Give the people what they want

The maths are not my strong suit but this not hard arithmetic. Our national economy is 70% dependent on consumer spending. You know who spends all their money in Murika? Poor people. They don't go anywhere. They don't have offshore accounts to hide their obscene corporate and casino capitalist profits. They spend their money in the local stores. You know -- small businesses. So my dear befuddled Democrats. Listen to Sherrod Brown. When GOPers say cut Social Security, you say screw that. Increase Social Security payments.

Brown argues that if Republicans push for Social Security benefits cuts as part of any deal, Dems should counter with the Harkin proposal to shift the terms of the debate in a Democratic direction. Democratic priorities, he said, should be centered on the idea that declining pensions and wages (and savings) are undermining retirement security, and added that the public strongly opposed gutting social insurance.

“The situation for seniors is only going to get worse, because the assault on pensions and wages is making it more and more difficult for a worker to save for the future,” Brown said. “Why are we having a debate over how much we are going to hurt seniors? The debate should be over how we should structure a pension for seniors that will help them. Why would we play on their playing field? Democrats need to play offense here. Force Republicans to say what it is they really want to do. Republicans just don’t like social insurance.”

All over the "Christian" Nation of Murika, we have old people standing in line at the grocery store counting out loose change at the end of the month to buy a box of biscuit mix to get them through until the next check comes in. The cost of living never goes down. So how are they supposed to live on less money? Seriously, what then? Rooting in the trash bins out back to get enough food to last a month? An extra $50 a month would make a big difference.

Call me a dreamer but I have a feeling the party that came out strong for giving the real builders of America a few extra bucks, instead of taking it away, would be popular. They might even win all the elections.

Chain of fools

In the interests of my blood pressure, decided long ago to save my outrage for things that are clearly imminent. So I'm not all that exercised about Obama's new budget even though it's said to offer up the chained CPI on Social Security. Matt thinks it's dangerous but it's not scaring me yet. Looks like just another deal that isn't meant to happen.

It's a budget proposal. A political document that has more to do with messaging than policy. I do agree with Charlie Pierce though. Offering up yet another dismal grand bargain with these kind of optics is stupid politics and reinforces the false choices that should belong solely to the Republicans.

This is what Jim DeMint believes, after a few years in a sweet government job, from which he will derive a sweet government pension, and which enabled him to move sweetly into a quasi-governmental job at which he produces nothing at all except hot air. Nice work if you can get it. This is what they all believe. They believe that the problem with Social Security is that...it...works. This is why any economic compromise with these people is guaranteed to hurt all the wrong people.

I'm guessing the White House consultants decided Obama needed to piss off the liberals to appease the Village elders with a show of making tough choices. That may work. Twitter told me E.J. Dionne loved it. But the hundreds of millions of voters who get their news in 30 minutes on the teevee, all they're going to internalize is newscasters very seriously telling them -- again -- Obama wants to cut Social Security. After he and Joe explicitly promised not to touch Social Security. If there's some eleventy dimensional chess strategy here which leads to energizing the Democratic vote in 2014, I'm not seeing it.

Obama schools the GOP

President Obama took a stroll over to the Hill and addressed the House GOPers today. How it went depends on who you ask. The interpretations "according to unnamed sources close to the proceedings" ranged from the Drudge baiting Tense meeting between President Obama, House GOP (broken into 3 page clicks for your inconvenience) to ABC's Jon Karl who heard President Obama got two standing ovations.

Jon Karl had the best report on the questions. This one was the most important:

Rep. Dave Camp of Michigan, the chairman of the tax-writing Ways and Means Committee, asked if Obama and Republicans agreed on some entitlement reforms (specifically, means-testing for Medicare and reducing annual cost-of-living increases for Social Security), why couldn’t those things be done now? The president said he would agree to those reforms only if Republicans agreed to raise tax revenues by closing loopholes, because we have to ask “everybody to sacrifice.”

Wrong answer Mr. President. Adding to my earlier post, this is why Obama's numbers are slipping. Yes, everybody needs to share the sacrifice but the working class has already sacrificed more than enough for the last five years. They don't want Obama to kiss the crackpots' ass for some dismal grand bargain, they want him to kick their ass.

Obama has walked back his tough talk one too many times. I see the future and unless Obama walks his campaign talk this time, I see 2010 happening all over again in 2014.

Why Obama's approval is sinking

I truly hate when the internets make me talk about polling but I've seen this pushed for long enough that it's worth addressing. The usual suspects are harping on their tired refrain about Obama's failure to reach out to GOPers. That's not the reason. Nobody outside the Beltway bubble gives a flying leap about whether Obama makes nice with the crackpots. Rather the opposite. It's because instead of standing firm on the platform he won the election on, he's back to trying to cajole concessions by giving into their demands.

Greg Sargent, in an especially good morning round-up, nails down Obama's real problem in this one graf:

To summarize: People say they agree with the GOP about spending cuts in the abstract. But when you get specific, solid majorities disapprove of the sequester cuts and think they’ll harm the economy — rejecting the conservative argument about the relationship between the economy and spending cuts. Solid majorities oppose replacing the sequester cuts with cuts to major social programs the poor and elderly rely upon — rejecting the conservative argument about the safety net. (In fairness, Obama is also prepared to cut entitlement benefits as part of a grand bargain, but more judiciously.) Solid majorities support asking for more revenues from the rich, rather than cutting social programs, to replace the cuts — rejecting the conservative argument about taxes.

Bold is mine and let's review that sentence again. "In fairness, Obama is also prepared to cut entitlement benefits as part of a grand bargain, but more judiciously."

Judicious or not, this is at the core of Obama's sinking approval. It breaks a very specific promise he made on the campaign trail. I would go as far as to say it was the most important promise he made. The mainly unengaged voters aren't following the nuance. They don't care about grand bargains. All they hear is "Social Security cuts" and all they feel is betrayed in their trust.

Saving Social Security

Scissors wielding austerity addicts have been circling around the social safety net like vultures at a garbage dump for years now. They're salivating at the opportunity to use the deficit to shred the social contract made decades ago with the working people. They want that pot of money and they're more than willing to lie about earned benefits to get their grubby claws on it. But the truth is, Social Security is not a driver of debt. Indeed, "Social Security can be financially tweaked by changing its tax or benefit structure, or both," and deliver full benefits for many years to come.

Yet the austerity addicts drive the conversation. Even President Obama, who promised not to touch the program, offers up shady cuts in his futile search for a ill-advised grand bargain. Surprisingly, the very conservative Josh Barro comes forward to say don't cut SS:

Back in December, I wrote that applying chained CPI to Social Security is the wrong solution to our budget problems: It’s just a way of dressing up a cut to retirement benefits at a time when retirement insecurity is rising. Despite its problems, Social Security is the best-functioning component of the U.S.'s retirement-saving system. Instead of cutting, the federal government should be expanding its role in retirement saving.

Exactly right. GOP has solidified their "cuts only" position on government spending. That very much includes destroying Social Security as we know it. If Democrats were smart they would be pushing for expanding the program instead of adopting the austerity framing on earned benefits.

Sadly, so far few of our Congresscritters have realized how winning a position this is. Bernie Sanders leads the charge to protect the safety net with The Keeping Our Social Security Promises Act.

Under Sanders' legislation, Social Security benefits would be untouched. The system would be fully funded by making the wealthiest Americans pay the same payroll tax already assessed on those with incomes up to $106,800 a year. The idea follows through on a proposal that President Obama made when he was running for office in 2008.

It's a damn shame Bernie doesn't get any attention, from anybody. Neither the establishment progressives nor the netroots left promote his work nearly enough.

No time to cut entitlements

And for the love of all that is holy, please stop calling them entitlements. They're earned benefits dammit. Still, Thomas B. Edsall exposes the stupid in our inane national conversation about starving granny to save the wealthy a few bucks in taxes. There is a simple fix to "save" the programs:

Currently, earned income in excess of $113,700 is entirely exempt from the 6.2 percent payroll tax that funds Social Security benefits (employers pay a matching 6.2 percent). 5.2 percent of working Americans make more than $113,700 a year. Simply by eliminating the payroll tax earnings cap — and thus ending this regressive exemption for the top 5.2 percent of earners — would, according to the Congressional Budget Office, solve the financial crisis facing the Social Security system.

Read it all if you love the maths, but the shorter is Medicare can similarly be made solvent by simply reworking the contribution ratios. And no, raising the starting age for earned benefits is not the answer:

In the case of Social Security, proposals to raise the age of eligibility for full benefits amount to a benefit cut of 6 to 7 percent for every year that eligibility was increased.

Which brings us to why the current conversation is so stupid:

Cutting benefits is frequently discussed in the halls of Congress, in research institutes and by analysts and columnists. The idea of subjecting earned income over $113,000 to the Social Security payroll tax and making the Medicare tax more progressive – steps that would affect only the relatively affluent — is largely missing from the policy conversation.

The Washington cognoscenti are more inclined to discuss two main approaches that are far less costly for the affluent: means-testing of benefits and raising the age of eligibility for Social Security and Medicare. (Sidenote: policy makers and national journalists who weigh in on this issue generally earn more than $113,700 a year.) ...

I'd add most of them are making far in excess of that figure. Also, too:

In this case, the electorate is pointing toward progressive tax increases for those closer to the top far more readily than members of the political class, for whom high-earners are a crucial source of campaign contributions.

Good to see NYT publishing this but must credit Atrios for getting there first.

Tarnished future for golden agers

This column by Duncan Black on bleak prospects for retirees is a longer form version of Atrios' newest hobby horse which might be summed in the shorter as: bail out the people. I've been saying stuff like this myself for a long time now, but nobody listens to me so it's good to see a very popular sucky blogger trot this into the public discourse:

We need an across the board increase in Social Security retirement benefits of 20% or more. We need it to happen right now, even if that means raising taxes on high incomes or removing the salary cap in Social Security taxes.

Read it all, especially if you're younger and are depending on a 401K plan to ensure your comfort in your golden years. Because if you are, you're likely to be disappointed.

Meanwhile, if you're on the cusp of retiring or in that over 55 and lost your job demographic, you're pretty much screwed and apparently invisible to the powers that be. And that's just SS benefits. If you add in the current mania to "fix" Medicare by foisting the costs back onto the olds, you're probably going to face an early death.

Which as Matty Yglesias points out is a great cost saving scheme:

… It really can’t be emphasized enough that this is the precise inverse of the entitlements problem. Failure to provide adequate social services to unemployed 61-year-olds not only saves money because you don’t need to pay for the benefits, it saves even more money when it leads to that guy dying at 71 rather than 74. To some, those are three extra years to spend with your grandkids. But to the Congressional Budget Office, that’s just more Social Security checks and more Medicare bills.

Oddly, I was just thinking the other day, this austerity fixation (being perpetrated mainly by millionaires) is the modern day equivalent of throwing us olds onto ice floes and sending us out to sea. As the kids say, sure looks like a feature, not a bug.

[photo via]

Interesting question

A similar question could be asked of nearly every single person sitting on Capitol Hill.

[graphic via]

Nearly all of them accrue significant nest eggs while they're in office and they leave their political careers with secure lifetime benefits far beyond what ordinary working people could even imagine. Pretty easy to then call for painful cuts to what were supposed to be guaranteed benefits to the people who paid for them over a lifetime when they aren't the ones who are going to feel the pain.

For Paul Ryan, it's about individualism vs. collectivism

This is a bit too obscure to make a noticeable difference in the campaign, but illuminating. A Catholic website delves into an old speech by Paul Ryan where he makes his disdain for Medicare and Social Security explicit:

This isn’t from a secret video, it’s from the untranscribed portion of Ryan’s 2005 speech at the Atlas Society’s “Celebration of Ayn Rand.” It fits well with the Romney video because it makes clear that middle class entitlements, “so called defined benefit programs” such as Social Security and Medicare ARE an explicit strategic target because they are collectivistic, socialistic and foster dependency.

The speech has been hidden in plain sight on the Atlas Society website, which offers only apartial transcript. This omits several revealing passages that illuminate Ryan’s philosophy as it relates to policy priorities.

Ryan describes Social Security and Medicare as “collectivist” and “socialistic.”

Ryan’s strategic plan: privatize Social Security and Medicare in order to convert people from “collectivism” to believers in a “capitalistic individualistic” philosophy. So that there will be “more people on our team” who “won’t listen to” Democrats.

This isn't new policy for Ryan. His Roadmap to Middleclass Ruin is riddled with more oblique references to the same thing. Nothing surprising here except how well he's managed to delude the elderly into thinking he intends to protect the program.

[More posts daily at the Detroit News.]

Republicans target wealthy food stamp recipients

In today's episode of stupid political theater, the Republicans are proving their populist cred by going after shiftless millionaires who collect food stamps and unemployment benefits.

Under the Republican bill to extend a payroll tax holiday scheduled to be voted on in the House as early as Tuesday, those Americans with gross adjusted income over $1 million would no longer be eligible for food stamps or jobless pay, producing $20 million in savings to help pay for the tax cut for American workers. The idea is also embraced by many Democrats, who had a similar version of the savings in a Senate bill to extend the payroll tax cut, as did a failed Republican Senate bill.

As is rightly being pointed on the internets, the number of millionaires engaged in collecting this sort of welfare is negligible. The big bucks handouts to the super-wealthy can be found elsewhere.

Each year, the federal government hands approximately $10 billion over to the richest 1% of Americans — mainly to rich retirees — according to an IBD analysis of data on various federal transfer programs.

Using IRS data, IBD found that the top 1% of income earners claimed approximately $7 billion in Social Security benefits in 2009. That year, the program paid super-rich seniors — those with adjusted gross incomes exceeding $10 million — an average of $33,000 each.

According to the latest figures, the average Social Security beneficiary collects $14,124 annually. The other big money bite is for health care.

Medicare, meanwhile, paid roughly $2.6 billion in health care subsidies for the richest 1% of enrollees...

One might think these people already have gold plated health care insurance so I wonder how that works. Do these Medicare payments function as a undercover subsidy to the insurance companies, where they pick up the after Medicare costs? Also more generally, certain studies find that because of the way Medicare is financed, this so-called entitlement leads to "net transfers from the poor to the wealthy" since "the rich tend to live longer than the poor."

Clearly, the only way to fix this is to give the super-wealthy more tax breaks.

Solving the wrong problem

Via Jay Ackroyd, the ever increasingly shrill Doctor Krugman diagnoses the problem:

Has market turmoil left you feeling afraid? Well, it should. Clearly, the economic crisis that began in 2008 is by no means over.

But there's another emotion you should feel: anger. For what we're seeing now is what happens when influential people exploit a crisis rather than try to solve it. [...]


What the market was saying - almost shouting - was, "We're not worried about the deficit! We're worried about the weak economy!" For a weak economy means both low interest rates and a lack of business opportunities, which, in turn, means that government bonds become an attractive investment even at very low yields. If the downgrade of U.S. debt had any effect at all, it was to reinforce fears of austerity policies that will make the economy even weaker. [...]

What would a real response to our problems involve? First of all, it would involve more, not less, government spending for the time being - with mass unemployment and incredibly low borrowing costs, we should be rebuilding our schools, our roads, our water systems and more. It would involve aggressive moves to reduce household debt via mortgage forgiveness and refinancing. And it would involve an all-out effort by the Federal Reserve to get the economy moving, with the deliberate goal of generating higher inflation to help alleviate debt problems.

The usual suspects will, of course, denounce such ideas as irresponsible. But you know what's really irresponsible? Hijacking the debate over a crisis to push for the same things you were advocating before the crisis, and letting the economy continue to bleed.

It's always about sparing the investor class any pain and letting them "keep more of their own money" by eliminating those horribly costly social service programs that make up for some of the exploitation of the ever growing working poor class by the owners. Our society is so sick now. The greedy cretins have multiplied like cockroaches. Mass extinction may be the only answer. Worth a read in full.

[More posts daily at the Detroit News.]

Saving Social Security

This is a bit of heartening news. Greg tells us House progressives sent a sternly worded letter to Obama suggesting he use the SOTU to declare support for protecting Social Security.

The letter, which was sent over by a source, represents the clearest shot across the bow yet from House Dems on Social Security, and suggests that the left is gearing up for a big fight in the event that Obama signals openness to cuts to the program, as some expect him to do.

In the letter, Congressional Progressive Caucus co-chairs Raul Grijalva and Keith Ellison, along with 31 other Dems, argue that Obama has a unique opportunity to frame the issue by positioning himself as the keeper of the "promise of Social Security." They ask him to place himself in opposition to "radical" Republicans who are hell-bent on dismantling the program, and request a meeting to discuss how Obama and Dems will handle the issue in the 112th Congress.

Damn straight. If the Democratic Party doesn't stand for fully protecting a program they fought to enact and to preserve for all these decades, then they stand for nothing. Social Security is the signature accomplishment in the history of the party. The storm of lefty criticism over his real and perceived policy mistakes over the last two years will look like a gentle rain shower compared to the tsunami of discontent that will roar across the land if he caves even a little into the right wing narrative on this issue.

[More posts daily at the Detroit News.]