Social Security benefit cuts are in Obama’s budget. It’s official. Barack Obama, he of the Hope and the Change, is putting benefit cuts in his next budget proposal, due for release next Wednesday, April 10. (If you were hoping he’d change, he won’t; he’s always been this guy.)
Here are a couple of things to know about this amazing Democratic budget proposal.
The benefit cuts news — the bad and the good
Washington Post (this is the bad news; my emphasis):
Obama budget would cut entitlements in exchange for tax increases
President Obama will release a budget next week that proposes significant cuts to Medicare and Social Security and fewer tax hikes than in the past, a conciliatory approach that he hopes will convince Republicans to sign onto a grand bargain that would curb government borrowing and replace deep spending cuts that took effect March 1.
Obama will break with the tradition of providing a sweeping vision of his ideal spending priorities, untethered from political realities. Instead, the document will incorporate the compromise offer Obama made to House Speaker John A. Boehner (R-Ohio) last December in the discussions over the “fiscal cliff” – which included $1.8 trillion in deficit reduction through spending cuts and tax increases.
And Boehner’s reaction (this is the good news):
The House speaker, John A. Boehner, on Friday waved aside reports that President Obama would seek a new budget compromise next week, accusing the president of again demanding tax increases in exchange for “modest entitlement savings.”
“If the president believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes,” Mr. Boehner said.
So far, so good. Statement stalemate.
The plan — how Obama wins
According to Sam Seder on the Majority Report (start listening at 24:45 in the clip), the path for Obama’s latest Grand Bargain is through the Senate using budget reconciliation, which takes the filibuster off the table. Then it goes to the House, where only a small number of Republicans are needed to pass if most Democrats vote for it.
This is Obama’s best shot this round. Get Reid to get it through the Senate (assuming he wants to) with 51 votes. Get 50 Republicans (out of more than 200) to pass it along with a majority of Dems (out of exactly 200). Needed to pass: 218 votes. I hear the motors starting — tickets on Dennis Kucinich’s Plane Ride will be available soon.
You know what to do. Senate phone numbers here. House phone numbers here. Tell them they will lose their jobs if they vote against Social Security and Medicare. Tell them Obama will get Clinton money for life while they’re scuffing K Street carpet and cashing think-shop checks. Bad trade for them.
Everyone in the House is up every two years. These are the Senate Democrats up for re-election in 2014:
Senate Democratic class of 2014
|Last Name||First Name||State||Party||Phone||Class|
The Senate class of 2016 should be looking over its shoulder as well, as should any 2014 Republican facing a tight race (I haven’t checked to see who’s vulnerable, if anyone).
The Rich vs the Rest — Obama edition
This is the Democratic Party and its neoliberal owners playing their version of the Rich vs. the Rest. How does that apply to Obama’s budget proposal? Credit Dean Baker with the telling detail (my emphasis):
Social Security is about 70 percent of the income of a typical retiree. Since President Obama’s proposal would lead to a 3 percent cut in Social Security benefits, it would reduce the income of the typical retiree by more than 2.0 percent, more than three times the size of the hit from the tax increase to the wealthy.
And he offers a nice chart:
The taller the bar, the bigger the hit. The first bar is the Social Security hit to seniors. The second is the tax hit to a $500,000/year family. Obama’s priorities in one handy graph.
Need more? Yves Smith at Naked Capitalism (my emphasis and some reparagraphing):
Now It’s Official: Obama Sells Catfood Futures, Um, Social Security and Medicare Cuts
There is no more pretense possible. As we’ve warned for some time, Obama is eager to put a notch on his belt by being the President that rolled back the New Deal programs that helped create broad-based middle-class prosperity and dignity.
He’s cast himself as an adult inflicting discipline on profligate Americans. But in reality, the profligacy was most concentrated among elite financiers who used leverage on leverage vehicles to stoke liquidity that led to worldwide underpricing of risk. They paid themselves record bonuses in the years immediately preceding the crisis, and then in a grotesque display of ingratitude, did so again in 2009, able to do so only thanks to massive taxpayer support, alphabet-soup special borrowing programs, and the tax on savers known as ZIRP.
And the direct result of their looting exercise that produced the crisis was the explosion in government deficits, due to a collapse in tax revenues and a rise in payments under countercyclical programs such as unemployment insurance and food stamps.
That’s smart-person-speak for:
Obama gave it to the bankers and he’s taking it back from you.
The Obama budget is going to offer “Grand Bargain” cuts in Social Security and Medicare, hoping to get Republicans to offer tax increases.
We are heading into a retirement crisis. The 401K experiment didn’t work. Companies have pulled back on pensions. And the squeeze that has been on regular people for decades means that people also do not have the savings they need to get them through old age.
And all the money went to the top. The last thing the country needs is cuts in essential services for the elderly.
I disagree with the framing; Obama’s doing it because he wants to, all on the merits. But everything else Johnson says is right. When we need it the most, he’s taking it away.
I’ll say again, this will kill people.
Even Class War Kitteh agrees
Class War Kitteh sez:
“If seniors shop the catfood aisle, what aisle can I shop?”
Your bottom line
This feels like one of the big ones. He’s as nakedly anti–Hope & Change as he’s ever been. (Let me clarify; he’s always been anti–Hope & Change on economic issues; he’s never been this naked about it.)
Obama seems absolutely determined to sort Democrats and progressives into Neolib Enablers and Neolib Enemies, with nothing in between. Let’s see how that goes. It could be a plan that works for him, or not. Either way, there will a lot fewer mugs on one side of the progressive fence, and equally fewer wumps on the other side, when all this shakes out.
And that may not be bad.