Catfood Commission" by critics) to come up with proposals to cut the budget deficit. He named as co-chairs former Republican Senator from Wyoming Alan Simpson, a troglodyte sworn enemy of Social Security who publicly declared it to be "a milk cow with 310 million tits," and Erskine Bowles, a retired investment banker and former chief of staff to President Clinton who says he want to cut spending, not raise taxes, which, when it comes to Social Security, means lower benefits for retirees.

The writing on the wall appears to be that the White House, and Democrats and Republicans in Congress, are looking to raise the retirement age, currently 66, to 68 or 69, to reduce or at least limit the inflation adjustment in Social Security benefits, and perhaps also to increase the payroll tax on current workers. What they want to do is balance the budget by screwing with our retirement. What they do not want to do is raise taxes on the rich and on investment income, two steps which, if taken, could fully fund Social Security indefinitely into the future.

Already, the president and Congress have agreed to extend tax breaks for the rich, even though the vast majority of the American public wants the rich to pay higher taxes.

A second poll, this time by CNN, reports that 63 percent of Americans oppose the US War in Afghanistan and want it ended. Only 35 percent say they support the war (now in its ninth year).

Yet the president, who originally promised he would end US involvement in 2011, is now saying the US will "end combat operations" in that war-torn country in 2014--a turn of phrase that doesn't even mean the war would be ended that year (US combat operations allegedly ended in Iraq last summer, but some 50,000 American troops and many more private mercenaries are still there today and will be next year too, unless they are thrown out by the Iraqi government).

Even on the matter of cutting military spending, and with the US currently at war, a Financial Times/Harris poll found in November of last year that a third of Americans thought cutting the Pentagon budget was a good idea, and another third said it would not be a bad thing, with only just over a third saying it was a bad idea. Only 30 percent said that they were concerned that cutting military spending might pose a security risk. Instead of cutting though, the Obama administration with Congressional backing has continued to raise military spending to record levels not seen since World War II, when the US was in a state of all-out war and full national mobilization.

Last April, while Congress was considering the Dodd-Frank Financial Reform bill, a Pew poll found that 64 percent of Americans favored regulations placing a maximum limit on the permissible size of a bank. Only 27 percent opposed such a limit. Yet Congress passed, and the president signed into law, a bill that allows banks to grow even larger, without any constraint on size.

A Pew Charitable Trust poll released last March found that 52 percent of Americans favor setting limits on carbon emissions by vehicles and power plants, even if such limits meant higher energy prices. Only 35 percent opposed such limits on emissions. And yet Congress and President Obama have refused to offer up with any plan to limit CO2 emissions.

Finally, for decades, a majority of Americans have favored some kind of national healthcare system, whether a fully socialized plan such as that in the UK, or a so-called single-payer type plan where the government is the insurer of all citizens, as in Canada. In May 2009, as the battle over health care reform was heating up, a CNN poll found Americans favored a government health plan by 69-29%.

What polls showed Americans didn't want was a system of private insurers with a government mandate that everyone had to buy insurance or pay a penalty. Guess what kind of "health reform" Congress and the President gave them? Hint: It wasn't socialized medicine.

What's wrong with this picture?

On every key issue of public concern--protecting Social Security, reforming and universalizing health care, re-regulating the banking industry, ending America's endless wars, cutting the military budget, and taking serious steps to combat global climate change, the government in this supposed democracy has gone against the wishes of the majority of the public.

Clearly, whatever it is, this is no democracy we are living in today.

No wonder the American government is so busy figuring out new ways to spy on and monitor us citizens, to militarize police departments, to construct ever bigger prisons, to restrict access to information, and to control and intimidate the media! Instead of being of, by and for the public, it has become the public's enemy.

Revolution: rev-uh-loo-shun, an overthrow or repudiation and the thorough replacement of an established government or political system by the people governed.

The Odious Alan Simpson

He's Not Only Offensive; He's Ignorant!
Co-Chair of Obama's 'Fiscal Commission' Calls Social Security: 'Milk Cow with 310 Million Tits'
By DEAN BAKER

Former Wyoming Senator Alan Simpson, the co-chairman of President Obama's deficit commission, has sparked calls for his resignation after sending an offensive and sexist note to Ashley Carson, the executive director of the Older Women's League. While such calls are reasonable -- Simpson's comments were certainly more offensive than remarks that led to the resignation of other people from the Obama Administration -- the Senator's determined ignorance about the basic facts on Social Security is an even more important reason for him to leave his position.

I was also a recipient of one of Simpson's tirades. As was the case with the note he sent to Carson, Simpson attached a presentation prepared for the commission by Social Security's chief actuary. Simpson implied that this presentation had some especially eye-opening information that would lead Carson and me to give up our wrong-headed views on Social Security.

While I opened the presentation with great expectations, I quickly discovered there was nothing in the presentation that would not already be known to anyone familiar with the annual Social Security trustees' report. The presentation showed a program that is currently in solid financial shape, but somewhere in the next three decades will face a shortfall due to an upward redistribution of wage income, increasing life expectancy and slow growth in the size of the workforce. The projected shortfall is not larger than what the program has faced at prior points in its history, most notably in 1982 when the Greenspan Commission was established to restore the program's solvency.

It was disturbing to see that Simpson seemed surprised by what should have been old hat to anyone familiar with the policy debate on Social Security. After all, he had been a leading participant in these debates in his years in the Senate.

Simpson's public remarks also seem to show very little knowledge of the financial situation of the elderly or near elderly. He has repeatedly made references to retirees driving up to their gated communities in their Lexuses. While this description may apply to Simpson's friends, it applies to very few other retirees, the vast majority of whom rely on Social Security for the bulk of their income. Cutting the benefits of the small group of genuinely affluent elderly would make almost no difference in the finances of the program.

Furthermore, the baby-boom generation that is nearing retirement has seen most of its savings destroyed by the collapse of the housing bubble that both wiped out their housing equity and took a big chunk of the limited money they were able to put aside in their 401(k)s. Simpson shows no understanding of this fact as he prepares to cut benefits for near retirees.

He also doesn't seem to have a clue as to the type of work that most older people are doing. While it is possible for senators to continue in their jobs late in life, nearly half of older workers have jobs that are either physically demanding or require they work in difficult conditions. Simpson seems totally clueless on this point when he considers proposals to raise the retirement age.

The key facts on Social Security are not hard to understand. The shortfall is relatively minor and distant. Most retirees have little income other than their Social Security, and most workers would find it quite difficult to stay at their jobs in their late 60s or even 70. We might have hoped that Senator Simpson understood these facts at the time when he was appointed to the commission, but we should at least expect that he would learn them on the job.

His determined ignorance in the face of the facts is the most important reason why he is not qualified to serve on President Obama's commission. Someone who is co-chairman of such an important group should be able to critically evaluate information, not just insult and demean his critics.

Obama’s Cat Food Commission, Alan Greenspan, and the Dancing Grannies for Medicare

by James Ridgeway on August 9, 2010

President Obama’s Deficit Commission is all smoke and mirrors. Its members are making a big show of laboring over ”painful” choices and considering all options in their quest to bring down the deficit. But inside the Beltway everyone knows what’s going to happen: The commission will reduce the deficit on the backs of the old and the poor, through cuts to Social Security, Medicare, and Medicaid. Some opponents have taken to calling it the Cat Food Commission, since that’s what it’s victims will be forced to eat once the commission gets done slashing away at their modest entitlements.

In fact, the true intent of the Deficit Commission was evident before it was even formed. That intent was only driven home when Obama appointed as its co-chair Alan Simpson, who is well known for voicing, in the most colorful terms, what Paul Krugman calls the “zombie lie” that old-age entitlements will soon bankrupt the country.

So why the big show? Because neither Obama nor the Congress wants to get caught cutting Social Security and Medicare in public, certainly not before the November elections. (Medicaid will be cut as well, but politicians tend not to worry so much about poor people, since they don’t go to the polls in the numbers we geezers do.) So instead, they are foisting off this unpleasant task onto the Deficit Commission, showing what the lawyers call “due diligence,” sucking their thumbs and pretending to study how to cut the deficit. They’ve got $1 billion in walk-around money to pay for propaganda so the PR industry ought to be plenty happy. So too, should billionaire Pete Peterson, as he and his foundation lackeys push forward towards a victory in their longstanding attack on entitlements.

Quite frankly, if the Republican Right could get itself together and shove the Tea Party nuts back into their cave–as Reagan did with the crackpots hanging around him–they too could reap the benefits of the Cat Food Commission’s work. Ever since the New Deal, the Right has been kicking and screaming about Social Security. Things just got worse in the 1960s with Medicare and Medicaid. And now, thanks to our supposedly “socialist” president, they are within a few inches of cutting a nice hefty hunk out of the largest social programs this nation has ever known.

As one Capital Hill player recently wrote me: “Unfortunately, everyone in a position of power up here knows full-well the connection between Peterson, the commission and Simpson. They either don’t care or are too afraid to say anything because they’ll appear ‘soft on deficits.’ It’s no different than their Iraq war votes…they believe they’ll appear ‘weak’ if they don’t jump on the bandwagon. The Democrats, (with the exception of Nancy Pelosi and only a handful of others–including commission member Jan Schakowsky), have no intention of taking on Peterson’s crew. Congress may be a lost cause on this issue, if the voters don’t get pissed off about the Commission fast.”

Will enough voters get pissed off enough, soon enough to slow down the anti-entitlement juggernaut? It’s a long shot, at this point. There are signs of something like a small movement growing around the Cat Food Commission idea, and scattered protests (among them a demonstration dubbed the “Dancing Grannies for Medicare.”)

But it’s going to take a lot to waylay the likely course of future events: The Cat Food Commission will undoubtedly recommend, and a lame duck Congress will pass, legislation that looks fairly innocuous: trimming Social Security a bit, maybe by upping the age by a few years, and cutting a little from Medicare–none of it affecting anyone who is over 65 right now. That will enable the politicians now in office to look like they are protecting seniors and fending off any drastic cuts, while at the same time appearing “tough” on the deficit. But the legislation, in the usual Washington mode, will gradually widen as the years go by, so that by the time this bunch of pols are retired (on their fat pensions) and out of the fray, the new rules will be eating into entitlements in a big way.

The other side of this Faustian bargain would appear to be Congress passing some tax increases. ”In setting up his National Commission on Fiscal Responsibility and Reform,” William Greider recently wrote in The Nation, ”Barack Obama is again playing coy in public, but his intentions are widely understood among Washington insiders.” As Greider puts it, ”The president intends to offer Social Security as a sacrificial lamb to entice conservative deficit hawks into a grand bipartisan compromise in which Democrats agree to cut Social Security benefits for future retirees while Republicans accede to significant tax increases to reduce government red ink.”

It remains to be seen how “significant” those tax increases actually turn out to be. But even former Federal Reserve Chair Alan Greenspan seems to be on board with this general plan. Greenspan’s credentials include chairing the first major entitlement-cutting commission back in the 1980s, as well as promoting the Bush-era tax cuts that helped the deficit grow to its current proportions. He still says that reductions to Medicare benefits are necessary–but in a recent interview in the New York Times, Greenspan also says that he now wants to remove all the Bush tax cuts. Seeing as it comes from the champion of “let them eat cake” economics, this pronouncement must be seen as predictor of how conservatives could end up voting. In short, the old and the poor will have to eat cat food, but the rich might kick in a few crumbs as well.

Deficit Reduction Comm. member Alan Simpson argues for Cutting SS benefits

Meet the Man Who Perversely Argues for Cutting Social Security Benefits to "Take Care of the Lesser People in Society"
By Jane Hamsher

Each time the Catfood Commission -- aka Obama's Budget Deficit Reduction Commission -- holds its secret meetings, Alex Lawson of Social Security Works has been outside with his camera, shooting video of the closed front door as FDL runs a live stream on our front page. The Washington Post wrote it up recently.  As committee members go in and out of the room Alex asks them questions when he can and yesterday he had an exchange with Alan Simpson that was…well, extraordinary.

Simpson is apparently a graduate of the Bobby Etheridge school of charm. Alex Lawson was incredibly respectful and polite as the crankly Simpson berated, interrupted and cussed him. Simpson has been a long-time supporter of rolling back the New Deal, and when asked about cuts he would recommend to the President and Congress on CNBC, Simpson said  “We are going to stick to the big three,” meaning Social Security, Medicare and Medicaid.  His sentiments haven’t changed.

CJR’s Trudy Lieberman recently ran down Simpson’s history of delicate statements on the subject of Social Security.   He is equally decorous on camera with Alex, who clearly knows a great deal more about the subject than he does.  Simpson starts from the premise that the Treasury will default on the bonds issued to the Social Security trust fund, because all the best people apparently know that it’s better to default on America’s senior citizens and plunge them into poverty than it is to default on, say, the Chinese.

Despite Simpson’s assertions, raising the retirement age to 70 IS a benefit cut.  It would put an estimated 1.5 million  senior citizens into poverty. After two years of watching billions of dollars in taxpayer money being paid out to Wall Street CEOs in lavish bonuses while the White House breaks every promise they’ve made to rein them in, that takes a fat load of nerve.

The commission is also looking into cutting Medicare benefits, because the deal guaranteeing no-bid Medicare contracts to the pharmaceutical industry by both Republicans and Democrats can’t possibly be abrogated.  The committee claims it’s independent, but it’s not THAT independent.  So, old people, too bad for you.

Erskine Bowles has returned to run the same play he ran during the Clinton administration, when he negotiated the secret deal between Bill Clinton and Newt Gingrich to cut Social Security benefits.  Despite warnings from both John Boehner and John Conyers that the commission will report its recommendations to a lame duck Congress who could pass it before the end of the term.  Both Harry Reid and Nancy Pelosi have promised to bring the commission’s proposalsup for votes.

In the absence of any transparency coming from the committee about what transpires in its secret meetings, Simpson’s comments to Alex are the best insight we have into what is being discussed there.