Gene Sperling: “A mix of entitlements and revenues was part of the DNA” of the Sequester “from the start.”Posted: February 28, 2013 | |
From Gene Sperling to Bob Woodward on Feb. 22, 2013
I apologize for raising my voice in our conversation today. My bad. I do understand your problems with a couple of our statements in the fall — but feel on the other hand that you focus on a few specific trees that gives a very wrong perception of the forest. But perhaps we will just not see eye to eye here.
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 barain 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.)
I agree there are more than one side to our first disagreement, but again think this latter issue is diffferent. Not out to argue and argue on this latter point. Just my sincere advice. Your call obviously.
My apologies again for raising my voice on the call with you. Feel bad about that and truly apologize.
Really? Does anyone recall President Obama saying that at the time the sequester was proposed and voted on in 2011? Did President Obama discuss these plans for entitlement cuts during his campaign for re-election? I’ve always suspected he did plan cuts in Social Security, Medicare, but when did he publicly state this? I’ve done a somewhat cursory search, but I can’t find anything.
There is no mention of these agreed-upon cuts in the Wikipedia entry on the Budget Control Act of 2011. There no mention of “entitlement” cuts in this extensive article at The Bipartisan Policy Center. This analysis (pdf) notes that the Supercommittee was authorized to cut Social Security:
The “Super Committee” deficit reduction plan: BCA also creates a new, special joint committee of Congress charged with finding at least $1.2 trillion in deficit reduction to avoid any potential sequestration. This “Super Committee” can cut spending (including Social Security and Medicare), raise revenue, or propose a combination of both. If the committee cannot agree on a plan, or Congress fails to approve it, automatic cuts of $1.2 trillion will be triggered through sequestration. To assist the Super Committee with its task, Congress also provided for an accelerated review of the Super Committee recommendations, provided that the Super Committee followed specific timelines, as outlined in the text.
But I think it was generally assumed that the Super Committee would not be able to agree on anything, and if they did that the Senate at least would not vote for Social Security cuts.
So now the truth has come out. Certainly no one from the White House has come rushing out to deny that cuts in Social Security, Medicare, and Medicaid are what is supposed to balance any new revenue. A few other bloggers have written about this.
Digby is always alert for any mentions of Obama’s seeming obsession with cutting Social Security, and she didn’t miss this one.
I don’t know that anyone’s ever admitted that in public before or that the president was completely, shall we say, honest when he ran for his second term about that specific definition of “a balanced approach”. I haven’t heard anyone say publicly that the sequester “deal” as far as the White House was concerned was to cut “entitlements” in exchange for new revenues. I wonder how many members of congress were aware of this “deal” when they voted for the sequester? The public certainly wasn’t.
I wish I could understand why it is so important to Barack Obama to cut these vital programs before he leaves office. It seems to be his obsession. But there you have it. It’s not just in the DNA of the sequester, it seems to be in the DNA of this White House.
In this sense, it seems that Sperling and Woodward–and by extension Obama–do “see eye to eye.”
At FDL, John Walker gets right to the point in his headline: Sperling: Obama Wanted Sequester to Force Democrats to Accept Entitlement Cuts.
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…..
Obama wants to cut Social Security and Medicare benefits. Obama also wants to raise taxes, but he only wants to do these unpopular things if he can get bipartisan cover to destroy basic democratic accountability. If everyone is to blame than no one is to blame.
What has sometimes been viewed as incompetence on the part of Obama during negotiations is actually Obama trying to weaken Democrats’ hand to “force” them to accept entitlement cuts while being able to blame it on the mean Republicans.
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.
Finally, thanks to JJ for sending me the link to this piece by Robert Kuttner at The American Prospect: Dear White House, You’ll Regret This.
[Gene Sperling’s] e-mail is pure confirmation that Obama’s position, dating back to at least 2011, has been to try to trade cuts in Social Security and Medicare for new revenues. It confirms that Sperling and his boss have been channeling the likes of Robert Rubin, Pete Peterson, the corporate-sponsored Fix the Debt campaign, et al., who have been promoting exactly this grand bargain. Sperling confirms that the sequester was designed to force exactly such a dismal deal.
But even worse, writes Kuttner, is what the e-mail demonstrations about Sperling’s–and Obama’s–pathetic negotiating skills.
The Woodward-Sperling exchange is far more interesting for what it reveals about Sperling/Obama’s propensity for giving ground on core issues and getting almost nothing in return. I supposed we should be grateful that Sperling is only wrecking the economy, the Democrats, Social Security, and Medicare—and not negotiating nukes with the Ayatollah.
I’ve said ever since I read The Audacity of Hope back in 2007 that Obama wanted to cut Social Security. Actually, he made it clear in the book that he wanted to privatize it, but he must have realized that wasn’t going to happen. It’s time for those of us who care about these issues to start screaming bloody murder again. We need to get on this ASAP. So tell your friends and call your Congress critters.
The floor is open for discussion.
Jay Carney was sent out today to mouth Obama’s slimy weasel words at the daily press briefing:
Q [Johnathan Karl, ABC] What about reducing the annual cost of living increases for Social Security recipients?
MR. CARNEY: Again, as part of a big deal, part of a comprehensive package that reduces our deficit and achieves that $4-trillion goal that was set out by so many people in and outside of government a number of years ago, he would consider that the hard choice that includes the so-called chain CPI, in fact, he put that on the table in his proposal, but not in a cherry-picked or piecemeal way. That’s got to be part of a comprehensive package that asks that the burden be shared; that we don’t, as some in Congress want, ask seniors to bear the burden of further deficit reduction alone, or middle-class families who are struggling to send their kids to college, or parents of children who are disabled who rely on programs to help them get through….
Q But I just want to be clear what you said at the beginning of that answer, which is the President….as part of an overall balanced approach, he does not rule out effectively reducing benefits for Social Security recipients?
MR. CARNEY: He has put forward a technical change as part of a big deal — and it’s on the table — that he put forward to the Speaker of the House. The Speaker of the House, by the way, walked away from that deal even though it met the Republicans halfway on revenues and halfway on spending cuts and included some tough decisions by the President on entitlements. The Speaker walked away from that deal.
But as part of that deal, the technical change in the so-called CPI is possible in his own offer as part of a big deal.
Excuse me? Cutting Social Security benefits by means of the Chained CPI is NOT a “technical change.” Once again, Bernie Sanders explains what is really going on: Chained CPI: An economic, moral disaster.
How many candidates for Congress last year won on the following platform?
1. That Social Security cost-of-living adjustments are too generous. Social Security should be cut over the next two decades by more than $1,000 a year for 85-year-old widows living on $1,200 a month.
2. That benefits earned by disabled veterans as a result of losing their arms, legs or eyesight in Iraq and Afghanistan are too generous. Disabled veterans’ benefits should be cut over the next 15 years by more than $1,400 a year.
3. That working families and the middle class don’t pay enough in taxes. We need to enact an across-the-board tax increase that disproportionately hurts workers making between $30,000 and $40,000 a year.
And yet all of these things will happen if Congress changes the way inflation is calculated by switching to a consumer price index (CPI) designed to lower cost-of-living adjustments….Wall Street billionaires and other supporters claim that changing the consumer price index is a “minor tweak.” Tell that to the millions of senior citizens trying to survive on just $14,000 a year whose Social Security benefits would be cut overall by $112 billion during the next decade.
Average 65-year-olds would get $650 a year less in benefits when they turn 75 and see a $1,000 a year cut when they turn 85.
Earlier, in response to an earlier question by Jonathan Karl, Carney supposedly took raising the eligibility age for Medicare off the table.
But why should we believe him? Sure enough Beltway Bob interprets the weasel words for us. On raising the Medicare age:
the cutoff for Medicare eligibility age has been under consideration repeatedly, giving health-care experts more time to run the numbers and parse their results. Their conclusion, essentially, was that raising the Medicare eligibility age is counterproductive: It cuts the deficit but raises national health spending as it moves seniors to more expensive insurance options. Some in the White House are simply more skeptical of the policy than they were two years ago.
The White House wants more revenues, and they want to get them through tax reform. But they’re not going to get $1 trillion in newer revenues. They’re hoping, at best, for another $600 billion or so. But that’s not enough for the administration to take the hit on the Medicare eligibility age. So they’re making their base happy and taking it off the table.
Does that mean it’s really off the table? Well, if Boehner went to the White House tomorrow and offered $1 trillion in new revenues, half of which would come via a carbon tax, in return for Medicare eligibility, I’m pretty certain the White House would hear him out. But the White House is pretty sure Boehner’s not going to offer that deal.
Here’s your Village in action. We have Ben White, POLITICO Chief Economic Correspondent, declaring on twitter that the White House offer to cut Social Security just isn’t going to get the job done:
If all WH has in return for another tax increase is superlative CPI I really don’t see any deal materializing.
— Ben White (@morningmoneyben) February 11, 2013
Ok fine, he’s just being a typical jaded and “savvy” Politico reporter. Why, of course, anyone who’s anyone knows that simply destroying Social security won’t be enough.
But look at how the White House immediately responds:
@morningmoneyben Remember we have an offer on the table that includes CPI, but also inclues Medicare changes and spending cuts
— Dan Pfeiffer (@pfeiffer44) February 11, 2013
@morningmoneyben R’s have no offer on the table, no plan, and no longer agree with their previous position that tax refom can reduce deficit
— Dan Pfeiffer (@pfeiffer44) February 11, 2013
See? We really do want to cut Social Security but that’s not all! We also want to “change” medicare and cut more spending. Really! We just dying to enact more austerity and we’re willing to do it as far as the eye can see! Those Republicans won’t even agree to tax reform, (which everyone knows means that we’re going to lower corporate rates.)
Ok, how about if we agree to slash funding for education and Veteran’s health care? Would you give us credit then? How about if we agree to ritualistically kill Big Bird on national TV? Then will you believe that we’re Grown-ups? CAN’T YOU SEE THAT WE ARE THE GROWN-UPS!!!! Why won’t you give us credit for being grown-ups ? We try so hard….
Read the rest of Digby’s post for her review of yesterday’s Sunday House of Pain with Dancin’ Dave.
Have I mentioned lately how much I fucking hate these fucking mealy-mouthed granny starvers? (h/t Mike Malloy) If we’re really lucky, and John Boehner is as stupid as he looks and sounds, Ben White’s prediction will be correct and there won’t be a “big deal.” Assuming Obama doesn’t get down on he knees and beg the Republicans to cut Social Security anyway, that is.
Senator Dan Inouye, who died yesterday at age 88 was a Japanese American who fought for the U.S. in World War II. From Time Magazine:
On Dec. 7, 1941, high school senior Daniel Inouye knew he and other Japanese-Americans would face trouble when he saw Japanese dive bombers, torpedo planes and fighters on their way to bomb Pearl Harbor and other Oahu military bases.
He and other Japanese-Americans had wanted desperately to be accepted, he said, and that meant going to war.
“I felt that there was a need for us to demonstrate that we’re just as good as anybody else,” Inouye, who eventually went on to serve 50 years as a U.S. Senate from Hawaii, once said. “The price was bloody and expensive, but I felt we succeeded.”
Inouye had wanted to become a surgeon, but he lost his right arm in a firefight during the war. He was elected to the House in 1959 after Hawaii became a state. Inouye became well known nationally as a member of the Senate Watergate Committee and later as chairman of the Congressional committee that investigated the Iran Contra scandal.
In one of the most memorable exchanges of the Watergate proceedings, an attorney for two of Nixon’s closest advisers, John Ehrlichman and Bob Haldeman, referred to Inouye as a “little Jap.”
The attorney, John J. Wilson, later apologized. Inouye accepted the apology, noting that the slur came after he had muttered “what a liar” into a microphone that he thought had been turned off following Ehrlichman’s testimony.
Inouye achieved celebrity status when he served as chairman of the congressional panel investigating the Iran-Contra affair in 1987. That committee held lengthy hearings into allegations that top Reagan administration officials had facilitated the sale of weapons to Iran, in violation of a congressional arms embargo, in hopes of winning the release of American hostages in Iran and to raise money to help support anti-communist fighters in Nicaragua….
The panel sharply criticized Reagan for what it considered laxity in handling his duties as president. “We were fair,” Inouye said. “Not because we wanted to be fair but because we had to be fair.”
NBC foreign correspondent Richard Engel and his production team have been released after five days in captivity in Syria. The Guardian reports:
The group disappeared shortly after crossing into north-west Syria from Turkey last Thursday (13 December). NBC had no contact with the kidnappers and asked for a news blackout about the incident, which was observed by mainstream news outlets.
There was no request for a ransom during the time Engel and his crew were missing.
After being abducted they were put into the back of a truck and blindfolded before being transported to an unknown location, believed to be near the small town of Ma’arrat Misrin.
Throughout their captivity they were blindfolded and bound, but otherwise not physically harmed, said the network.
Read more at the link.
According to Beltway Bob (AKA Ezra Klein), a deal between President Obama and Speaker Boehner is in the offing, and it isn’t a good deal for old ladies who are trying to survive on Social Security.
Boehner offered to let tax rates rise for income over $1 million. The White House wanted to let tax rates rise for income over $250,000. The compromise will likely be somewhere in between. More revenue will come from limiting deductions, likely using some variant of the White House’s oft-proposed, oft-rejected idea for limiting itemized deductions to 28 percent. The total revenue raised by the two policies will likely be a bit north of $1 trillion. Congress will get instructions to use this new baseline to embark on tax reform next year. Importantly, if tax reform never happens, the revenue will already be locked in.
On the spending side, the Democrats’ headline concession will be accepting chained-CPI, which is to say, accepting a cut to Social Security benefits. Beyond that, the negotiators will agree to targets for spending cuts. Expect the final number here, too, to be in the neighborhood of $1 trillion, but also expect it to lack many specifics. Whether the cuts come from Medicare or Medicaid, whether they include raising the Medicare age, and many of the other contentious issues in the talks will be left up to Congress.
Now how is that a win for Democrats? If we go over the cliff, Republicans are going to be blamed, and taxes will go up on everyone until Republicans give in to public outcry in early January. But Social Security, Medicare, and Medicaid cuts will inevitably be blamed on Democrats, who are supposed to fight for the social safety net. Then in 2014, Republicans will attack them for those cuts, and it will work–just as it did when Romney and Ryan falsely accused Obama of cutting Medicare benefits in the recent presidential campaign. Back to Beltway Bob:
The deal will lift the spending sequester, but it will be backed up by, yes, another sequester-like policy. I’m told that the details on this next sequester haven’t been worked out yet, but the governing theory is that it should be more reasonable than the current sequester. That is to say, if the two parties can’t agree on something better, then this should be a policy they’re willing to live with.
On stimulus, unemployment insurance will be extended, as will the refundable tax credits. Some amount of infrastructure spending is likely. Perversely, the payroll tax cut, one of the most stimulative policies in the fiscal cliff, will likely be allowed to lapse, which will deal a big blow to the economy.
Again, that doesn’t sound like a win for Obama at all. Let’s hope Beltway Bob is wrong again.
Dean Baker on the chained CPI: He argues that the chained CPI is not really applicable to seniors.
The Bureau of Labor Statistics (BLS) has constructed an experimental elderly index (CPI-E) which reflects the consumption patterns of people over age 62. This index has shown a rate of inflation that averages 0.2-0.3 percentage points higher than the CPI-W.
The main reason for the higher rate of inflation is that the elderly devote a larger share of their income to health care, which has generally risen more rapidly in price than other items. It is also likely that the elderly are less able to substitute between goods, both due to the nature of the items they consume and their limited mobility, so the substitutions assumed in the chained CPI might be especially inappropriate for the elderly population.
Baker explains for the umpteenth time that it is wrong to use Social Security cuts to lower the deficit.
It is important to remember that under the law Social Security is supposed to be treated as a separate program that is financed by its own stream of designated revenue. This means that it cannot contribute to the budget deficit under the law, because it is only allowed to spend money from the Social Security trust fund.
This is not just a rhetorical point. There is no commitment to finance Social Security out of general revenue. The projections from the Social Security trustees show the program first facing a shortfall in 2033 after which point it will only be able to pay a bit more than 75 percent of scheduled benefits. While this date is still fairly far in the future, at some point it will likely be necessary to address a shortfall.
It is reasonable to expect that the changes needed to keep the program fully funded will involve some mix of revenue increases and benefit cuts. However if the chained CPI is adopted as part of a budget deal unconnected to any larger plan for Social Security then it effectively means that there will have been a substantial cut to Social Security benefits without any quid pro quo in terms of increased revenue. This hardly seems like a good negotiating move from the standpoint of those looking to preserve and strengthen the program.
There is much much more at the link. Digby has been writing about this issue for months, and she had another good post on it yesterday.
There has always been some fantasy, mostly held by people who are about to be fleeced by Wall Street sharpies, that this country should be run like a cash business. It cannot and should not be done that way. (Ask Mitt Romney about the role of debt in a modern economy.) The problem is that this focus on debt is making it impossible to do the things we need to do to spur economic growth in the short term, which would close the deficit, and apparently the only way anyone in Washington can see to get around that is to sell off the future security of American citizens as some sort of human sacrifice for no good reason. It simply is not necessary, as Krugman shows.
John Boehner came up with a new “offer” this week-end to raise the rates on those who make a million or more each year and also agreed to take the debt ceiling off the table for the next year. Krugman thinks this is a bad deal which Obama has no good reason to take — and I would agree with him if I didn’t still see a very dangerous possibility that the administration wants to pursue some unacceptable spending cuts in order to deliver on that “balanced approach.” A looming debt ceiling fight is a very good excuse for them to do that. If kicking the can down the road another year will stop them from cutting more spending, then I’m inclined to say take the deal.
Obviously, this whole thing is ridiculous. They should get rid of this idiotic debt ceiling vote altogether: after all once they appropriate the funds they’ve agreed to pay for them whether through taxation or borrowing. This yearly vote allows them to get credit for the goodies and then later refuse to pick up the tab. But unless they are willing to give it up completely, I’d be glad to at least see it be delayed until the White House stops talking about cutting vital programs.
And yes, the taxes should go up for all income over $250,000. They can afford it. But not if the price is changing to the Chained CPI which will take the food out of the mouths of 90 year old women and squeeze veterans and disabled people who can’t afford it. In other words, the devil is in the details. If Obama hangs tough as Krugman prescribes and wins on all these points without giving up the store (also known as “making tough choices ” his own base “won’t like”) then I say go for it. I’m just not sure I have much faith that’s the game plan. If it isn’t, then maybe he should take Boehner’s offer, repeal the sequester and put this to bed for the time being. There’s been more than enough cutting already to drag this economy down. Let’s see what happens if we stop the austerity insanity for a while.
Dr. Dakinikat would probably agree with that.
Meanwhile, most Americans disapprove of the the proposed cuts to safety net programs, so maybe this will turn out to be another trial balloon that goes over like a lead balloon.
Most Americans want President Obama and congressional Republicans to compromise on a budget agreement, though they, too, are unhappy about the options that would avert the “fiscal cliff,” according to a new Washington Post-ABC News poll.
The strong support for compromise belies widespread public opposition to big spending cuts that are likely to be part of any deal.
Most Americans oppose slashing spending on Medicaid and the military, as well as raising the age for Medicare eligibility and slowing the increase of Social Security benefits, all of which appear to be on the table in negotiations. Majorities call each of these items “unacceptable.”
Wow. I’m running out of space already? Suddenly, a week before Xmas there’s more happening in the news. We’ll have to discuss other items in in the comments. So what’s on your reading list today?
Good Morning!! Let’s see what’s happening in the news today.
Well, of course the Obama apologists are claiming that he has suddenly grown a backbone of steel and become the liberal messiah they all dreamed of in 2008. I already told you about Ezra Klein’s delusional column last night. The other usual suspects are also getting leg tingles, and former Obots are starting to backslide.
This has to be the clearest sign yet that Obama has taken a very sharp populist turn as he seeks to frame the contrast between the parties heading into 2012. During his remarks this morning, Obama directly responded to Republicans accusing him of “class warfare,” but rather than simply deny the charge, he made the critical point that the act of protecting tax cuts for the rich is itself class warfare, in effect positioning himself as the defender of the middle class against GOP class warriors on behalf of the wealthy.
Wow! I’ll bet it never occurred to anyone that income inequality equals class warfare until Obama figured it out. Amaaaazzzzing!!
A senior administration official tells me that parts of Obama’s “class warfare” broadside were ad-libbed. Here’s the key chunk — and it’s a script that could have been written by just about any card-carrying member of the “professional left:”
Warren Buffett’s secretary shouldn’t pay a higher tax rate than Warren Buffett. There’s no justification for it. It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million…
We’re already hearing the usual defenders of these kinds of loopholes saying, “this is just class warfare.” I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare. I think it’s just the right thing to do. I believe the American middle class, who’ve been pressured relentlesly for decades, believe it’s time that they were fought for as hard as the lobbyists and some lawmakers have fought to protect special treatment for billionaires and big corporations.
Nobody wants to punish success in America … All I’m saying is, that those who have done well, including me, should pay our fair share in taxes to contribute to the nation that made our success possible.
Holy sh*t!! Obama ad libbed? Hope ‘n’ change! Change we can believe in! I guess it’s just me, but I thought that speech sounded kind of weak and defensive. But what do I know?
Booman has an even better rationalization for Obama’s behavior than
Beltway Bob Ezra Klein. According to the ever-gullable Booman,
…the president has a lot more credibility now when he takes his ideas to the public and says the the Republicans aren’t interested in compromise. You have to try and fail to get a compromise before that argument has any resonance. It’s not so much 11-Dimensional chess as basic common sense. Everyone’s poll numbers suffered during the summer, but no one’s standing was weakened more the Republicans’. That’s not an accident.
So Obama must have planned this. The man is brilliant!!
Digby says Obama is in campaign mode and that’s why he’s trying to sound strong and determined.
My first thought is that it appears the administration has finally decided that there’s nothing to be gained with exclusively delivering post-partisan pablum. It certainly sounds as though he’s thrown down the gauntlet. Unfortunately, the President appears to want to have two fights going into this election, one over job creation and one over whose plan to cut the deficit is better, which I think is a confusing waste of time. (Focus like a laser beam on jobs and tell the Republicans they’ll have to go through you to get to the safety net and I think people would instinctively understand that he’s on their side.) But that isn’t this president’s style and perhaps it wouldn’t be believable if he did it. So, this is at least a change of tactics, more confrontational in tone, which is his best hope for reelection since it turns out people aren’t really all that impressed that he’s the most reasonable guy in the room if it appears that he gets punk’d every time.
Digby things the proposed Medicare cuts are a loser politically, though–especially for Congress members running for reelection.
Jon Walker at FDL was “pleasantly surprised” that Obama didn’t call for Social Security cuts or “any specific major cuts to Medicare benefits,” but he hasn’t gone back on the Koolaid.
This is a positive development. Having President Obama publicly call for major cuts in Medicare benefits or change in age eligibility would have been terrible for our senior citizens and a total political disaster for the Democratic party. But it is important to remember: simply because the president did not put such cuts on the table doesn’t mean he took these cuts off the table.
President Obama has already privately signaled that in theory he would be willing to support major cuts to Medicare. And he’s hinted he’d be willing to cut Social Security benefits. They were both earlier put the table for a theoretical deal and this speech didn’t take them off the table. There was no veto threat to protect Medicare and Social Security benefits.
Actually, there do seem to be specific proposed cuts to Medicare. Jonathan Cohn breaks down the detail of the President’s deficit reduction proposal in a very technical piece that you can read if you’re interested. According to Cohn,
President Obama’s new deficit reduction plan includes about $320 billion in cuts to government health care programs. Most of the cuts from Medicare and that is sure to get a lot of people’s attention, if not now then in the presidential campaign.
But these reductions are less severe, and less worrisome, than some of the proposals Obama indicated he was willing to support over the summer, while he was negotiating with House Speaker John Boehner. In particular, Obama did not call for increasing the Medicare eligibility age from 65 to 67, as folks like me feared he would.
In fact, the cuts Obama has in mind are more or less consistent with the kind of cuts that you find in the Affordable Care Act: They are reductions designed to change the way Medicare pays for treatment and services, ideally (although not always) in ways that will actually improve the efficiency or quality of care. To the extent they would force individual seniors to pay more, it’d be in the form of higher premiums from wealthy seniors or higher co-pays for treatments likely to be unnecessary or wasteful.
For a reminder of who Obama really is, I’ll turn to Glenn Ford at the Black Agenda Report. His post was written a few days ago–before today’s speech–but I still think he has Obama’s number.
The GOP can count on Obama to offer up Social Security on the alter of austerity, as he has done consistently since January, 2009, while still president-elect. Back in April, he proposed $4 trillion in cuts over 12 years – nearly as draconian as his hand-picked committee – with the focus on the safety net. “By 2025,” warned the apocalyptic and grossly misleading president, “the amount of taxes we currently pay will only be enough to finance our health care programs, Social Security, and the interest we owe on our debt.”
Obama promises that his grab-bag, mostly supply-side and wholly inadequate jobs scheme will largely be “paid for” by cuts that include “modest adjustments [hah!] to health care programs like Medicare and Medicaid.”
Social Security stands to be mortally wounded at Obama’s hand. His second round of cuts in the payroll tax further undermine, not just the program’s trust fund, but its status as a free-standing entity outside of the usual congressional process. Congress will, theoretically, make up the temporary shortfall in payroll taxes through appropriations. But that puts Social Security in the middle of the budget deficit debate, where it does not belong and from which it has been purposely shielded since its origins in President Franklin Roosevelt’s New Deal. Through rhetoric and calculated action, Obama has for the past two and a half years been in league with Republicans in falsely conflating Social Security and the federal debt. He is now positioned to knock the program from its protective pedestal.
The Social Security cuts are already taken care of as long as the GOP goes along with extending the payroll tax holiday. The more money Obama can suck out of the Social Security trust fund, the more likely he can “reform” the Social Security into a welfare program or Wall Street ATM.
If Obama succeeds, Social Security will become just another “entitlement” to be mangled in a grand bargain with the GOP, like Medicare and Medicaid. Obama wants to be remembered as the president who brought the Republicans and the right wing of the Democratic Party into harmonious consensus – over the dead carcass of the New Deal. That’s what he means by “Go big!”
Chris Hedges has another excellent article up at Truthdig. It’s an interview with Obama’s former pastor and spiritual adviser: “The Rev. Jeremiah Wright Recalls Obama’s Fall From Grace.” I know not everyone will agree with Hedges’ point of view, but I mostly do. As outlandish as Wright was made to seem in the media, I couldn’t fault much of what I heard him say about America and racism. It’s a lengthy article, but I hope you’ll take a look at it.
One of the things Wright discussed with Hedges was the Martin Luther King Memorial in Washington DC. Wright himself raised $200,000 for the project.
“I think it’s a wonderful thing that the country would recognize someone as important as Dr. King,” Wright said when I reached him by phone in Chicago, “and recognize him in a way that raises his likeness in the Mall along with the presidents. He’s not a president like Abraham Lincoln or George Washington. But to have him ranked among them in terms of this nation paying attention to the importance of his work, that’s a good thing.”
“I read Maya Angelou’s piece about the way the quote was put on the monument,” Wright said in referring to the editing of a quote by King on the north face of the 30-foot-tall granite statue. The inscription quote reads: “I was a drum major for justice, peace and righteousness.” But these are not King’s words. They are paraphrased from a sermon he gave in which he said: “If you want to say that I was a drum major, say that I was a drum major for justice. Say that I was a drum major for peace. I was a drum major for righteousness. And all of the other shallow things will not matter.” Angelou said the mangled inscription made King sound “arrogant.”
“I read the explanation as to why we couldn’t include the whole quote,” said Wright, who helped raise $200,000 for the monument. “Kids a hundred years from now, like our pastor who was born three years after King was killed, they’re going to see that and will not get the context. They will not hear the whole speech, and that will be their take-away, which is not a good thing. My bigger problems, however, have to do with all the emphasis on ’63 and ‘I Have a Dream.’ They have swept under the rug the radical justice message that King ended his career repeating over and over and over again, starting with the media coverage of the April 4, 1967, ‘A Time to Break Silence’ message at the Riverside Church [in New York City]. King had a huge emphasis on capitalism, militarism and racism, the three-headed giant. There is no mention of that, no mention of that King, and absolutely no mention of the importance of his work with the poor. After all, he’s at the garbage collectors strike in Memphis, Tenn., when he is assassinated. The whole emphasis on the poor sent him to Memphis. But that gets swept away. It bothers me that we think more about a monument than a movement. He had a movement trying to address poverty. It was for jobs, not I Have a Dream, not Black and White Together, but that gets lost.”
He’s right. The powers that be have worked for years to minimize King’s work to end the Vietnam war as well as his determination to wipe out poverty. It’s interesting that this is the second time King has been misquoted on Obama’s watch.
This post is already too long, so I’ll end with an article by Dr. Doom (Nouriel Roubini): Eight drastic policy measures necessary to prevent global economic collapse. None of them will be popular. The first recommendation is that
we must accept that austerity measures, necessary to avoid a fiscal train wreck, have recessionary effects on output. So, if countries in the Eurozone’s periphery such as Greece or Portugal are forced to undertake fiscal austerity, countries able to provide short-term stimulus should do so and postpone their own austerity efforts. These countries include the United States, the United Kingdom, Germany, the core of the Eurozone, and Japan. Infrastructure banks that finance needed public infrastructure should be created as well.
Read the rest and weep. Our current “leaders” aren’t likely to pay any attention.
So sorry if I depressed you with that one. What are you reading and blogging about today?
A tweet and facebook post from Digby alerted me to an Axelrod/Blogger “roundtable” where he explained the semantics game in the SOTU. I just found the SOTU contradictory and rather schizophrenic. Except for the fact he still appears to know nothing about economics, Obama was full of on the one hand on the other hand kinds of policies. It was full of dichotomous metaphors along the lines of building up things while tearing them down and defunding things down while investing them up.
Chris Bowers has further coverage here at the Giant Talking Cheeto. It appears the usual “neoliberal” apparatchiks were there. Digby calls it a matter of semantics. Digby also believes we’re about to see a campaign of ‘strengthening Social Security’ argument by doing things that actually weaken it. She calls it “strength through weakness”. It’s that old Reagan game of labeling offensive, deadly missiles ‘peacekeepers’ to make them sound less offensive and deadly. She’s got a really good list of examples where the language mixes up the intent of the actions. At least some one else is noticing the schizophrenic policy and language.
As far as I can tell from Axelrod’s conversation with the bloggers and everything we’ve seen and heard from the political establishment, the only real “principle” here is bipartisanship. Obama gets high marks from the Villagers and Democrats when he forges a bipartisan deal with the Republicans — no matter what the deal is. That he was praised and rewarded for cutting taxes for the wealthiest Americans in a time of deficit fever tells you how far the American people have fallen down the rabbit hole. Don’t think he doesn’t get that.
Here’s the bottom line on Social Security from Chris Bowers who–at the moment–is less than enthusiastic. Let’s see how long that lasts.
The answers that we received are not answers that will make anyone entirely happy. Here is what I took from them:
- The Obama administration is not willing to repudiate the “crisis” narrative surrounding Social Security that dominates the national political media.
- President Obama explicitly repudiated privatization of Social Security in his speech last night, and David Axelrod reaffirmed that repudiation today.
- If there is going to be a “bi-partisan” agreement to alter Social Security, it will be brokered by President Obama himself. Congress is not going to pass a deal to which President Obama has not given his prior approval.
- President Obama strikes generally strong notes in defense of Social Security when it comes to other possible ways to cut the program. However, other than privatization, both he and his administration are unwilling to get too specific about where the line is drawn.
At least now, there’s a general realization that this doublespeak means we’re going to clearly get the pro-business, highly Republican alternatives for the next two years. Obama has gone full throttle on the Chamber of Commerce agenda and language. At this point, however, I think there’s also a general recognition that that the access bloggers will eventually throw their hands up and throw in the towel behind Obama because of the usual deal. That is the Republicans are clearly bug fuck nuts so we can do worse. The Republicans seem hell bent at showing exactly how worse they can be right now. Even Bohenerella couldn’t shut up Michelle Bachmann and her twisted sister audiovisuals and crazy delivery to some camera some where stage right. Don’t even get me started on her revisionist history of slavery and the founding fathers. She’s a good example of what you get when you dumb down education via religication.
All you had to do was listen to Paul Ryan and Michelle Bachmann to see that both have a less than firm grasp on reality and the facts. They are deniers of history, economic theory, science, math, and facts. The more they speak, the more those independent voters flip the approval switch on the Presidential mumbo jumbo policy gumbo. This just puts the president in the catbird seat to continue the Corporate Takeover of America and its institutions.