As Expected, Obama’s 2014 Budget Includes Chained CPI
Posted: April 5, 2013 Filed under: Barack Obama | Tags: Chained CPI, cutting Social Security, Grand Betrayal 55 Comments
Here we go, folks. The Associated Press (via Business Insider) reports that Obama’s New Budget Will Contain The Infamous ‘Chained CPI.’ The story is based on a anonymous leak from “an administration official.
The proposal attempts to strike a compromise with congressional Republicans on the Fiscal 2014 budget by combining the president’s demand for higher taxes with GOP insistence on reductions in entitlement programs.
The official, who spoke on a condition of anonymity to describe a budget that has yet to be released, said Obama would reduce the federal government deficit by $1.8 trillion over 10 years.
A key feature of the plan Obama is proposing for the federal budget year beginning Oct. 1 is a revised inflation adjustment called “chained CPI.” This new formula would effectively curb annual annual increases in a broad swath of government programs, but would have its biggest impact on Social Security.Obama’s budget proposal also calls for additional tax revenue, including a proposal to place limits on tax-preferred retirement accounts for wealthy taxpayers. Obama has also called for limits on tax deductions by the wealthy, a proposal that could generate about $580 billion in revenue over ten years.
The inflation adjustment would reduce federal spending over 10 years by about $130 billion, according to past White House estimates. Because it also affects how tax brackets are adjusted, it would also generate about $100 in higher taxes and affect even middle income taxpayers.
This is completely unacceptable. We should not have to rely on the stubbornness of right wing opposition to tax increases to save us from our supposedly Democratic President, but that’s the position we’re in right now. Obama has basically just put his 2011 “grand bargain” (already rejected by Boehner), put it down on paper and called it a budget.
Michael Lind at Salon writes that Obama is “making a historic mistake on Social Security.”
President Obama reportedly is unveiling a budget using the chained CPI inflation measure to cheat elderly Americans out of the benefits they were promised. In two previous posts I’ve explained the perversity of the current debate about Social Security. The tax-favored private components of America’s mixed private-public retirement system — programs like employer pensions, 401Ks and IRAs — are inefficient, volatile and subject to manipulation by overcompensated, fee-extracting money managers. In contrast, the Social Security program is simple and efficient, and has low overhead costs. And yet the bipartisan establishment, including many “progressive” Democrats as well as Republicans, wants to cut Social Security — the part that works — and expand tax-favored private savings, the inefficient, unstable and inequitable part.
While cutting Social Security makes no sense at all in terms of economics or public policy, it makes excellent sense in terms of the selfish class interests of the super-rich. They have extracted about half the gains from economic growth in the U.S. in the last half-century and recycle some of their profits to fund politicians, and lobbyists, as well as mercenary propagandists who pose as neutral think tank experts. Social Security’s contribution to the retirement income of the rich is negligible, while the top 20 percent receives around 80 percent of the income from tax-favored private retirement savings accounts like 401Ks. Naturally many of America’s oligarchs want the public discussion to be solely about cutting Social Security benefits for the bottom 80 percent, rather than 401Ks for the top 20 percent. To paraphrase Leona Helmsley, Social Security is for the little people. And if we cannot afford all of our present public-plus-private retirement system … well, as the saying in Tsarist Russia had it, let any shortage be shared among the peasants.
Elite discourse on this subject is radically at odds with public opinion. According to a February 2013 Pew poll, only 10 percent of Americans want to cut Social Security while 41 percent want to increase Social Security benefits. It’s time to change the public conversation about retirement security in America to reflect the beliefs and interests of the struggling many, not the fortunate few. We need to change the subject from cutting Social Security while subsidizing luxury retirements for the elite to cutting retirement subsidies for upper-income groups while expanding Social Security benefits for the majority of American retirees.
Please go read the whole thing and then we all need to bombard the White house with calls and e-mails.
peej
Carissa
ecocatwoman
mablue2
peggysue22
quixote
skydancingguestblogger
Mona (aka Wonk the Vote)
Sky Dancing 
Bernie Sanders is tweeting away against this, and so are lots of other people!
Its horrible, the worst is the inherent disparity with inflation – both the artificially low one we have now and the rise that will surely come.
It hasn’t happened yet. Tell your Reps and Senators that we’ll primary them if they vote for it.
There are 19 Dem Senate seats up in 2014 and 1 Special election seat In Mass in 2013.
I don’t think we need to worry about Ed Markey in either the house or the Senate. He will win the special election.
Or maybe the worst is the horrible confirmation that Bushco still rules.
you can say that again…….bush and balance.
This stealth attack on SS just makes me sick, or maybe I should say, it makes me sicker.
I don’t really understand this move by Obama. Boehner has said on several occasions that this deal is a non-starter because of the tax-revenue provisions, so what’s up with offering it again? Is this some convoluted strategy that only the inner-circle understands? It’s all so disgusting and disheartening and a total betrayal. We definitely need to bombard the White House and let them know this is BS.
BTW….Joe Cannon “Cannonfire” also has a good post up on this.
It makes no sense. Here’s the Cannonfire link.
That’s a good one too.
Yes, it does make sense. Obama has been talking about cuts to SocSec and Medicare since before he ever announced for the Dem nomination — way back in early May of 2007.
He WANTS desperately to be the president who breaks SocSec and Medicare.
It’s what his Tippy Top Zero Dot One Percenter donors and masters WANT HIM TO DO.l
He has been creating ever more awkward situation which he has hoped will “force” him to do this. And he did not let the Bush tax cuts expire which would have lessened the “deficit” as a reason to what he WANTS TO DO.
He lied to the voters; he bamboozled them.
He looks our way and brushes us off like something on the shoulder of his suit.
We do not matter, what we want does not matter, what we need does not matter.
Yes, we’re all aware of that. But when I said “It makes no sense” I was talking about the economy and economics, not Obama.
Apologies, BB — I should have figured that out.
No problem.
Fuck. Fuck. Fuck.
Sorry for the language. I sent an email to the White House. Thanks for the link.
Good! I’m going to start e-mailing them every fucking day.
Me2
Don’t apologize. People’s lives will be much, much worse with this callous change.
My message to POTUS:
Mr. President. What are you thinking proposing cuts to the Social Safety Net Programs? I voted for you because I believed YOU would protect the very programs you’re now willing to dissect. I have defended you in my Red State believing you would defend me, and people like me against a relentless assault from the right. I implore you, do not negotiate away the only hope of survival for many of us. We worked very hard contributing to these programs expecting their promise would be kept. KEEP THE PROMISE.
I also emailed the WH…………I am really pissed, I just got my retirement slashed, and now he wants to slash open my belly, and magnify poverty for me & other women and men, who are retired seniors. For Chris sake, can’t he do the right thing, like he said he was going to do? Why is he allowing the monsters to get away with this, and dropping to an all time low for our democratic party. He’s part of their machine, it’s been in the making for some time.
It’s happening, we have been sitting up and taking notice, and pondering his next move, nothing more to question, or understand………………..he is guilty of fucking things up for the working class poor, and the elderely…………….take a hard look at him the next time he speaks, and remember this day, game is on.
Bombardment is a very good idea. The defeat the Democrats to save social security ads practically write themselves! Idiots!!!
More On Obama and the Social Security Cuts – Lawyers, Guns & Money : Lawyers, Guns & Money
Chait supports it, doesn’t he? Thanks for the link!
From Kuttner:
Chiat in his poste linked to by Lawyers, Guns, and Money:
I think Chait likes it! He really likes it!
I’m not sure he was for it a long time ago, but he may have changed his mind. The post is very snarky.
New AARP poll: Seniors of both parties revile chained CPI (Joan Walsh)
That’s why “Superlative CPI” was recently floated as the new name for Chained CPI.
They really do think we’re that stupid.
Yeah, like “Clean Air Act” means polluters get to meet lower standards.
Like “PineRidge Acres” for a development — means they scalped the land before plopping box houses on it.
Like “Wilderness Sojourn” on a Winnebago down the freeway…… to another RV parking lot.
Like “Leave No Child Behind” means leave no millionaire behind.
We’re not that stupid. But a great many of us are tired, poor, cynical, and anxiously busy making even scarcer ends meet.
Rally the great American working class hordes! To the ‘net! To the fax machine! To the Post Office! (if you still have one in your neighborhood anymore).
My new slogan — “Austerity is for the Rich”
“My new slogan — “Austerity is for the Rich”
Love it
KEEP THE PROMISE
my new slogan…………No Deal RACK.
Obama is an asshole.
Word.
Word2
Fucking A Word!!!!!
Another in a seemingly unending panoply of plaintive cries, “Like me, I would really love it if you liked me” by Obama to Republicans who have a genetic electoral disposition to detest the air he breathes. When will he admit it ain’t gonna happen?
What is really galactically stupid strategically, is that Boehner and company will take the cuts and say, “If you think they are such a good idea, let’s do them, but forget revenue.” Strategically, the administration then has to explain themselves out of the box why their own proposed cuts aren’t good when agreed to by the Republican caucus. Just rip roaringly dumb over and above the policy implications.
If Boehner accepts this, he’ll lose his speakership. Maybe he could secretly accept it and call for a vote, but it won’t win in the House. I don’t believe the Senate will vote for it either. These people have to get reelected, Obama doesn’t.
I agree BB. Boehner has only broken the Hastert rule once and that happened during the Fiscal Cliff vote. He will never put the Obama budget up for a vote.
It’s time for anyone near SocSec and on it to get out there, on their feet, with their walkers and canes, and show the Dems what ire awaits them at the next election.
Obama does not care about our anger or concerns. He has a greased slide to true wealth awaiting him after he finishes his pathetic presidency.
The Dem Party? It’s hard to tell how far they have their heads of the One Percenters’ and Big Money’s arse.
Excuse me? I’m 65 and I don’t need a walker or a cane.
Oh, I wish I could say the same! I’m 67 and have major sciatica-type pain right now, ever since mid-January.
I almost included that especially those still in good health should be out there. But I liked the idea of having a weapon handy…defensive of course.
Remember the Dem rep having his car pounded by angry elderly? I’ve forgotten his name. From IL.
I have been acclimating myself, and logging in 10,000 steps a day…….I’m ready.
That would be Dan Rostenkowski, Jawbone. They were trying to overturn his car with him in it 🙂
Jon Walker at FDL:
I’ve always thought Obama preferred a Republican House, which makes it easier to explain his attacks on the great social safety net programs of the Dem Party.
The first comment says Obama probably feels it will be easier to give his One Percent and Big Money bosses their desired Trans-Pacific Partnership treaty if there is a Repub House.
Another has this: …”Obama is much more closely aligned with the “Republican” branch of the UniParty of the Oligarchy.”
More from Jon Walker:
Yup, very true. And I was driven off DailyKos for saying this back in January 2008. Now the Kossacks are up in arms…
Message sent. Thanks, BB.
Our local democrats sent me this invitation. I plan to go.
Thanks, Purplefin. I hope you’ll let us know what happens at that meeting.
My vote is to fire his ass…he hasn’t even submitted a budget most years and then when he finally gets around to it (late) it contains this POS…
Good and surprising piece by Beltway Bob. Maybe he can convince some of the Serious People.
Washington thinks entitlements are the problem. Maybe they’re the answer.
Young Ezra can, well, actually think and write coherently!
But, would he have his job if had done this earlier? Like during the Obama profit protection plan for private for-profit insurers debate?
I think he wouldn’t and whoever was running WonkBlog now would be a lot worse than Ezra.