How Obama’s budget threatens Social Security, Medicare & Medicaid

In the wake of the news that, this coming Wednesday, a Democratic president will make the rollback of social insurance a key aspect of his budget policy, I feel a reminder is in order. The headline benefit cut is Chained CPI, a cut to Social Security. But if I was right when I wrote this …

The second piece Obama wants is to shrink the social insurance safety net. He’s wanted this since forever anyway, since at least 2006 by my count, when he was one of Wall Street’s favorite freshman senators (that’s Robert Rubin he’s saying “Hi Bob” to). He’d really like to get at Social Security — his 2011 offer to Boehner included that piece — but recent reaction to that part has made it toxic (thank you, progressives!).

So he’s making a run at Medicare.

… then any cut to any of the big three programs — Social Security, Medicare, Medicaid — will do, will start the FDR-betrayal ball rolling.

Here’s what that looks like in the wake of last week’s news. This is Reid’s reaction to Obama’s budget. Note the threat to Medicare (my emphasis and paragraphing):

Reid, fresh off a phone call with the president, carefully steered clear of answering questions about his reaction to Obama’s reported endorsement of “chained CPI,” a Social Security calculation that would reduce the size of future benefits, on KNPR’s State of Nevada this morning.

Instead, he focused on his willingness “to look at ways we can make Medicare more effective.” But Reid and Obama have agreed for a while that Medicare, the government’s health insurance program for seniors, can be poked and prodded for more savings. They have not, historically, seen eye to eye on proposals to alter Social Security.

Reid looks like he’s a Social Security hero, and good on him for that. If so, prepare for the benefit-cuts ground to shift again, to Medicare.

What counts as a social insurance “benefit cut”?

We are guarding seven borders, each a proxy for all. 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

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

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

Read on for the detail, why each of the above cuts is bad.

Why each of these benefit cuts matters

Here’s the detail on each of these benefit attacks — what each one is, why each is bad.

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, 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. Means-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.


  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.


  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.

Like a fox, Obama is circling all three social insurance programs; if a door to one is closed, he tries another. Our job — recognize that each door above is a proxy for all of them, and guard all seven.

Class War Kitteh on the “Rich and the Rest”

The Rich, lead by their One Percent Hero, are assaulting full-on the weak and the oppressed — the cogs, the cast-off, the castaway old. Class War Kitteh has your back.


You need to have your own back as well. It’s a war, a real one, and no one can sit back. We’re winning — let’s keep it that way.


To follow or send links: @Gaius_Publius

Gaius Publius is a professional writer living on the West Coast of the United States.

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48 Responses to “How Obama’s budget threatens Social Security, Medicare & Medicaid”

  1. Li Fung Wong says:

    The actual fact is we have a “Cart Blanche” Department of Defense budget that is into the Trillions of dollars. Most of it is unnecessary like the hundreds of billions of dollars for munitions and manpower established and directed at American citizens. This includes the massive Homeland Security troops permanently housed in the U.S. None of these proposed cutbacks affect our congressmen, governors, president, etc. They have a different social security system, different medical program. They are exempt from any cutbacks. The fact is they get paid their wages FOR THE REST OF THEIR LIVES!!.
    Tell me where the real cutbacks need to be put in place.

  2. Kim_Kaufman says:

    Alan Greenspan called Bill Clinton his “favorite Republican president.” And Obama is even more to the right. There really is no Dem party of the people any more.

  3. Ford Prefect says:

    That’s the trouble with the apparat’s view of all this: it’s all about campaign ads, phony PR and so on. It has nothing to do with things like, the standard of living or how many people will die from his budget proposal.

    But don’t count those cards until they hatch(pun). Because by 2014 most Americans will want to vomit at the mere mention of “Democrats.” BO’s budget is a net downer for the economy and families will have to take on much larger burdens caring for any elderly or disabled relatives. Those who don’t have families to support them will just suffer terribly so your precious party can write some dickish ads that will mean precisely nothing.

    2014 isn’t going to be all that much fun for Democratic loyalists, methinks.

  4. BeccaM says:


  5. karmanot says:

    I doubt they could raise high enough to crap on your foot, best look under your shoe and you’ll find them scurrying about.

  6. lynchie says:

    there an upvote to counter a down. I do the same thing. engage me with your thoughts but don’t be a coward and simply crap on my foot.

  7. lynchie says:

    Making the deal also filled some offshore bank account as well

  8. lynchie says:

    It is for me. we don’t need dynasties and we don’t need a continuation of

    Clinton/Bush/Obama bad politics

  9. Naja pallida says:

    I’m generally pretty stingy with my up-votes, but I’m happy to up-vote often when someone gets a down-vote with no reasoned response as to why. If you can’t even be bothered to back up your disapproval with actual words, I’m happy to negate your frowny face simply out of spite.

  10. Indigo says:

    That’s a problem.

  11. Indigo says:

    It’s happening as we blog.

  12. karmanot says:

    Most folks hitting seventy already have major medical problems and are unable to work at those ages. Ever try getting a job at fifty in this country? There will be mass suffering as this Obozo die-off plan unfolds. And, we thought ‘death panels’ were farfetched. Who knew—-Sarah Moosebreath was right?

  13. karmanot says:

    “was a bad influence on the mentally deficient,” including down arrow trolls.

  14. karmanot says:

    “Der Shrubbenfuhrer’s” ROTFL That’s even funnier than dummkopfenfuher

  15. Indigo says:

    There’s nothing closeted about it. He’s a Reaganite.

  16. karmanot says:

    Yep, it is a badge of honor!

  17. BeccaM says:

    I sometimes find myself missing Der Shrubbenfuhrer’s general incompetence and inability to enact his radical agenda during his second term.

  18. BeccaM says:

    I feel pretty much the same way, and my outrage meter is pretty near pegged.

    The so-called ‘richest nation on the planet’ and we can’t even guarantee a decent earned-benefit pension and health care for our citizens. Why? Because the plutocratic bastard class covets every penny that isn’t theirs.

  19. BeccaM says:

    Fortunately they don’t seem to count against our total up-votes in the overall tally.

  20. BeccaM says:

    Sorry, but no. You don’t propose what you don’t want. Obama’s been on the record since the early 2000s as being in favor of unraveling the New Deal. He only changes his tune when it’s time to run for election because he’s savvy enough to know that dog won’t hunt.

    Why else do you think he keeps using the phrase “balanced approach”? The whole point is the rich giving up a few easily replaced tax loopholes for show in exchange for the rest of us living the George Carlin prophecy, “They’re coming for your money.”

    This is the neo-liberal corporatist agenda.

  21. ezpz says:

    You beat me to it.

  22. nicho says:

    I welcome the downvotes from the Obamabots. I revel in them. Thanks. Any day I can piss off an Obamabot is a good day.

  23. ezpz says:

    “Where in this discussion is a move to let Medicare negotiate drug prices….”

    Obama killed it behind closed doors.

    Jon Walker:

    Direct Medicare drug price negotiations

    Passing direct Medicare drug price negotiation was a huge campaign point for Democrats in 2006 and for Obama in 2008. Yet, during the health care reform fight, which would have been the prefect time to pass it, the provision disappeared.

    In fact, Obama made a secret deal with the drug companies in which he promised to actively fight against allowing this core campaign promise from becoming law. The administration’s diligent efforts to kill drug re-importation, another promise broken by the secret deal, shows how open Obama was to violating his campaign promises to keep PhRMA happy.

  24. karmanot says:

    Nancy Pelosi is driving this one herself, all the way to the bank.

  25. karmanot says:

    What bullshit. Wake up. Do you seriously think Obama is still playing some 11ty dimensional chess? Sequester anyone?

  26. Naja pallida says:

    Obama could have cut and paste the Ryan budget, and the Republicans would vote against it without even bothering to read it. It didn’t matter what he proposed, they already collectively decided that they were against it in 2008.

  27. karmanot says:

    Yep, a vulture to replace a carrion buzzard.

  28. karmanot says:

    Obama will become even more hated than little moron Bush.

  29. Dameocrat says:

    He is a closet republican. He can’t tell the difference between social security and welfare. He calls social security an entitlement, when people pay into it. On John Stewart he said it was only created for widows and orphans. He propagates pure republican propaganda on this. This is true of Aid to families with dependent children, but not social security.

    I can’t stomach him anymore. I can’t stomach any dlc/new democrat/rubinist, and I won’t vote for them, not even if they win the primary.

  30. karmanot says:

    Thatcher died………thirty years too late in my book.

  31. lynchie says:

    No we still have Hillary waiting in the wings to bring back Thatcher.

  32. lynchie says:

    Don’t be so sure Dems will vote against. I have heard little dissension. This is the typical Obot response another of is 11 dimension chess. He has proposed this from the start. Look at what else he has done and all voted yes by Dems.

  33. lynchie says:

    Found this nice list of Obama’s accomplishments at BoingBoing. I had forgotten quite a few.

    This list along with Medicare and SS puts his Presidency in perspective.

  34. condew says:

    The thing about all this talk of cuts to earned benefits is that somehow the Federal government found the money to fight 2 wars, and to bail out Wall Street and the bankers, and never counted the cost; but to spend about 3% of what we give to bankers so that seniors can retire with peace of mind and dignity, that’s a bridge too far.

  35. condew says:

    You can actually say this while the sequester is still claiming new victims?

  36. condew says:

    Where in this discussion is a move to let Medicare negotiate drug prices. It seems disingenuous to talk about cuts to benefits until the obvious cost savings have been enacted.

  37. PhilSimms says:

    I wouldn’t get too worked up. Obama’s budget was/is DOA…it was designed to be that way for a reason. Republicans can vote for it if they wish and Democrats against it and then Republicans will be on record for trying to cut Social Security, raise taxes and the worst sin of all by a Republican – agree with Obama. The 2014 political ads will write themselves for Democrats.

  38. condew says:

    Never let the press forget that MediCAID is what pays for most seniors in retirement homes after their own life savings is exhausted. The home my dad was in charged him $12,000.00/month until his savings was exhausted, so very few should be confident that they have enough savings.

  39. Indigo says:

    Dear Mr. President,
    There goes your legacy. You will be known as the first Reaganite Democrat in the White House. With any luck at all in the future, you will have been the only one.
    -No more!

  40. lynchie says:

    That is just a smoke screen. Many of the so called progressives have what they want–some access. After Obama we have the rebirth of Thatcher in Clinton who is more of a republican than either Obama or fellatio boy. That we are even talking about the potential for the next President is frightening in itself. We are 4 years from an election and the press is acting like she is being crowned already. She has done nothing as a Senator or as Secretary of State. She stayed true to Bill because it was about her shot at power and position and as President he had both at the time. Now she feels it is her turn to fill the offshore bank account. We had better all get used to working to 70 or 75 because the 1% as an insatiable appetite for our money and will stop at nothing to get it.

  41. nicho says:

    Unfortunately, they don’t care — as long as they have their private jets, their houses in The Hamptons, and servants to cater to their every wish.

  42. nicho says:

    Yup — she destroyed untold lives and she was a bad influence on the mentally deficient Ronald Reagan.

  43. slideguy says:

    Thatcher may be dead, but Thatcherism is alive and well.

  44. HolyMoly says:

    I guess the Republicans were right…Obama IS a Manchurian candidate. Except he’s the kind they actually like!

    Like the old saying goes: “No one knows the Bible better than the devil himself.” The Constitution is steadily being trashed by none other than a constitutional scholar (indefinite detention, Guantanamo — which he SAID he was going to close, warrantless eavesdropping, extrajudicial killings, etc.). And now the social safety net is being put on the chopping block by none other than a common man who pulled himself up by his bootstraps.

  45. Children depend on medicaid. I was on it when I was with my birthmom and in foster care.

  46. nicho says:

    Meanwhile, Maggie Thatcher is finally burning in hell. About time.

  47. nicho says:

    But the other guy was worse — or something.

  48. Drew2u says:

    Sort of like the Sequester and Post office.
    “Well the law is in place so there’s nothing we can do but work with it and enact laws that support that particular slow-bleed. It’s not like we can vote to stop the bleed or anything.”
    It’s infuriating listening to Progressive voices getting on air and saying, “Well, there’s nothing we can do about it.”
    So much for fighting, eh?

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