Did Sen. Schumer walk back support for a “Chained CPI” Social Security cut?

There’s an interesting set of stories around US Senator Chuck Schumer (D-NY) and the various debt ceiling–sequester negotiations going on at the moment. It appears that Schumer may have come out in favor of Chained CPI, then got the story walked back — or corrected. Richard Eskow, writing at Campaign for America’s Future (my emphasis and paragraphing):

Here’s a “Washington insider” story that could affect every family in the country. Congressional newspaper The Hill reported Wednesday that Sen. Charles Schumer, D-N.Y., was considering using a special parliamentary maneuver to push a budget deal. … This story included an explosive paragraph that seemed to suggest that Schumer, the Senate’s No. 3 Democrat, was interested in a deal that included the “chained-CPI” cut to Social Security benefits. It also included cryptic language about “Medicare reform,” words that are often used as Beltway code for raising the eligibility age or other drastic benefit reductions to that program.

Like a dog that’s always circling behind its prey looking for a way to jump in — I actually had a dog do that to me once in an open field — the Rubinites and billionaires who run the Democratic party are constantly eyeing cuts to the social programs, constantly looking for an opening to move in.

Chained CPI is one of the seven “benefit cuts” we wrote about earlier. Obama tried to get Chained CPI into the Obama-Boehner deal, until progressives and others pushed back enough to make him (and Hoyer and Pelosi, et al) delay those plans.

SSW_ChainedCPI_benefit-cutNow those benefit cuts appeared to be back on, via Schumer’s reported support. Eskow is right about The Hill’s reporting. Two-thirds of the way through the article, this appears:

The joint budget resolution could also call for Medicare reforms and using the chained CPI formula to curb the cost of Social Security benefits. These entitlement reforms combined with tax reform would give Republicans political cover to accept tax increases — or at least more cover than if tax increases were merely packaged as an offset to the sequester.

So game back on? Not so fast — the story doesn’t end there. That paragraph attracted a lot of attention, and Schumer’s office started getting calls. At CAF, Eskow reports:

initial calls to Schumer’s office went unreturned

So CAF and others started issuing statements strongly opposed. The House Progressives (the CPC, which we’ve written about) also piled on. Eskow still:

In what seemed to be a reaction to the story, the Congressional Progressive Caucus issued a statement immediately afterward entitled “CPC Rejects Proposed Cuts to Medicaid, Medicare, and Social Security.” “Using the chained CPI to reduce cost of living adjustments is a benefit cut that middle class Americans cannot afford,” it read.

I’ve faulted the CPC’s actions, but never their statements. Schumer was getting an earful, and his office knew something was up.

Schumer staffers also reportedly made at least two off-the-record calls to progressive groups strongly denying the story.  By this time Sen. Schumer had been the target of some negative comments from activists[.]

Finally there was a change to The Hill story. Here’s where Eskow speculates (kindly) about Schumer and what he may have said:

As it turns out, Schumer apparently never said it.  At 6 pm this evening The Hill modified its article to include a paragraph which read:

Schumer’s office does not support the idea of fast-tracking Medicare cuts or the chained-CPI formula for Social Security through a budget resolution, proposals that Republicans would likely support. A Schumer aide noted that a reconciliation package could not make cuts to Social Security.

But activists, progressives, and independent groups remain on full alert.  This denial is welcome, but it’s based on procedural rules and is not a statement of unequivocal opposition to these reductions.  Democrats on both ends of Pennsylvania Avenue can expect the fierce resistance to the chained CPI and all other benefit cuts to continue.

If you click the link for The Hill’s article, you’ll see the added paragraph below the dangerous one (dangerous to Schumer, that is). Note that Eskow says Schumer “apparently” never said it.

Bottom line

Eskow’s takeaway is this:

This is partly the story of a poorly-worded paragraph on a volatile topic. But it’s primarily an economic and political story, not a media one. The fiery response from House progressives and outside groups demonstrates that there is growing and organized resistance to the chained-CPI.The prompt clarification from Schumer’s office, as reported in The Hill, shows that an increasing awareness among leading Democrats that the idea is politically toxic.

My takeaway is a little different. I’ll leave it for you to decide if The Hill got the Schumer position wrong, or if Schumer walked back from a suddenly dangerous position. With no proof in front of me, I tend to trust The Hill over Chuck Schumer.

Either way though, know that it’s coming. The billionaire-wing of the Democratic party (Obama and Schumer included) will only let go of cuts to the social insurance programs if we make them pay a price for thinking about it. Asking nicely because they sometimes talk nice about minorities and women won’t cut it.

They’ve wanted these cuts for a long time — since at least 2006 in Obama’s case — and they won’t stop until they’re stopped. It’s a core belief of the globalization free-trade crowd of which Robert Rubin and Bill Clinton are charter members that the newly impoverished (by billionaire-written trade rules) must now adapt to a changed and restricted world.

As Obama said in the speech:

“Too many of us [on the left] have been interested in defending programs the way they were written in 1938“

and:

“Most of us are strong free-traders.”

There’s a reason those quotes go hand in hand; the trade rules suck wealth from us all; then hired and vetted politicians shepherd our adjustment to our new lack of resources — for the good of the nation, of course. (You don’t think Obama was vetted? He was rolled out in 2004 by the billionaire-financed free-trader Bill Clinton, vetted for his ideas by Rubin and others in 2006 as above, then financed by big money between 2006/7 and 2008. Count on it. Clinton knew what he was doing, whom he was promoting.)

You’ll find references, by the way, to that need of ours to “adapt to this changed world” threaded all through Obama Inaugural speech as well. A taste:

“when times change, so must we”
“outworn programs are inadequate to the needs of our times”
“we must make the hard choices”

See what I mean? Those parts gave me chills, bad ones.

Yours in resistance,

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.

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  • Christine Wheeler

    Chained CPI would affect ALL federal retirement and pension checks, to include disabled veterans and federal retirees. The federal retiree fund is funded by federal employees contributions over the years, is self sustaining, and in fact the government general fund periodically borrows from it.. A major problem right now (which is the result of doomsday predictions, lurching from one deadline to another, all conveniently crafted by the House Republicans) is misinformation, lack of complete information and therefore erroneous conclusions. Did you know that the chained CPI would throw folks into higher tax brackets? so it doesn’t just affect retired people. Everyone needs to contact their representatives in Congress and tell them this is a bad idea, being manipulating into a seeming emergency measures.

  • perljammer

    My bad. I meant to say “it would be worth it to ensure the viability of the Social Security system.”

  • condew

    I remember when I-bonds paid about 2% more than inflation. Now they just pay inflation. And they still think that is such a good deal they will only sell $10K per individual per year.

  • condew

    The answer to Medicare’s problems. Make grandma live under a collapsing bridge!

  • condew

    By my understanding, SSI is not Social Security; it is “Supplemental Security Income”; a program to add money to the benefits of the poorest seniors (say increase a $300 Social Security check to $600). I don’tknow where SSI money comes from, but I think it is the general fund.

  • condew

    When our politicians favor policies that help business and borrowers by encouraging inflation (and cutting interest to nothing), it seems only fair that the government increase Social Security payments for inflation at least as much as they do now; or even better, change to CPI-E. When they enact policies to help everybody else, they should not hurt seniors.

    They should at least leave the buying power of Social Security benefits untouched while they steal the buying power and the earnings of my savings to “stimulate” the economy into inflation.

  • http://twitter.com/sipples Timothy Sipples

    If Congress and the President want to switch Social Security, veterans benefits, public pensions, and other government programs predominantly affecting the elderly to chained CPI-E (and also index the minimum wage to CPI-U or CPI-W), that would be just fine with me. CPI-E more accurately reflects actual inflation experienced by the elderly, whereupon chaining is defensible. You are exactly right: the elderly do not actually do much substitution as the relative prices of goods and services that they might buy varies, so chained CPI-E is little different than unchained CPI-E.

    But sure, if Congress and the President want to improve the benefit calculations so that they more accurately reflect the inflation actually experienced by beneficiaries, no problem: CPI-E (chained or unchained) is the only acceptable answer for Social Security.

    For that matter, Congress and the President should also allow Americans over age 60 to buy new “Golden I Savings Bonds.” Such bonds would be exactly like I Bonds except the yield would be calculated based on the CPI-E instead of the CPI-U.

  • fredndallas

    Thanks Gaius and Americablog for the continuing excellent exposure of Obama and the Democratic Party gang of progressive impostors. Exposure of their hypocrisy and manipulations is the most powerful weapon we have. All of us have a moral obligation to circulate these truths widely.

  • htfd

    Why aren’t subsidies to corporations and banks called entitlements along with all the tax loop holes they are given. These are the actual entitlements that add so much to the deficit.

  • Ford Prefect

    True dat! Collapsing bridges offer so much more!

  • Naja pallida

    Yeah, but the same douche bags don’t even want to fund the maintenance of bridges for grandma to live under.

  • Guest

    I beg your pardon for my blog whoring. I thought it was somewhat pertinent to the topic at hand. So I guess you won’t see me here in the future

  • Richard Taylor

    This is a post I wrote this morning at my sucky little blog (cross posted to Firedoglake’s MyFDL)

    http://dakine01.blogspot.com/2013/01/todays-anti-social-security-propaganda.html

  • perljammer

    Before I get into the numbers, understand that I have no problem with eliminating the FICA cap. It would cost me a bit of money every year, but it would be worth it to ensure the viability of the SSI system.

    What I’m wondering about is your assertion that the program was designed to cover 90% of the total income in the country. I’ve seen that before, and I’ve always wondered where it came from. These two quotes are from the Social Security Administration:

    “The percentage of workers with earnings above the tax max (“above-max
    earners”) fell from 15 percent in 1975 to about 6 percent in 1983 and
    has remained at that level since.” OK, that makes sense because of growing income disparity.

    “Historically, an average of roughly 83 percent of covered earnings have
    been subject to the payroll tax. In 1983, this figure reached
    90 percent, but it has declined since then. As of 2010, about 86 percent
    of covered earnings fall under the tax max.” This seems to say that the current total income coverage is as high as the historical average.

    More at http://www.ssa.gov/policy/docs/policybriefs/pb2011-02.html

  • http://www.rebeccamorn.com/mind BeccaM

    If we had genuine progressive rather than the weak-kneed Hallelujah choir known as the Congressional Progressive Caucus, the Dems would be demanding a lifting or removal of the FICA contribution cap (as regressive a tax as it now stand as there ever was) and a switch not to chained-CPI but to CPI-e (variously described as ‘experimental’ or ‘elderly’).

    CPI-e is a measure of inflation as actually experienced by senior citizens. So this means factors like medical and prescription costs are factored in — and yes, this is is the biggest contributor to an experience inflation rate decidedly higher than the rest of us. Also utilities — which for most depend on fossil fuels, so again, higher and more volatile than the base (deliberately low-balled rate). And it doesn’t resort to chained-CPI trickery like assuming because meats are going through the roof due to droughts that gramma can switch from porterhouse and t-bones to chicken — because in all likelihood, if she was depending on Social Security income alone, she wasn’t buying much beef anyway.

    The Tea Baggers got rid of their GOP moderates. If the Dems want to counter that and the new GOP extremism, it’s the neo-liberals and conservatives who need to be shown the door. Using the metaphor I’ve employed before: It’s like one party is offering complete evisceration, while the other says we have to pick them because they’ll only do multiple anaesthetic-free amputations.

    Lesser Evilism, folks. This is what so many said must be voted for.

  • nicho

    It doesn’t even have to be eliminated. It just needs to be adjusted to that FICA taxes covers 90% of the total income in the country — as the program was designed to do. The problem is the growing inequality of income. As the upper 10 percent get a bigger and bigger share of income, the taxes now cover less than 80 percent of national income. Just a tiny little adjustment, and everything would be back on track.

  • Guest

    Why is it so hard to get a consensus behind just removing the FICA cap? Hell, I benefit from it, and I’m willing to give it up for the sake of predictable social security benefits.

  • Ford Prefect

    Good piece, GP. And yeah, Schumer’s lying, per usual. New Yorkers ought to brand these people with their trial balloons and turn them into anvils.

  • Ford Prefect

    Never. They want to make grandma live under a bridge. Eliminating the cap would prevent that.

  • Naja pallida

    We’ve been screaming frog in boiling water for years, and keep getting told that we’re just asking for too much and being too partisan.

  • citizen_spot

    “Schumer’s office does not support the idea of fast-tracking
    Medicare cuts or the chained-CPI formula for Social Security through a
    budget resolution,”

    OK, so they won’t “fast track” cuts, but will try and sneak them in a little at a time. Gee, thanks new dem arseholes.

  • NCMan

    Judas Priest…. when is some politician just going to come right out and FORCEFULLY say that the FICA cap should be eliminated making Soc Sec fiscally sound forever thus taking future talk about Soc Sec OFF THE TABLE.

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