Obama offers Chained CPI (plus master list of “benefit cuts”)

UPDATE: And Obama has offered up Chained CPI — cuts to Social Security benefits — to Boehner, according to a number of news sources. Here’s the Washington Post:

President Barack Obama has agreed to curtail future cost-of-living increases for recipients of Social Security and softened his demand for higher taxes at upper income levels as part of accelerating talks with House Speaker John Boehner to avoid a “fiscal cliff,” people familiar with the talks said Monday.

Speaking a few hours after Obama and Boehner met at the White House, these people said the president was now seeking higher tax rates beginning at incomes over $400,000 for couples, down from the $250,000 level that was a cornerstone of his successful campaign for re-election.

Just as predicted. Check out that new tax ceiling as well. Just enough taxes to count as a win — if you’re not looking — and a knife in the back of the safety net. No doubt about it — this is a benefit cut. See below; more as the story evolves.
________

The Obama-Boehner Fiscal Shakedown Cruise (“fiscal cliff negotiation” in the words of the wise) is coming to a thrilling conclusion. I’ll have the schedule for the end-of-year sellout in a separate post. It’s a tight one.

Here I want to lay down a marker, a definition of what’s meant by “benefit cut” to one of the big three social insurance programs the Democrats have, until lately, been so proud of.

Mr. Obama, this is the Hands Off List. Feel free to clip and save it. An attack against one of these — any one of these — is an attack on social insurance in America. Hands off!

When the fox comes to the hen house, don’t guard the doors separately

What’s been happening with the social insurance programs has a lot in common with the fox-and-hen house problem, especially if the hen house has more than one door.

The lame-duck foxes keep circling the benefits hen house. First they try Door A — raising the Social Security retirement age. The hens put up a squawk and the farmer (you) shows up with a baseball bat and fire in his eyes. So the foxes retreat.

fox_320px-Sunny_FoxThen they try Door B — cuts to the cost-of-living adjustment (COLA) — cleverly disguised as revenue enhancement. The farmer shows up again, and the foxes retreat, again. The foxes circle back, and try Door C — raising the Medicare eligibility age — but that gets beaten back as well (nice going, folks).

But the foxes are still out there, and the farmer is making a lot of separate trips to deal with their forays. What the farmer needs is a fence that treats all the doors the same — they’re all inaccessible, all shut, all fence in.

We need the same — a list of all the hens and all the ways to get at them. Anything attack on on part of the list is an attack on the whole list. Each item stands for the rest. An attack on any item is a knife in the back of seniors and recipients.

What are we protecting?

We’re protecting three social insurance programs. These are:

■ Social Security
■ Medicare
■ Medicaid

What are we protecting them from? Anything that:

■ Reduces benefits
■ Turns the program from insurance to welfare (which only the “deserving” have access to)

How are these programs being threatened?

As near as I can tell, these are the threats. Note to foxes — this is the hands-off list. Each of these seven items is a benefit cut:

Social Security
1. Raising the retirement age
2. Chained CPI instead of current COLA
3. Means-testing benefits

Medicare
4. Raising the eligibility age
5. Increasing Part B premiums
6. Increasing “cost-sharing”

Medicaid
7. Shifting costs to the states by any means, such as “federal blended rate,” etc.

And that’s the list — seven items. Mr. President, hands off. Mr. Speaker, hands off.

The detail on these attacks

Here’s the detail on each of these benefit attacks — what it is and why it’s wrong.

Social Security

  1. Raising the retirement age and the “earliest eligibility age”. Right now you can retire with some benefits at 62 and full benefits at 67. Simpson-Bowles, the Obama-appointed Catfood people, want to raise the full age to 69 and the early eligibility age to 64.

Daniel Marans, who works at SocialSecurityWorks.org, reminds me via email:

Raising the full age two years amounts to a 13 percent across-the-board cut from what you are currently scheduled to get at whatever age you claim benefits. It is also the most regressive, discriminatory option against the non-rich.

  1. Using “Chained CPI” to change the COLA adjustment. The COLA adjustment is already horribly low. Making it lower is unconscionable. Marans again:

CPI would devastate long-time disabled and late old-age Social Security beneficiaries—including current beneficiaries—cutting benefits for a worker claiming at age 65 by $653 a year at age 75, $1,139 a year at age 85, and $1,611 a year at age 95. It whacks veterans and the indigent disabled on SSI too. And of course, the tax increases it imposes are especially regressive.

  1. Mean-testing — reducing earned benefits for the “wealthy.”

There are two problems with this. First, you’d have to cut benefits for people earning less than $50,000 per year to get any real savings. And second, converting Social Security to welfare is Goal One of the kill-it crowd, ’cause you know what we do to welfare in this country, don’t you? We kill it. More here.

Medicare

  1. Raising the eligibility age to 67. Horrible idea. Marans again:

This is a disastrous policy that would put 435,000 of 65- and 66-year-olds out on the street without insurance, and jack up out-of-pocket costs for everybody, eroding Social Security benefits by proxy.

Plus it will kill people. Actual humans, thousands of them.

  1. Increasing the Part B premiums. This is a bad idea on two counts.

Right now, the government subsidizes Medicare Part B premiums, according to an income-adjusted sliding scale. Income-adjusted premium support is already a form of means-testing — as noted above, a very bad idea. Changing this scale would be even worse, since half of Medicare beneficiaries had incomes below $22,000 a year in 2010.

  1. Increasing cost-sharing. This means paying less out of Medicare’s pocket for treatment, making you pay more. Gouging the elderly to save a view federal bucks. This is the opposite of what the program was designed to do.

Medicaid

  1. Shifting costs to the states. Anything that saves federal dollars by making states pay more will hurt recipients. Period.

The most recent proposal came in 2011 with Obama’s proposal of a “federal blended rate” for state reimbursement for Medicaid and CHIP (Children’s Health Insurance Program — yep, saving money on the backs of children). The detail is here, but there’s a bottom line.

Medicaid isn’t sexy. It’s wonky from the first sentence. It’s easier to cut since it looks from the outside the most like welfare — you know, it goes to poor people and all.

But it’s a cut, it will likely cause needless deaths, and it needs to be ring-fenced like the rest of these vulnerabilities — these doors through which the “deficit hawks” will use to get at the chickens. Medicaid may be the last of the hens at risk — our foxy friends will go after bigger, more symbolic prize first. But if they have to, they’ll take the scalp they can get, and that may be Medicaid.

Today’s bottom line

Obama will try (in my view) to give something away that you need and want. It’s the design of the deal. What Obama gives away will be something from this list. In exchange for your pain, he’ll let a bunch of billionaires off the hook for the big tax increase he gets by doing nothing (39.6%) — the plan is to settle for a smaller increase (37% or less is my guess), just so he has something to wave in front of you.

Which lamb will Obama sacrifice? Which hen will he toss to the foxes? Watch that “chained CPI” proposal. It’s got foxy eyes all over it these days.

Chained CPI is one of the Social Security attacks. Barack Obama, the Man Who Shot Social Security — in the back. (Please, prove me wrong, sir.)

GP

To follow or send links: @Gaius_Publius


Gaius Publius is a professional writer living on the West Coast of the United States. Click here for more. Follow him on Twitter @Gaius_Publius and Facebook.

Share This Post

  • http://adgitadiaries.com/ karmanot

    I don’t know that Hobbit.

  • Kenneth C. Fingeret

    Hello karmanot,

    Another name comes to mind. Vidkun Quisling! Another politician who sold out his countrymen.

  • Kenneth C. Fingeret

    Hello condew,

    Who the hell saves enough for a “good retirement” besides the wealthy? And this 5x 2x bs. The statistics state the last year of life is where the majority of the costs are associated with Medicare. I doubt that the 5x 2x ratio applies due to the skyrocketing costs/profits of the financial/medical/pharmaceutical complex.

  • Kenneth C. Fingeret

    Hello PhilW,

    Please start the sacrifice. Give up all government assistance direct and indirect. That includes roads, the educational system, protection for your funds in financial institutions just to name a very few of the things you should sacrifice.

  • Kenneth C. Fingeret

    Hello PhilW,

    Yeah everyone is capable of non-physical work. One job is counting the fuzz on caterpillars. Would you like that one. There is an opening as no one has met the requirements yet.

  • Kenneth C. Fingeret

    Hello PhilW,

    If you have not heard of the fix I will let you onto the secret. Make everything above $ 110,000 approximately subject to Social Security and Medicare. 100% problem solved!!!!!!!!!!!!!!!!!!!!!!

  • Kenneth C. Fingeret

    Hello Bill_Perdue,

    While Obama might not be in the 1% yet you can bet he will be soon after he leaves office. Having done his job the 30 pieces of silver (1% status) is his reward.

  • Kenneth C. Fingeret

    Hello Bill_Perdue,

    Yes but this time as well as others in the past the Dumbocrats are leading the charge to the bottom.

  • Kenneth C. Fingeret

    Hello Bill_Perdue,

    Time to move the Rethugs and Dumbocrats parties to the exalted status enjoyed by the Whig Party!

  • Kenneth C. Fingeret

    Hello FunMe,

    My back feels la sharp pain (like a knife has just been used to stab me by the backstabber in chief. Whenever this happens I think of the O’Jays song “Back Stabbers”

  • Kenneth C. Fingeret

    Hello NCMan,
    If ALL REAL cost savings methods were implemented there would be no need for cutting benefits from now until the Sun goes boom some 4+ billion years from now.

  • Kenneth C. Fingeret

    Hello Gaius Pubilus,

    Time to remove both political parties (sic) uniparty to the dustbin of history. The surrenderer in chief (a republican in democratic party cloth plus all of his enablers) have made this a necessity. To keep either party is the road to complete destruction of the US. Keep up the “good work” Barry O. not! He is the combination of General Bashington T. Bullmoose and Jubilation T. Cornpone from Lil Abner come to life.

  • Quiddity

    It has been obvious from the day Obama was elected in 2008 that he’s basically a moderate Republican (old style). Certainly the staffing of the Simpson Bowles commission was an indicator.

    I’m pretty bummed. The only entertainment for me is to visit various O-bot blogs (Booman, Balloon Juice) to see how they spin Obama’s preemptive concessions as things he “had to do”.

    With the health care legislation, there were claims that Obama did the best he could do. While many of us disagreed, it was hard to prove Obama could have gotten a better deal. That’s not the case with this budget/tax issue. There is no 60 vote threshold needed to raise taxes. The weak hand is held by the Republicans. So this episode will be the clearest example of where Obama really stands on supporting the New Deal and Great Society programs.

  • http://adgitadiaries.com/ karmanot

    For Christ’s sake—go away!

  • http://adgitadiaries.com/ karmanot

    pppfffftttt

  • Naja pallida

    I don’t know, do you think we could convince Wal-Mart to hire 10 million more greeters to help the country?

  • Naja pallida

    A betrayal of Democratic and democratic ideals. If he had spelled this out during the election as something he intended to do, he probably would have lost. Obama seriously needs to sit down and listen to some of FDR’s fireside chats, and try to reconnect with what it should be like to be a Democratic politician.

  • Sweetie

    No kidding.

    Oh, geez. I won’t cut Social Security so I’ll offer to cut it.

    Digby is either a moron or a stooge.

  • Sweetie

    “And Obama has offered up Chained CPI — cuts to Social Security benefits — to Boehner…”

    No, not to Boehner. Boehner is just part of the theatrical cast. We know who he is offering those cuts to.

  • Bill_Perdue

    “With Romney, it would have been “Whatever the Tea Party wants, the Tea Party gets”, and the Koch brothers rep would be occupying the White House, making sure that nothing the rich don’t want ever gets a signature.”

    Which differs from the Obama WH in what way? It is true that Romney is part of the 1% and Obama is a political prostitute, but that hardly constitutes a difference between them.

  • Bill_Perdue

    Exactly.
    Bill Perdue, RWU, TCU/IAM AFL-CIO

    Some components of the emerging union left:

  • K_L_Carten

    Most have already lost most of their 401 K savings and haven’t recovered and let’s be honest won’t recover what they once had.

  • nicho

    Unless you have some very special skills, you are dead in the job market after 55 — after 50, you are very unemployable. After 60, you don’t exist.

  • K_L_Carten

    We are talking about disabled people, and most can’t sit or stand for long periods of time. I know I am one. One of the papers that must be filed out by the doctors is the period a person can stand and sit. The thing about being disabled is things that you don’t think about such as sitting or standing for more than 15 min. is very hard. Another thing is doctor visits, I have four doctors that I see regular and frankly employer’s aren’t that keen on allowing people to take that much time off to see various doctors or have various procedures done on a regular basis. I have two doctors I see on a semi regular basis, I spend a lot of time at the doctor. Usually the only time I get out of the house is to the doctors.

  • nicho

    Nonsense. Absolute nonsense. A lie propagated by Corporatists and swallowed whole by suckers.The actuaries who run the system and adjust the contributions know exactly what the birth rates and life expectancies are. This was factored in.

    What wasn’t factored in, because it was unexpected, was that so much of the national revenue goes to those above the cutoff line for payroll taxes. Payroll taxes were intended to cover 90 percent of the total national income. However, with wages stagnant at the bottom and being siphoned off by those at the top, the payroll tax now covers less than 80 percent of wages. That is the only “problem” and the only thing we need to correct.

  • nicho

    Sorry, Condew drank it all. None left.

  • nicho

    Yeah — Saddam Hussein would have been worse — as would Stalin. Useless comparison.

  • nicho

    And November 2014 isn’t that far away. Voting starts in 22 months. Candidates need to start raising money tomorrow. It’s going to be a tough battle for the quisling Dems.

  • K_L_Carten

    You become disable and fight for your Social Security Disablity. If you are lucky you might get it after your first denial, and if you aren’t then it takes years and going to court. It took me five years, I was lucky I had a husband to pay the bills and insurance. Many people aren’t so lucky with the someone else bringing in income or insurance, and usually end up losing their house or their health is in such a decline. You have to get a lawyer, and if you are about to lose the house you might get fast track or about to die with cancer, but those depend on the state and how backed up the system is. I was lucky I didn’t have to go in front of a judge, I was approved in judicial review, which I was told rare. As my lawyer told me it just goes down to lots of paper work, and boxes of medical paper, you will get it just take that paper and time.

  • http://adgitadiaries.com/ karmanot

    Obama is not bluffing. He’s fully on board. Remember how he promised universal health care and then, in a backroom deal, sold us out to the insurance industry?

  • http://adgitadiaries.com/ karmanot

    There SHOULD NOT BE a debate about Social Security. The age should be lowered, not raised, and the amount increased. Obama will go down in history and join swines like Hoover, Clinton, and Nixon.

  • http://adgitadiaries.com/ karmanot

    Obot Cool-aid, anyone?

  • http://adgitadiaries.com/ karmanot

    YES!!!

  • http://adgitadiaries.com/ karmanot

    “Workers need political independence from the parties” Indeed, but they will have to restructure the union suits first. Union management is totally complicit in the destruction of their base. I am a union member have absolute contempt for the suits, who betray us time and again. Come to think of it, just like Obama.

  • http://adgitadiaries.com/ karmanot

    I wish Impeachment were possible.

  • http://adgitadiaries.com/ karmanot

    I’ll be first in line along with dozens of my friends and family.

  • http://adgitadiaries.com/ karmanot

    yep

  • condew

    Oh, god, that old saw! Only comes from people too lazy to look close enough to find the difference. You thing Romney would have even bothered to negotiate? With Romney, it would have been “Whatever the Tea Party wants, the Tea Party gets”, and the Koch brothers rep would be occupying the White House, making sure that nothing the rich don’t want ever gets a signature.

  • Bill_Perdue

    Democrats are not part of the left, even using fuzzy terms like ‘progressive’. Our battle is against, not with Democrats.

    Democrats and their Republican cousins are enemies of the left of the fight for socialism and revolutionary change. Democrats are right centrists moving right to outflank Republicans from the right.

    Democrats are Republicans in drag.

  • condew

    Yup, Boehner is bluffing and Obama is falling for it like he always does.

  • FunMe

    I’ve been posting about the threats to Social Security, Medicare and Medicaid, and NO ONE of the several people posting pro-Obama posts almost every day during the election has responded. NO ONE. They are typical cheerleaders for elections (they’ll do great at football games), but when the real work comes and they get stabbed in the back, they do nothing. Sad.

  • condew

    The target probably isn’t the seniors who are barely making it, it’s the middle class. If you’ve saved enough to have a moderately good retirement with, say, a little extra to own a car or travel a bit, that will be taxed away by lower cost of living increases, higher Medicare premiums and copays, and means testing. There was already some talk of a rebate for lower income seniors. For the upper middle class who paid 5 times as much in payroll taxes for twice the benefit, now you’ll still pay 5 times as much, but for the same benefit.

  • condew

    And now Obama never has to personally face the voters again. Only way to punish Obama would be to make 2014 a referendum on his policies and make Democrats lose big; but since Obama is a closet Republican, I think he’d love more Republicans in 2014. Still, Romney would have been worse, much, much worse.

  • condew

    Yes, it makes the battle so much easier when a divisive fool tries to set one faction of Progressives against another.

  • condew

    Democrats look out — old people vote; angry old people will make every election an up-hill battle.

  • condew

    The worst part is that if Obama gets away with cuts to Social Security, it de-energizes the third rail of politics, and future Congresses and Presidents will come back to take more.

  • Bill_Perdue

    Democrats and Republicans are equally to blame.

  • http://adgitadiaries.com/ karmanot

    If you think this is one of Obummer’s multi-layered Chess games dream on. Obama is the problem,

  • http://adgitadiaries.com/ karmanot

    Yep

  • http://adgitadiaries.com/ karmanot

    Bullshit. Millions of seniors barely make it on SS as it is. Obama’s stand against seniors and the medically vulnerable makes him what we thought since the beginning— a lying SOB and a corporate tool.

  • http://adgitadiaries.com/ karmanot

    When was the last time you knew anyone who got hired past the age of 55, except for a guard crossing perhaps?

  • http://adgitadiaries.com/ karmanot

    We die

  • http://adgitadiaries.com/ karmanot

    “President Barack Obama has agreed to curtail future cost-of-living increases for recipients of Social Security” and a knife in the back of the safety net. No doubt about it” I will make myself live long enough to vote against every Democrat on the slate.

  • Bill_Perdue

    Καλώς ήλθατε στην Ελλάδα!

  • tsuki

    I don’t know why everyone acts surprised. Obama has wanted to cut Social Security CPI since the days of the Catfood Commission, or before. He has made the offer time and time again. He is dedicated to it.

  • NCMan

    Please describe what you think Boehner has given in this negotiation to date? Because as far as I can see, the only one who has offered up anything new since the start is Obama. Obama’s original offer was:

    39.6% for all over $250,00continue the payroll tax holiday
    extend unemployment benefits
    targeted stimulus package

    Boehner’s original position was:

    NO

    Obama has gone from 39.6% to 37%, no payroll tax extension, $400,00 for tax hike and cuts to SS and Medicare.

    Boehner’s new position??? Maybe I’ll think about the tax increase over $400,000 if you cut SS and Medicare even MORE. But, there will be NO stimulus and no payroll tax extension and no unemployment extension.

    So, where is Boehner compromising? He’s not. Not one little bit.

  • dula

    Yes, I’m sure employers are knocking down doors in order to hire 60yr olds.
    Raise the SS cap and the program will be self funding forever.

  • NCMan

    This is a great list of what NOT TO TOUCH. May I suggest you supplement it with a list of what SHOULD BE TOUCHED and give the reasons why.

    One example would be negotiated drug prices for Medicare which saves more money than the age increase proposal and it actually lowers the costs of healthcare instead of just shifting the costs to individuals. It’s real cost savings without a cut in benefits.

    Add to the list the FACT that SS has nothing to do with the budget or the deficit and that it can be saved forever by eliminating the cap on FICA taxes. Be sure to explain how the cap allows the very wealthy to pay a much smaller percentage of their income into SS that anyone earning less than $110,000 per year.

  • NCMan

    Please go and check your statistics. SOME PEOPLE are living well into their 80s. You know who those people are? THE RICH PEOPLE.

    Besides, there are ways to lower the costs of Medicare and Medicaid without reducing the benefits. One easy way is to allow the government to negotiate drug prices. This saves MORE money than the increasing of the eligibility age and it doesn’t shift the costs to individuals like the increased age does. It is REAL COST SAVINGS. There are many other ways. And, ALL of those ways should be implemented BEFORE anyone cuts $1 in benefits.

  • PhilW

    A very good point. But, could that person not do non-physical work later in life? I’m not saying they should, but just raise the question.

  • PhilW

    An obvious solution, which I’m sure is why congress will never think of it.

  • PhilW

    I’m not saying it HAS been a two-way street, but while it’s useful for the purpose of debate to stand unflinching, in the end we are most successful when everyone gives a little. Again, saying “no no no this is never ever ever an option” is just as insane as the other side.

  • MyrddinWilt

    No, compromise has not been a two way street.

    The only reason for the fiscal cliff is that the GOP rammed through the Bush tax cuts without paying for them and then held the debt limit gun to the President’s head to get sequestration.

    If the tax cuts expire and the sequestration bomb is simply cancelled there is absolutely no problem. The deficit returns to about a fifth the current size by the end of Obama’s second term without extraordinary measures.

  • lynchie

    SS is not part of the budget. What part of that is hard to understand. If it is not part of the budget what does it have to be changed. Simply raise the amount on contributions.

  • Mike_in_the_Tundra

    Eliminating the salary cap would solve the problem. Of course, our overlords wouldn’t like that, so let’s stick it to the middle class.

  • dula

    What if you’ve worked in a job that requires real physical labor and your body can’t tolerate the abuse past 65?

  • PhilW

    Sorry, folks, but this “hands off list” stuff is just as bad as Grover Norquists “no taxes for any reason” pledge. I agree that we need to protect the safety net, but people are living until well into their 80s vs their late 60s when the programs were created. Compromise is a two-way street, and this constant ranting about how we can not give anything is as juvenile as the tea partiers and their ilk.

  • MyrddinWilt

    As Digby points out, the point of trial ballooning is to see what the reaction is. Pointing out that this might merely be a negotiating position, no need to get freaked out misses the fact that the whole point here is that we NEED to get freaked out to show that this is a non starter.

    I don’t think we need to get too concerned about the likely outcome here. The GOP has a completely shit hand right now and Boehner knows it. Problem is that his caucus does not.

    So we are going to go over the cliff, that part is probably inevitable. And then Obama gets to wield the line item veto substitute called ‘sequestration’. And there are going to be military bases closing in GOP districts across the South.

    Obama can’t appear too eager to use this power, but it is going to be a lot easier to reinstate the non-military spending cuts.

    Boehners caucus doesn’t really want the cuts either. They are just afraid of being singled out by the Koch brothers in the primaries. So putting unacceptable cuts on the table throws the GOP in a bind. Do they vote for them or join Reid and the Democrats in opposing them?

    So we have to freak out right now, but this is all a very stupid game and the only reason we are playing it is that the GOP’s first priority is to deliver ratings to Faux News.

  • Mike_in_the_Tundra

    Will the chained CPI be used on the congressional retirement benefits? That could save a good bit of money as well.

  • mirror

    I’m kind of sickened that Obama is using the school shooting as an opportunity to slip in these cuts, with fast track, no less.

    Of course, it won’t keep the Democratic party from being given the blame for having proposed them.

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