This needs to be said...

[Jeff In Milwaukee]

While DU goes through one of its typical Grand Mal Freak-Outs (TM) over chained CPI, this might be a good time to hear some alternative opinion. This was a link in another thread but it deserves a thread of its own.

Chained CPI is NOT a Cut to Social Security

There is a big freakout over a possible fiscal cliff deal including the use of something called "chained CPI" to calculate increases in Social Security benefits. Go to Huffington Post, Daily Kos or another "liberal" blog and you will see people who never supported the president in the first place but nonetheless claim to be his "base" lamenting over what a backstabber he is.

The president, as part of the fiscal cliff negotiation offers and counteroffers, has apparently opened the possibility of slightly adjusting the way cost of living increases are calculated for Social Security, by tying it (and all other government accounting) to a "chained CPI" model, a more accurate measure of inflation that accounts for the idea (and fact) that consumers often replace an item with increasing prices with a less expensive substitute. Apparently, this set off more alarm bells on the Left's media than Pearl Harbor. But as with most hair-on-fire freakouts, there is less here than meets the eye.

**************

But but but... won't this still reduce the total lifetime benefit of a senior? Yes, insofar as each additional year lived is an increase in one's lifetime benefits. The only way you can honestly term the Chained CPI measure a "cut" is if you are willing to also make the case that every additional year lived is an "increase" in benefits. Which of our beloved defenders of Social Security would like to make this case to seniors, please step forward.

Chained CPI is not a cut in baseline benefits in Social Security. Even Paul Krugman - the Professional Left's greatest self-proclaimed bearded professor - admits that initial benefits are determined by one's earnings, but that chained CPI would reduce the rate of growth of those benefits by about 0.3%. For every "progressive" who believes that such slowing of the rate of growth is a "benefit cut," I would like them also to step forward and with a straight face, tell me that cutting the rate of growth of defense spending is a "cut" in defense spending. If you think you're a liberal, go ahead and try to say that. Out loud. With a straight face. You can't do it, can you?

Bolding is added by me. Other sources on this subject include:

The Center for American Progress

Center for Budget and Policy Priorities

Could we please refrain from demanding the head of Barack Obama on a platter until we hear all the details?

[MannyGoldstein]

1. If bologna gets too expensive, I can buy cat food instead

Seems reasonable.

[Jeff In Milwaukee]

4. No....

If one brand of bologna gets too expensive, you but a less-expensive brand.

And since you didn't read the whole article, there's a carve out to exempt elderly persons nearest the poverty line.

[MannyGoldstein]

7. It's a 10% cut after 20 years

It's a deep cut, with a fancy name.

[Jeff In Milwaukee]

14. Two things

The first is that it doesn't effect the most vulnerable seniors. People like me would notice it, because it would be a thousand bucks or so that (when I'm ninety) I won't have to pay taxes on. If Social Security is your only source of income in retirement, there are no changes.

The second thing is that CPI is used to calculate a host of tax-related threshholds, most of which are directed at higher-income earners. A switch to Chained CPI would result in a billion dollars in additional revenue with out having to change tax rates at all.

So to summarize: Most vulnerable seniors feel no effects. Social Security is financially sound in perpetuity (ending the "Let's Privatize Social Security" chorus from the GOP. A billion in additional tax revenues the Grover Norquist can't stop.

[heaven05]

42. reason

at last! thank you.

[Jeff In Milwaukee]

45. I promise I won't do it again....

And thank you.

[heaven05]

50. lol

[1StrongBlackMan]

102. You do realize that ...

none of what you have written will penetrate, right?

First you will get a bunch of "arguments" against what you've written; then, you will get a bunch of declarative statement, e.g., "It's a cut; and finally, what you've written will be completely ignored.

[Whisp]

159. it will be ignored by many because dammit, Jim...

Obama is up to evil, I tell ya! At this moment he is canning Obama brand cat food in a Chinese factory so he can fit in that corporate stooge/whore thing he has been so dedicated to.

oiy.

[1StrongBlackMan]

161. Sad; but ...

true.

[marble falls]

51. Thank you for the links and explanations, all the lather over this seemed out of ......

proportion but I couldn't suss it out why. I'm going on SS this next year and I couldn't figure out why CPI wasn't worrying me enough. Thanks again.

[mac56]

59. this

[midnight]

64. Jeff can you site the source for your facts.... I would love to know who says the most

vulnerable seniors will not be touched? And a switch to CPI gives a billion dollars in additional revenue without a change to tax rates at all?

I just don't see why any tool should be used to take money from social security... It was a entitlement program that was already paid for by the working people.... You even summarize that SS is financial sound...

[Jeff In Milwaukee]

72. I don't have something direct from the White House...

like a press release of anything (I'm sure Googling will find it). But here's this:

"It’s possible to exempt the particularly needy. The Obama administration’s proposal is fairly similar to an idea described by the Center for Budget and Policy Priorities in February of 2012, exempting older Americans and those receiving disability payments from the new method of calculating the cost of living."

Quartz

As the quote mentions, the like above to the Center for Budget and Policy Priorities spells out the exemptions.

[MannyGoldstein]

75. "It’s possible to exempt the particularly needy."

Sounds like a done deal.

[1StrongBlackMan]

106. Here ya go ...

MR. CARNEY: -- part of his -- if I could please answer Sam’s question, I’d appreciate it. And the President did include it in his counterproposal, his counteroffer, as part of this process, as part of the negotiation process. I would note that this is a technical change -- would be if instated -- to the way that economists calculate inflation, and it would affect every program that has -- that uses the CPI in its calculations. And so it’s not directed at one particular program; it would affect every program that uses CPI. There are also -- as part of the President’s proposals, he would make sure that the most vulnerable were exempted out from this change.

http://www.whitehouse.gov/the-press-office/2012/12/18/press-briefing-press-secretary-jay-carney-12182012

[malibea]

164. Thanks for the article.

Thank you for the research and the article- for those who care to read it. Unfortunately, there are some that just wish to take the bull by the horns, take someone else's word for it and go off half-cocked!

[1StrongBlackMan]

165. Yep ...

It amazes me ... the same people attacking 2nd Amender for leaving out the "Well regulated militia" part, are hair on fair about Chained CPI, while leaving out the "protections for the elderly and exemptions for the vulnerable" part.

I wonder why?

[midnight]

175. Ok... I thought you might of read something you were directly referring too...

[Whisp]

160. good thing Rach and Ed and Tweetarse were all over this inconvenient truth!

maybe they were, I don't watch them any more.

[bhikkhu]

112. So, essentially, chained-CPI works like a means test, then

Which has been argued back and forth for years. Personally, I think its a great idea!

[CrispyQ]

124. Why do seniors have to take a cut at all?

So we're ok with asking seniors to take cuts in SS, which doesn't even affect the deficit, so that we don't "have to change tax rates at all?" Yeah, I can see why so many DUers are behind the prez on this . . . NOT.


FactCheck Gets It Wrong on Social Security and the Deficit

http://www.cepr.net/index.php/blogs/cepr-blog/factcheck-gets-it-wrong-on-social-security-and-the-deficit

snip...

This point should be pretty straightforward. Under the law, Social Security is financed by a designated tax, the 12.4 percent payroll that workers pay on their first $107,000 of income each year. The money raised through this tax is used to pay benefits. Any surplus is used to buy U.S. government bonds. All funding for the program comes either from this tax or from the bonds held by the program’s trust fund. (The Social Security system is also is credited with a portion of the income tax paid on Social Security benefits.)

Social Security is prohibited from spending any money beyond what it has in its trust fund. This means that it cannot lawfully contribute to the federal budget deficit, since every penny that it pays out must have come from taxes raised through the program or the interest garnered from the bonds held by the trust fund.

The one exception to this rule is the roughly $120 billion being credited to the Trust Fund in 2011 to offset the lost payroll tax revenue due to the 2 percentage point reduction in the payroll tax. Apart from this special 1-year exception approved by Congress at the end of last year, Social Security is literally prohibited under the law from adding to the deficit.

[midnight]

174. I see this SS cut as an unnecessary move to protect tax cuts too...

[Yavin4]

125. Are You Sure You're in the Right Place?

Your post has reason and logic, not name calling and howls of outrage.

[bornskeptic]

152. Why worry about a 10% cut in 20 years when there will be a 20+% cut in 20 years

under current law when the trust fund is depleted? Actually, chained CPI would probably mean about a 6% cut rather than 10%, and the trust fund would last four or five years longer.

[plethoro]

111. Allegedly done by a Democratic President who has been trifling with Social Security for a while. The

stage is now set. I am sending a summary of your post to my diabetic website to see how they respond to the ridiculous claim that a chained CPI that is the result of the government tracking their move to a "cheaper" baloney is not not a cut. My Maginot Line is cuts to Social Security. I have no intention of letting my wife and myself and the old Alzheimer's residents I attend to get screwed out of their benefits so that a bunch of inverse fascist contractor can direct their new puppet to destroy their means of support.

[Sekhmets Daughter]

47. Bologna is cheaper than cat food.

[MannyGoldstein]

53. Well then, we have something to look forward to

when the feds decide that cat food has become a luxury!

[Sekhmets Daughter]

66. You are being distracted from the real problem....

low wages and fewer people with pensions.

Look, the average SS benefit in 2012 is $1,200 a month....The COLA raise of 1.7% will be an extra $20. if the Chained CPI formula was used instead the COLA raise would be $15. 0.3% of one percent. If someone only has SS for their retirement income, the Chained CPI will not be used for them. If someone has a pension (or investment income) as well as their SS benefit, the $5.00 won't kill them and certainly will not reduce them to eating cat food.

All the horrendous numbers used to argue against the switch to the Chained CPI are based on people who have always paid the maximum FICA taxes and have worked until full retirement age. Most Americans do not pay the full FICA tax and are not eligible for maximum benefits. I read recently that 70% of current retirees began collecting SS at age 62. To date 51% of Baby Boomers eligible have begun to collect at age 62 with a 20% lower benefit. It is not as bad as you think.

[1StrongBlackMan]

107. That's because ...

low wages and fewer people with pensions doesn't allow him to rage over President Obama.

[Sekhmets Daughter]

132. Got it....

That's his regular MO is it?

[1StrongBlackMan]

135. From my decidely ...

unscientific observation ... Hell Ya!

[Sekhmets Daughter]

137. He's not alone....

Sometimes when I come to DU I think I have wandered into Freeperville or TeaPartyNation. It's sad that so many are willing to become hysterical without looking at the facts.

[1StrongBlackMan]

140. I know what you mean ...

The other day, on my morning commute, I was listening to The Garrett Lewis AM Talk Radio Show (he wayyy farther to the right than beck and limbaugh combined) and he used a particular phrase in attacking President Obama (I don't recall what it was); but imagine my surprise, when I read that exact phrasing in an attack on President Obama, here on DU!

And when I responded to the DUer that he had used Lewis' exact phrasing, he called my response an ad homiem attack. Go figure ... facts are an attack.

[Sekhmets Daughter]

142. Lately,

I've been spending less time here. I'm retired and have plenty of free time, but I find the constant sniping and silliness tiring. I now pop in and out, usually to check for replies to my increasingly rare posts.

[malibea]

166. Looking to leap!

I call it "looking to leap"! Some people can't wait to complain, bitch, moan, blame. etc. It is like a self-fulfilling prophecy: "I knew it was going to happen; I told you so!" It is sickening and so petty. I have closed down from the DU site several times in the last few days because of behaviors I just mentioned.

I was tired of reading the "negatively drawn conclusions" that "I knew it" and "I should have listened to.... who told me not to vote for this President"! It is as if they can't wait to surmise that whatever this President will do will negatively affect them. It is just a matter of time-but it definitely will happen.

My mother, who is now deceased, and I used to have a saying and it was "don't burn bread of them so soon". I don't know where or whom the saying developed, but we both knew that it meant to give the person a chance before deciding that they had done wrong.

I don't know what else to say except I am so sick and tired of the negativity and "Leaping to negative conclusions" some of the people here on DU have done. It is indeed pitiful, so say the least. I wonder how they can be this negative and sustain life at all! Oh Boy.

[Sekhmets Daughter]

170. Yes,

some people actually enjoy being angry. My mother was like that and my ex-husband as well. They were never so happy as when they were miserable.

[malibea]

171. I note you described as "ex!

As the saying goes, they are "ex" for a reason! Can't say nothing about Mom; I love all Moms. They are angels in disguise.

[Sekhmets Daughter]

172. Exactly.

What I never realized, until years later, is that we all tend to marry our mothers.

[malibea]

173. Forgive yourself, it's the only thing (person) you know!

Listen sweetheart, we learn very well- and who else is there to learn from? And, we always hold onto the slimest hope that there is a chance that "something" will be different with the one we chose? As they say, we can always HOPE!

But guess what, they NEVER change; and sometimes given the time allowed, they are WORSE!

[Beacool]

139. Good one.

[GeorgeGist]

2. Straight face ...

a cut in SS spending is a cut in benefits!

[Jeff In Milwaukee]

6. So the Tea Partiers are right then...

Cutting the rate of growth in the Defense Budget is harming our military. We've been making this same argument for years (which is why I bolded it) with regard to defense spending. Cutting the rate of growth is NOT a cut to the budget.

Please read the entire post and follow the links to CAP and CBPT.

[MannyGoldstein]

9. It's not harming defense

But it is cuttting it.

[Sekhmets Daughter]

56. You might as well talk to a wall....

you'll find the wall is more open to reality.

[Ineeda]

78. Hyperbole from the Left is still hyperbole.

Fear tactics (as in Catfood Commission) are just as wrong when used by the Left as the Right. AARP, often accused here of being a Rethuglican/RW organization until it's beneficial to quote them as a legitimate source, make a claim that the chained CPI will result in cutting the equivalent of "three months of a senior's food budget". Total BS, unless the senior is spending less than $10 a month on food in twenty years.
Another link (Salon):
http://www.salon.com/2012/12/19/the_progressive_case_for_the_chained_cpi/

This isn't a great thing, but it's also not what the hair-on-fire set is claiming either.

[Sekhmets Daughter]

85. Agreed....

I read the Salon article early this morning. It's a distraction from the real issue of low wages and too many people without pensions or other forms of retirement savings.

[reformist2]

3. Yeah, it's not a cut, it's a 'fix' that just reduces your benefits by 10% thirty years from now!

And I've got a bridge to sell you in...

[AnotherMcIntosh]

8. And, "this will be a one-time fix." "Fix" it once and the greedy bastards who want to privatize SS

will not be back for more.

[reformist2]

18. It's a lie, plain and simple. And to think, they almost got away with it.

It saddens me greatly how many people in this world are paid to tell lies.

[AnotherMcIntosh]

31. "Sad" is a way to describe the situation. I'm sadded by the actions of Durbin who I voted for in

past while having the higest regard for his earlier actions. Now, I perceive him as just one more betrayer whose going to finish up his term before he's rewarded by the super-rich for doing so.

[Jeff In Milwaukee]

37. Really...

Dick Durbin has been in Congress for thirty years. He's always done a good job at representing your values and your interests.

What would make a guy like that suddenly turn around, stab his constituents in the back and "destroy" the signature Democratic program -- one that enjoys broad support from both liberals and conservatives. If it's so inconceivable that he would do such a thing, maybe isn't because he hasn't.

Maybe it's because in your Grand Mal Freak-Out (tm) mode, you're missing some of the important issues.

Please, for the Love of God (tm), follow the links in the OP.

[AnotherMcIntosh]

44. You spend so much time insulting others, how do you find the time for anything else?

How many times have you said, as you have done in this thread, that someone uninformed from failing to take your point of view.

At the very top, for example, in your response to Manny, you wrote "And since you didn't read the whole article, ..." Thats' not the only factually unsupported insult that you've thrown out to him and others.

Quite frankly, you don't want a discussion, you want to throw out bait and, when someone responds to it, reply with insults.

Go talk to yourself.

[Jeff In Milwaukee]

49. I'm sorry if I hurt your feelings...

But it's been suggest (in this very thread) that I advocate forcing senior citizens to eat cat food. So if I seem a little snippy at times, I apologize.

[Sekhmets Daughter]

55. Always assuming you are still alive 30 years from now.

The average SS benefit, this year is $1,200 a month. The COLA increase will be $20. and the Chained CPI increase would be $15.00 if it were in place. The poorest will not be effected. There was no COLA increase at all in 2010 or 2011. In 2012 it was 3.6% and this year it is 1.7% I think all this furor over the COLA is a cunning means of distracting Americans from the very real problem of low wages and lack of private pensions.

[Jeff In Milwaukee]

63. Who's going to be effected?

Me. I have a 401(k) -- not big, mind you, but it's better than a sharp stick in the eye. And I have a small defined benefit pension from a previous employer. By the time I retire (I'm 52 years old now), a portion of my Social Security benefit is going to be taxable.

So since I'm not living exclusively on Social Security (if I were, the benefit wouldn't change) my benefit will be reduced because of Chained CPI. I'm reducing my own benefit, and as I've argued before, I SHOULD get a lower benefit -- or pay more taxes -- because I'm not wholly dependent on Social Security.

I'd rather keep the system on sound financial footing for people who really need it rather than get a larger benefit, one that I'm just going to pay taxes on anyway.

[Sekhmets Daughter]

70. Exactly.

My SS benefit is smaller than my other income. This year the COLA raise will give me an extra $13. a month. If the Chained formula was used my raise would be $10. if they round down or $11 if they round up from $10.94. For the average benefit paid in 2012, the difference
is $5.

[jehop61]

5. Thank you

When I first heard of the proposed change to CPI, I wasn't too concerned. It seemed like a fairly small concession by the President. Then, yesterday, I was on DU and became more and more alarmed. By the end of the day, I was ready to hit someone or something. This a.m., it was great to see your take on this and the thoughts of other progressive outlets. Good to see my initial thoughts were correct. Peace restored here and I'll continue to monitor the process more thoughtfully.

[Jeff In Milwaukee]

10. Chained CPI is not something the Tea Party invented...

I've been reading articles on the subject since the early 1980's. There was a huge amount of discussion back in 1983 and the first "grand bargain" on Social Security. Nothing came of it -- they decide to raise taxes rather than adopt chained CPI.

[gollygee]

11. It assumes people aren't already choosing the least expensive things they can choose

Our economy has been bad for a while now. I think most people who are relying on SS are way past choosing a cheaper version of whatever they might need.

[Tarheel_Dem]

12. Nope. Not gonna do it. Krugman says the world's gonna end, and he is the be all.....

end all, when it comes to economics.

Liberals wonder why they don't do better on the issues? This freakout is the reason. It's irrational, and it's distracting from a very "real" issue, that up until the bloggers went nuts, we seemed to be making some real inroads.

You want to know why the issue of gun control has been put on a backburner so many times? Look around the leftosphere. They were all broken up for a minute about the blood of innocents, but they seem to have recovered even before all the victims are buried. Now they've moved on to the next shiny new object, and the M$M will be in hot pursuit, cuz they don't want to talk about gun control either.

Liberals like the Jill Stein Party, The Roseanne Party, and the Rocky Anderson Party provide cover, and aren't effective because they have the collective attention span of gnat. Wshen the next massacre happens (and it will), like the rest of the country, they'll be looking to the President for answers to the question, "Why didn't you do more"? Ask yourself, how many of the so called journalists who are demanding answers from the president, actually wrote articles or featured the everyday killings in between the last mass murder that caught headlines?

You see how quickly we move on? Here's a suggestion, the next time someone starts out with "this isn't what I voted for Obama for", take that with a HUGE grain of salt, and an eye toward skepticism. Chances are, it's a big fat fib.

[MannyGoldstein]

15. 20 years of continuous capitulation, and here we are

I hope you're enjoying the results.

[Jeff In Milwaukee]

21. Oh grow up...

We've got health care reform, repealed "Don't Ask, Don't Tell," killed Bin Laden, expanded Pell Grants and reformed student loans, increased support for veterans, passed the Lilly Ledbetter Act, etc., etc., etc.

And now we're going to have Social Security on sound financial footing forever -- keeping the privatization jackals at bay in perpetuity.

I'm loving the shit out of these results.

[Cosmocat]

58. Look

You are spot on with BO relative to a host of other things.

He got OBL, he expanded Pell and student loans, passed Lilly Ledbetter ...

I like his reasoned hawkishness on international policy, and I like him overall A LOT.

I also have strongly defended him on the ACA here. It was absolutely the best that could get done.

But, the circumstances with that and this are completely different.

He had right wingers and the media SLAMMING HCR for over a year, death panels, ass holes showing at congressional townhalls to jump down the throats of people who supported it.

He had a dem house that would have done more, but he BARELY got it passed, by reconcilliation in the Senate, where a democrat, Max Baucus, was the guy who was in charge for all intents purposes on it, and was bought YEARS earlier by the health insurance industry.

I have defended this relentlessly here.

So, I am not one of that people want to dismiss as a hater or freakout person, or whatever way they want to dismiss this particular area.

When it comes to THESE discussions, he capitulates too much.

He has gone from a flat statement that we need to return to the Clinton era rates on the top 5% to chipping down on that a lot, and he went from saying no touching to SS to this.

Sorry, I know people want to support him, and I do very strongly.

But, we have seen 30 years now of push back from a progressive system with a solid safety net to this bizarre notion that we need to coddle the rich to make some fantasy job machine that will just naturally take care of everyone. We have seen NO pushback in the direction of supporting our retirement aged folks in this time, and the top tax rate has dropped to record low levels.

What he started with was, as usual, is the place it SHOULD be, and he has negotiated from there down.

I get that, that is how I am. But, he is not dealing with reasonable people.

And, he had more leverage for his position than any politician could possibly have. He was holding a full house, played it like a full house up until the last week or so, now it playing it like he has nothing more than a King high.

He just is too darn prone to capitulating to these deranged assholes, and I am sorry, people are not scumbags for saying it.

[Jeff In Milwaukee]

67. Fair enough...

I'll admit that I'm a deal-maker. I'll put my mother on the table if I'm getting something worthwhile in return (sorry, Mom)

My opinion is that Chained CPI, because of the exemptions for low-income elderly and the bump at age 85, is a deal worth making because it keeps the system sustainable for the long run, and it takes away the GOP's favorite talking point (Social Security is bankrupt, so we need privatize it).

As to the other stuff, I'm still not convinced that going off the cliff and resetting tax rates back to 1999 is the worst thing in the world that could happen. Most of the reversions have a "slow burn" to them, and quick action by Congress to restore the tax breaks for the Middle Class could create a situation where nobody below the $250,000 level would feel the effects.

[1StrongBlackMan]

120. I kind of agree ...

but going over the cliff will have an immediate negative effect on the most vulnerable population amongst us. Going over the cliff will immediately end U/C extensions for the long-term unemployed; immediately end child/after school care subsidies; will immediately end program funding for the homeless and near homeless ... (I didn't think about that until a DUer posted that if we go over the cliff, he/she will be homeless.)

So yes ... most of the cuts can be re-instated before it causes much harm; but some can't ... and those that can't tend to affect the most vulnerable in the community; the group that I thought we as Democrats were supposed to care about most.

[Cosmocat]

157. This is a direct result of the capitulation at the first debt ceiling

You have NEVER had congress hold up the president over the debt ceiling.

They make political hay over it, they scream and grandstand.

But, that is it.

He bent over and took it a year and a half ago, and what he accepted then is what you are now concerned about, the big cuts to people who need it. The Rs, being the jackoffs they are, put them in there because they believed that the Ds would roll over now. THIS is the moment they were targeting when they put these cuts into it.

At some point this shit has to stop.

They held UC over his head to get the Bush tax cuts extended two years ago, and he capitulated.

They are NEVER going to get on the right side of this thing without the Rs putting a big hurt on a lot of people.

At some point, you have to draw the line and let the chips fall where they fall.

We ALL are getting slowly bled by these jackasses, and sorry, when he meets them halfway we lose a little more ground.

[1StrongBlackMan]

158. We've never had ...

this teaparty mob that'll do anything to ensure President Obama won't succeed. There is no doubt that they would have took the U.S. into default.

[Cosmocat]

162. They are jackasses

no doubt about that.

BUT, you just made the point.

They absolutely would drive the country into default.

Then, or the next time, or the next time.

So, you capitulate to them THREE, FOUR times, give ground and allow bad policy to them to keep them from defaulting the country?

You let them off the hook, you damage the country by accepting what they drive you toward AND they beat the shit out of you?

They get to hold the country hostage, get to move the country further in the wrong direction AND still make hay on you.

It is bad policy, bad leadership and bad politics.

It sucks, but they are jackasses who are driving the country in the wrong direction.

You hold ground, and let the chips fall where they fall.

If the people of this country won't hold them accountable for it, then they get what they deserve.

[1StrongBlackMan]

163. That works well ...

for those sitting on their couch pontificating on an internet bulletin board; but not so much in the real world. You're saying allow ... no, encourage ... the hostage-taker to kill the hostage, so that next time he/she won't take a hostage.

I do not want you anywhere near a hostage negotiation.

[Cosmocat]

156. SS is OK for decades

and the reasonable fix is not cutting benefits ...

And, getting chained CPI now isn't going to keep them from continuing to go after it.

At SOME point, the democratic party has to mark its line in the sand with these morons over this stuff and let the chips fall where they fall.

[zipplewrath]

93. Second time in my life

I'm old enought that this is the second time in my life that I've been told that we've "put SS on a sound footing". You'll excuse me if I don't find your declaration any more credible than the last time.

[Jeff In Milwaukee]

97. It secured the system for fifty years

And back then we knew that further changes were going to be necessary for the even longer-term.

I'll grant you, we could put this off for another ten or fifteen years, but if we can get it done now, why not?

[zipplewrath]

147. Thirty

Without checking, it was some time in the 80's. I think it was Reich that was talking about it recently. He said those fixes shoulda worked, but they never realized how badly the middle class would do over the subsequent 30 years.

That is sorta the real lesson here. "forever" is a really long time. Any predictions more than about 20 years out should have an "error band" placed on them because their accuracy decreases with time.

[Jeff In Milwaukee]

151. The past thirty years...

and about twenty years into the future. I wasn't very clear on that. And you're right -- the system would be solvent much long had the economy not been so crappy during the past decade. The solvency debt kept extending farther and farther out during Clinton's second term.

[sheshe2]

101. Thank you Jeff!

The voice of Sanity!

Great article and links.

Lest we forget...PBO inherited this.

The financial crisis of 2007–2008, also known as the global financial crisis and 2008 financial crisis, is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. It resulted in the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. The crisis played a significant role in the failure of key businesses, declines in consumer wealth estimated in trillions of US dollars, and a downturn in economic activity leading to the 2008–2012 global recession and contributing to the European sovereign-debt crisis. The active phase of the crisis, which manifested as a liquidity crisis, can be dated from August 7, 2007 when BNP Paribas terminated withdrawals from three hedge funds citing "a complete evaporation of liquidity".

We are better off now!


Thank you again Jeff.
She



http://en.wikipedia.org/w/index.php?title=Financial_crisis_of_2007%E2%80%932009&redirect=no

[malibea]

167. I love them too!

Thanks Jeff for all of your research, and intent to clarify "things" for some folk who care and try to have all of this stuff make sense.

[Jeff In Milwaukee]

16. Oddly, Krugman is at least ambivalent about this...

He doesn't like it, to be sure. But he's not having a melt down.

"So am I dead set against? No, I’m still agonizing. Very uncomfortable times."

[reformist2]

20. Considering how this proposal came out of nowhere, a freakout is quite appropriate, imo.

[Jeff In Milwaukee]

23. This proposal has been out there for at least thirty years

To be more accurate, economists have been saying for at least thirty years that the current way of calculating benefits increases is out of kilter and that chained CPI is more accurate.

[alcibiades_mystery]

29. Not all economists say chained CPI is more accurate for all classes of people

That's why experiments like CPI-E for elderly people have been looked at closely, and even supported.

Ultimately, the argument about "accuracy" falls flat. It's probably more accurate to have different CPI indexes for different classes of spenders, or at least to carve out seniors and others on fixed incomes and below particular thresholds, who do not have the substitution capacities of the rest of the population, not least because their health care costs are demonstrably different. In those cases, chained CPI is NOT more accurate. It just happens to grow more slowly than CPI-U, which would seem to be the only thing in its favor for some of our neoliberal economists.

[MannyGoldstein]

24. That was two days ago

Might want to see what Krugman wrote yesterday.

[Jeff In Milwaukee]

32. I did...he said no further concessions

And I agree with that.

I'm not saying that this isn't a big far hairy deal. But it's a big far hairy deal that makes sense. We've been fighting the "Social Security is Insolvent! We Need To Privatize It!" war every friggin' two years since 1980. A lower rate of benefit increases saves federal retirement programs (not just Social Security) more than $150 billion over a decade.

The wolf is away from the door. Forever.

That doesn't mean the Republicans won't try to kill Social Security and Medicare, but they've won't have any economic excuse

[MannyGoldstein]

65. "That Old Sick Feeling"

"Here we go again — or so I find myself fearing.

Obama’s fiscal deal offer was already distressing — cuts to Social Security, and a big concession, it turns out, on taxation of dividends, retaining most of the Bush cut (with the benefits flowing overwhelmingly to the top 1 percent). It wasn’t clear that the deal would have gotten nearly enough in return. - Paul Krugman, yesterday

But sure enough, it looks as if Republicans have taken the offer as a sign of weakness, as a starting point from which they can bargain Obama down. Oh, and they’re not giving up at all on the idea of using the debt ceiling for further blackmail.

In other words, all of a sudden it’s feeling a lot like 2011 again, with the president negotiating with himself while the other side enjoys the process."

This is, at best, total capitulation.

There is ZERO need to slash "strengthen" Social Security. The projection alleging that Social Security will only pay 80% of promised benefits starting in 24 years are based on an assumption that our economy will stay permanently bad (Timmy Geithner cooked the numbers, as usual). If it just recovers somewhat, but below what its been for the past 80 years, then it will pay full benefits for as far as has been examined (75 years).

Social Security was already slashed in 1983 because it was "going insolvent". Now your wolf is back at the door for more, it's about to be slashed again. And guess what? This is just the first round of cuts more to come, probably.

[Jeff In Milwaukee]

71. Slashed? Three-tenths of One Percent is a slash?

And (let me repeat) low-income elderly persons and SSI recipients are not effected, and all retirees who reach age 85 receive a bump in benefits. The only people who would feel the effects are people like me -- those who won't be living exclusively on Social Security. I'm fully prepared to give back a few hundred bucks per year if it keeps the system sustainable in perpetuity.

[MannyGoldstein]

73. Three-tenths of one percent. *Per year*.

Do I really need to teach you about compounding? Really?

And gradual cuts from 65 to 85 are OK? Really?

Did you know that people in the bottom half of income distribution live several years less than the top half? The poor are far less likely to make it to 65.

This is awful stuff, and I'm really surprised that you'd invoke Krugman - who thinks the chained CPI is awful - to support the chained CPI.

[Jeff In Milwaukee]

81. Low income elderly are exempt. SSI payments are exempt.

The poorest and most vulnerable don't have any changes. Only people like me, who have other retirement income to the point that my Social Security benefit is taxable, will notice the difference.

[MannyGoldstein]

83. Could you please provide a table or graph showing what the cuts are

By income and by age?

Thanks.

[Jeff In Milwaukee]

92. I don't get invited to White House negotiations

So no, I don't have any graphs to share.

[Jakes Progress]

95. So you don't really know what you're talking about.

It is good of you to admit it.

[Jeff In Milwaukee]

98. Yes. That's exactly what I said.

I've posted multiple links in this thread to credible sources that say there are exemptions for the elderly and for SSI. Follow them if you want. There may even be a graph.

[Jakes Progress]

155. Yep. You posted your opinion.

When asked for evidence to support it, you admitted that you don't get to know what the WH is doing or saying. Good for you. Not many admit they are posting things they don't really know about.

[MannyGoldstein]

138. Quelle Surprise!

C'est la vie.

[One of the 99]

13. Great post nt

[BeyondGeography]

17. Grand mal freak out is a good way to put it

If I make it to 85 and my biggest problem is the $150-$200 less per month that I have coming in via SS because of chained CPI, I'll consider myself lucky.

[Jeff In Milwaukee]

25. It needs to be restated...

The President's proposal excludes SSI benefits (which go to the neediest persons) and when you hit age 85, you'd receive a bump up in benefits, so the impact would be even less than it seems.

[BeyondGeography]

30. Dude, I'll be happy if I'm breathing at 85

So thanks for the additional bit of cheer.

[AnotherMcIntosh]

34. If this is the last and only planned cut to SS, you'll be fine.

If.

[BeyondGeography]

40. Very true

Everything is permanently up for grabs, and it's stressful for everyone.

[malibea]

168. That's a good one!

Bless your heart-and I feel the same way!

We should all be so lucky-isn't the United States the only country with a guaranteed social security benefit plan?

[alcibiades_mystery]

19. I don't see any good reason to switch to chained CPI for Social Security

Perhaps an argument can be made that an across the board switch to chained CPI works for other programs to slow growth, but for Social Security, it doesn't even seem like a more accurate measure. The alternative CPI-E for elderly people seems more accurate in terms of reflecting the

People like Manny are doing 'spit takes" that I'm on their side on this one - Lord knows why. Maybe they have the idea that people like me are 'centrists" or some such, and that they're the only one's who can claim to care for the poor or the elderly or anyone else who needs social benefits. (We twirl our evil mustaches while the super heroes fly to the rescue, a typically simplistic narrative). They are, of course, wrong about that: I support or oppose policies, not people. In this case, the policy is fucking terrible as far as I can tell and we should obviously oppose it.

I'm not clear on why Social Security can't be excluded completely from chained-CPI for COLA calculations. The CPI index for Social Security has been changed a number of times since COLA was first enacted in 1972, and I know of no law that requires Social Security use the same indexing technique as all other federal programs. Especially given the specific qualities of senior spending (better reflected in the experimental CPI-E), it would seem that Social Security should be separate for COLA purposes, even if perhaps chained CPI could be tested in other areas. That Social Security is not linked to the deficit is another reason to carve it out. If the government wants to address some notion that the fund will hit shortfall at some point in the future, and suggest that chained CPI reduces that shortfall by a fourth (from 2% to 1.5% is the numbers I've seen), they should do that in a separate bill. It's irrelevant for the deficit.

In any case, I certainly find persuasive the idea that it is a benefits cut in practice. You can't tell me that a person would have received say $1,812 a month under the current system, but only $1,765 under the new system, then tell me it's not at the very least experienced and perceived as a cut in benefits. The check is smaller than it would have been. Only bizarre sophisms would display that as not a cut.

[AnotherMcIntosh]

35. The "good reason" is to show Republicans the bona fides of Obama who will work with them in their

effort to ultimately privatize SS.

Cuts in SS will not cut the national debt. It's unrelated to the national debt.

[alcibiades_mystery]

90. Well, I said

I don't support o oppose people, but policies. It would be nice if everyone in this discussion had the same good faith.

[ProSense]

22. Krugman: "This is not good; there’s no good policy reason to be doing this..."

<...>

Switching from the regular CPI to the chained CPI doesn’t affect benefits immediately after retirement, which are based on your past earnings.What it does mean is that after retirement your payments grow more slowly, about 0.3 percent each year. So if you retire at 65, your income at 75 would be 3 percent less under this proposal than under current law; at 85 it would be 6 percent less; there’s supposedly a bump-up in benefits for people who make it that far.

This is not good; there’s no good policy reason to be doing this, because the savings won’t have any significant impact on the underlying budget issues. And for many older people it would hurt. Also, the symbolism of a Democratic president cutting Social Security is pretty awful.

http://krugman.blogs.nytimes.com/2012/12/18/the-deal-dilemma/

Here's why the chained CPI makes no sense.
http://www.democraticunderground.com/1251265608

[Jeff In Milwaukee]

27. Self-Referential

When you're trying to prove your point, it would help to not link to other threads that you wrote. Unless you're a Nobel Laureate in Economics and we don't know it.

Krugman is wary of the proposal, but holding off to see the entire deal in its final form. I would suggest that we do the same. This is not to say that we shouldn't contact the White House and elected Democrats and urge them to resist it -- they need to know that any deal on CPI should include significant concessions elsewhere.

[ProSense]

33. Why

"When you're trying to prove your point, it would help to not link to other threads that you wrote. Unless you're a Nobel Laureate in Economics and we don't know it. "

...is my opinion less valid than yours?

"Krugman is wary of the proposal, but holding off to see the entire deal in its final form."

The OP piece misrepresents Krugman's point, which is: "This is not good; there’s no good policy reason to be doing this, because the savings won’t have any significant impact on the underlying budget issues."

Asd for "holding off," here is Krugman's followup post:

Obama’s fiscal deal offer was already distressing — cuts to Social Security, and a big concession, it turns out, on taxation of dividends, retaining most of the Bush cut (with the benefits flowing overwhelmingly to the top 1 percent). It wasn’t clear that the deal would have gotten nearly enough in return.

But sure enough, it looks as if Republicans have taken the offer as a sign of weakness, as a starting point from which they can bargain Obama down. Oh, and they’re not giving up at all on the idea of using the debt ceiling for further blackmail.

http://krugman.blogs.nytimes.com/2012/12/19/that-old-sick-feeling/

[AnotherMcIntosh]

36. x2

[Jeff In Milwaukee]

41. My links go to reputable third party sources

Your links go to....um....you. No offense, but I'm going to listen to the Center for American Progress and the Center for Budget and Policy Priorities before I listen to just about anybody else. These organizations have proven their progressive bona fides more than once. If they're not freaking out over this, then I'm not freaking out over this.

With regard to Krugman's follow-up post, he's simply saying that Obama shouldn't give any more ground. Absent a huge concession on the other side (and monkeys might fly out my butt), I would agree with that.

[ProSense]

43. "I'm going to listen to... the Center for Budget and Policy Priority"

Robert Greenstein

The Chained CPI: A Response to Robert Kuttner

The President’s decision to include, in his latest “fiscal cliff” offer to House Speaker John Boehner, a proposal to use the “chained Consumer Price Index” in calculating both annual cost-of-living adjustments in Social Security and other benefits and annual inflation adjustments to various features of the tax code (such as the incomes at which tax brackets begin and end) is eliciting dismay among many progressives.

At CBPP, we have long been open to such a change if, and only if, the tax savings are devoted entirely to deficit reduction (not to financing other tax cuts) and the benefit change includes protections for poor and very old beneficiaries. The details on the Administration’s proposal are not yet available and, until they are, we’re withholding judgment on it.

<...>

But, the average cut isn’t 3 percent per year. It’s three-tenths of 1 percentage point per year (0.3 percent), according to the Social Security actuaries, or one-tenth what Kuttner assumed. And according to the Congressional Budget Office, the average reduction would be a bit smaller than that — 0.25 percent per year.

To be sure, the benefit loss would cumulate over time; after 20 years, it would represent a benefit cut of about 5 to 6 percent. But, the proposal also appears to include a benefit increase after about 20 years that’s equal to 5 percent of the average Social Security benefit, returning the benefit level at that point to close what it would be under current law. (It would begin to slowly erode again after that.)

In short, this proposal would affect beneficiaries. But the benefit reduction is much smaller than Kuttner portrays it.

- more -

http://www.offthechartsblog.org/the-chained-cpi-a-response-to-robert-kuttner/

Fact: It's a benefit cut.

[Jeff In Milwaukee]

60. Semantics

Your Social Security benefit is established at the time of your retirement. You benefit is then adjusted for inflation over time. Chained CPI is simply an alternative (and based on the consensus among economists, more accurate) way to calculate the rate of inflation.

Look, what we're arguing here is semantics. The dollar amount of your Social Security check will be less under Chained CPI because it calculates a slightly lower rate of inflation.

SSI and benefits for the poorest elderly are excluded from the revision, and when you reach the age of 85, you get a bump in benefits. So who's effected? Seniors not living in poverty -- those who would likely be taxed on their Social Security benefits. When you factor in the reduction in taxes, the decrease is about 0.25%

[ProSense]

69. President Obama Offered More Cuts To Social Security Benefits Than To The Pentagon

President Obama Offered More Cuts To Social Security Benefits Than To The Pentagon
http://www.democraticunderground.com/10022037665

That's not semantics.

This is a bogus and unnecessary policy. Defending it is focused on spin (semantics), justifying why it's the least worse, claiming that it's not a cut, sort of.

There is no explanation as to why this has to be done now, excluding all the other options for strengthening Social Security.

[Jeff In Milwaukee]

76. Because it's the one he can get...

I don't disagree with you. Make me your Emperor, and ALL income would be subject to Social Security taxes. Everything. We'd have a Social Security tax rate of about 3%. And the Defense Budget would be cut by 20% in Year 01.

But I'm not your Emperor. Neither is Obama.

I know you well enough to know that we went through this with Health Care Reform. You know that there's a big difference between what we want and what's achievable. The Republicans still hold the House and (for now) can still obstruct the Senate - so this is what's achievable.

My feeling is that this approach does more good than harm.

[MannyGoldstein]

80. Or because it's non-confrontational and requires no heavy lifting

You don’t have to be a policy wonk to marvel at the political skill L.B.J. wielded to resuscitate a bill that seemed doomed to never get a vote on the floor of either chamber. Southern Democrats were masters at bottling up legislation they hated, particularly bills expanding civil rights for black Americans. Their skills at obstruction were so admired that the newly sworn-in Johnson was firmly counseled by an ally against using the political capital he’d inherited as a result of the assassination on such a hopeless cause.

According to Caro, Johnson responded, “Well, what the hell’s the presidency for?”

- From the NY Times review of ‘The Passage of Power,’ Robert Caro’s New L.B.J. Book

[olegramps]

48. Well, are you Nobel Laureate in Economics.

[Jeff In Milwaukee]

77. Yes. I just don't like to lord it over people.

I'm also a pathological liar.

I don't claim any personal expertise on this matter, but when two organizations with sterling progressive credentials step up and say this is a reasonable approach, I'm willing to listen to them. Note that the CBPP report is from last February -- long before we starting talking about "fiscal cliffs"

[socialindependocrat]

26. If you think everyone should play a part in cutting costs then 0.3% ain't bad

At least we'd still get an increase...

[reformist2]

38. That 0.3% difference eventually leads to a 10% reduction in benefits.

Please get out a calculator and see for yourself.

[socialindependocrat]

52. Sure - over 33 years - by then the number of retirees will reduce and they'll change the calculation

[daleanime]

28. How dare you compare multi-million dollars overages in the defense 'budget'....

to seniors trying to get a hot meal for 1 or 2 dollars. They are so similar.

[Is That All There Is]

88. Most People Know

that the deep cuts to the defense budget will be mostly balanced on the backs of the young Enlisted Troops whose pay and benefits already make them eligible for Food Stamps and Welfare. So yes there are some common points of interest, mainly protecting those who need it most.

[daleanime]

149. Then why aren't we working to fix those problems...

instead of making some of them worser?

[kjackson227]

39. Grasping an understanding of facts regarding a situation...

is a wonderful thing, and level heads will prevail.

Thanks for your excellent post, Jeff.

[RC]

46. Here is a chart that shows the real inflation rate.

How does this stack up against the COLA adjustments of Social Security?


Source: http://inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp

The average rate of inflation, according to this chart is 2.3091%. Nowhere close to what the Social Security COLA has been.

[MotherPetrie]

54. I'll never capitulate to Obama's capitulation to the Repugs

[freshwest]

57. Thanks Jeff, you said it all here. Much appreciated.

[budkin]

61. That was a waste of time. It's a cut.

[Doctor_J]

62. This post is why the party is on life support

There is absolutely no moral compass left in it. There is nothing we stand for any more. ANYTHING this president does is excused, even to the point of making stuff up.

There is no need to cut benefits, at all, for any reason. Why can't the president, for once in his life,act like a Dem and fight the Repukes, who are the mortal enemies of this country?

Oh, and while this steaming turd was ripening, this was posted

President Obama Offered More Cuts To Social Security Benefits Than To The Pentagon

[newfie11]

68. I agree

If this happens it will have a major effect on the Democratic Party.

This can be sugar coated all anyone wants but why do this. If money is what the government needs why are they not going after big subsidies , oil companies for one.

I do not believe taking money ( yes it is taking money ) from seniors would net anywhere close to what the oil subsidies are. Seniors need their Money to live on. Oil companies are making billions thank you.

This is wrong and people know it.

[Jeff In Milwaukee]

79. Say what?

We just won the White and picked up seats in both the House and the Senate. We're on life support?

[Summer Hathaway]

154. You're wasting your keystrokes

trying to talk sense into the doomsayers.

Re-electing Obama in a landslide and picking up seats equals 'the party is on life-support'. That's their - uh - logic.

[fascisthunter]

87. I agree

[plethoro]

133. Excellent, Doc. If chained CPI passes, I wouldn't

want to be a 52 year-old thinking he will get his social security. All a gullible public will hear is Obama and the Democrats cut your Social Security and at best the Democratic Party will lose in a bloodbath in 2014 and again in 2016 minus some of the blood. At worst the Democratic Party will fade out like the Whigs once the Republicans bring in enough para military monsters in to scare the citizenry. We have been conned, are being conned and will continue to be conned. Honest to God, I wish I had never opened the above Header Post. I get old people calling me up crying every 20 minutes. They are scared, and they have a right to be... Will we ever stick together on anything and be prepared to do anything more strident that emailing Bernie Sanders. Now I have to go do the supplies for my Azheimer's residents. I wish I didn't have to go today. I enjoy reading your posts, Doc, and will continue to read them until some HM takes me out.

[octoberlib]

143. +1

[abelenkpe]

74. I'm glad reasonable democrats are ready to cave over this technicality

I'm sure you'll be okay with taxes Only going up on millionaires and dividends and capital gains taxes not being raised. I mean it's not like those seniors who only have social security are struggling today as the price of care and necessities rise and CPI numbers are fudged. What's a few thousand more from everyone?

This does nothing to solve the problems we face or cure the economy. Nothing. It doesn't spur job growth or fix unemployment. It increases insecurity! It doesn't significantly increase revenue or address the problem of rising inequality. We should be raising the cap on ss and lowering the eligibility age for Medicare not talking about cuts. We have a perfectly good blueprint for solving the economic crisis we face but are choosing instead to ignore history, continuing to concentrate on deficit cuts during a global economic slowdown to appease the banks (same banks that have been shown to be criminals yet we don't prosecute them, same banks we bailed out and are swimming in money today). Why are democrats letting republican talking points lead the discussion?

[ieoeja]

82. If they can't afford steak, eat hamburger. If they can't afford bread, let them eat cake.

We are now debating whether "let them eat cake" should be an official policy of the United States of America.

You actually went there.

[Rabid_Rabbit]

84. Thanks for this

With all the hysteria I had a hard time figuring out the chained CPI. But the fact that this is simply a reduction in rate of growth makes it clear to me now. I don't see how the president can be criticized for this.

[Jakes Progress]

96. Yeah. Our hero needed an out.

[Dustlawyer]

86. There should be a cost of living increase. I have been paying a lot in for 37 years.

If I live long enough to collect, all these years I have not obviously taken anything out as the amount I put in has gone up over the years, so should my SS once I start receiving. There are many who argue that currently it does not keep up. At a minimum, I should keep the same purchasing power as I get older on the benefits! We don't want cat food!

[TreasonousBastard]

89. I agree absolutely. The expected meltown over "what might be"...

will obsess this place until the next shiny thing appears.

I have been advised of my latest COLA of around 20 bucks, which is appreciated, but if it were reduced to 10 under the new plan I wouldn't kill over it. What kills me, aside from the doomsayers, is that the blame is put on Obama for trying to deal with a wall that has made it clear it doesn't want to move.

Completely forgotten is the new House that will seat next month. From what little I know of politics, I'm assuming the White House has already contacted the new members with threats and promises to counter House leadership threats and promises.

We have no idea what the final deal will be, but if a deal isn't cut everyone loses.

[heaven05]

91. I repeat

thank you for a reasoned approach. Maybe it will sink in with the blue dog democrats/rethug trollers/Quislings? that infest this site .

[forestpath]

94. It needs to be said that doing this to seniors is cruel, immoral and cynical.

[Jeff In Milwaukee]

100. Low income elderly are exempt. SSI recipients are exempt.

This is a three-tenths of one percent decrease in the amount of inflation, which is then bumped up at age 85. The only people who will notice the difference are the people who won't care. People like me who have other sources of retirement income and who actually pay TAX on their Social Security benefits.

Please follow the CAP and CPBB links and read about it.

[blackspade]

99. Dear DINOs,

Those of us who have formed the base of the Democratic Party have long been aware of your 'Third Way'(TM) infiltration of the party.
Democrats do not want Social Security to be part of the debt discussion because it has nothing to do with it.
As for the other crap in this bullshit article:
As a supporter of Obama, I am part of his base. I voted for him in the last two elections and voted for Democrats in every election, so you can take your right wing 'Liberal" demonization and cram it up your cram hole.
'Liberals' and "progressives' make up the bulk of the Democratic Party whether the DINOs in the party like it or not, and we are finally reclaiming our voice in the direction that the party is taking.
Using words like 'professional left' reveals you for what you are: DINOs.

And as for this crap:

For every "progressive" who believes that such slowing of the rate of growth is a "benefit cut," I would like them also to step forward and with a straight face, tell me that cutting the rate of growth of defense spending is a "cut" in defense spending. If you think you're a liberal, go ahead and try to say that. Out loud. With a straight face. You can't do it, can you?

To the author of this piece, FU. I'll say it. Slowing the growth rate of defense spending is a cut of the shittiest sort. It doesn't make tough choices about getting rid of our 700+ bases overseas or not buying that extra aircraft carrier.

[Jeff In Milwaukee]

108. So slowing the rate of defense spending growth isn't a cut...

And so slowing the rate of Social Security spending isn't a cut. You're actually making the argument that you seem to oppose.

We're talking semantics here. Will checks from Social Security be smaller? Yes. For some seniors they will absolutely be smaller (you can call this a "benefit cut" or whatever label you want to put on it); you can't get $150 billion in savings without reducing the the outlays. But the benefits being cut are NOT for low-income elderly and NOT for persons receiving SSI.

It's for people like me who will have multiple sources of revenue in retirement and, consequently, won't rely on Social Security as our sole means of support. A 0.3% reduction in my inflation increase in not financially crippling. And to the extend that it makes the system financially sustainable in perpetuity, I'm good with that.

[blackspade]

127. Whatever.

I responded to the challenge.
Slowing the rate of increase is a cut, just a shitty one both for SS and defense.
The author's use of defense was just a straw man argument, but I was willing to indulge them.
Social Security has no business as part of debt negotiations, Defense does, as it makes up a huge part of the deficit.
Comparing the two is intellectual dishonesty.

As for 150 b in savings? To what end? Where does that money go? What is the point at this juncture?
As a bargaining chip, this one is more of a self inflicted wound for Obama, as it does nothing to strengthen his negotiating hand with the 'thugs.
And as you have pointed out, pointlessly pisses off us 'liberals,' 'progressives,' and 'professional leftists' that make up the core of the party.

[AnnieK401]

103. Jeff in Milwaukee you make some good points, however

a couple of concerns: Who will be considered "the most vulnerable." Personally, I was forced to go on disability this yr. (at 55) and right now it is my only source of income. I am forced to take money out of savings, but that will be gone in a few yrs. unless I use it to possibly buy some very inexpensive rental property. However, there are reasons I am not doing that yet. I would like to work part-time if I can find something, but the chances of that look bleak. I know there are many people out there in very similar situations. Are we "the most vulnerable?" And, OK I know the amount per month per beneficiary might not be much, but when you are on such a limited income even a small amount can mean a lot. Also, we all know there are other ways to raise revenue. Still, I am a realist and understand that the POTUS is not omnipotent. It is true that we are a deeply divided nation and our Congress, which will ultimately have to approve any agreement, reflects that. We have to fight against people who would not be saddened to see any of us out on the street in wheel chairs. That is the truth. Sorry.

[WCGreen]

110. I am really disabled and have tried every year to keep working...

It was only this year that I could not work and so have to rely on my SSI much more.

[AnnieK401]

116. I have been looking for something PT, and have even been on a few interviews

but nothing so far. Believe me, if I could find something that I could physically do and someone who would hire me, I would do it.

[WCGreen]

122. I do taxes and in most years it is enough to get us to a break even point.

Take a Tax Course and register with the IRS and you can set up and do returns. For the cost of a couple hundred bucks, you can get all you need.

Seriously, if you get ten clients the first year you will more than cover your costs.

[AnnieK401]

126. I thought of going taking the H&R block course and working with them.

[WCGreen]

150. It's a good job and you can make a decent chunk of change....

[Jeff In Milwaukee]

117. I don't know the specific definition

The CBPP proposal argues for a complete exemption for SSI recipients. The proposal doesn't get into the specifics (i.e., 150% of the Federal Poverty Level), but I would assume that's what the negotiations are all about.

I'll say this. I voted for Obama not just because he's a Democrat, but because I trust his to do the right thing. I trust that he'll negotiate for the best policy that he can get under the circumstances. It may not be the policy that I would have wanted, but I don't for one moment doubt his motives.

[AnnieK401]

119. I understand and basically feel the same way.

That is ultimately why he was reelected. The majority of voters saw the same thing. And I agree we need to wait and get more specifics before we get the pitchforks and torches out.

[plethoro]

104. Baloney. This is a stealth cut to social security that makes it lose its ability to

keep up with inflation and creates more hell to the neediest than if the chained CPI was not used. And it gives another departure point for this now questionable corporatist president to do even further cuts. And those on his side as he destroys the weakest among us will be forever remembered with scorn.

[caseymoz]

105. Doesn't effect the most vulnerable

. . . it just makes everyone else on Social Security more vulnerable.

I don't like the very foundation of CPI: that people should be able to find less expensive substitutes. These substitutes are what they sound like: often not the best thing for the need. If the substitutes were the better or equal, though cheaper item, people would be using them rather than the more expensive one. Substituting soy powder for eggs is a sign of impoverishment. A bottom can be reached there pretty soon if that's made the basis for why this plan works. There's nowhere else to go when you're substituting dirt for coffee. This is as much a gimmick as trickle down economics was.

Here's the bottom line: people on Social Security will get less. Our politicians have arranged this so people like yourself can think (quite selfishly) "I won't get less, he'll get less," and persuade everybody else of that. That's similar to, "Don't raise my taxes, raise the other person's." And just so you don't feel too guilty to support it, they assure you that other guy doesn't need it anyway (hence the "most vulnerable won't suffer" clause lifting the guilt from you for even considering this scheme).

If the government is somehow saving more money with this plan, it means recipients are getting less. There's no other mathematical way it's possible.

It doesn't matter that CPI is tied to other government programs, some for the wealthy, because people on Social Security have much less money to work with. If two percent comes out of a person making $100,000 income, (at least in my area) they'll survive. You take that from somebody on Social Security, you've probably killed them.

This applies only to what the initial proposal is. It will probably be worse once it's turned over to the Republican House for amendment and then put into committee.

This doesn't reduce the deficit. Obama is just doing this because Repubs want some kind of Social Security cut. It's worse when you consider that it's a bad precedent. Other cuts to Social Security become possible in the future because this one was given.

I never demanded Obama's head on a platter. I just want people to be truthful about this, despite the fact that Obama is endorsing it. If I took Obama's name off this and looked at it, I would still tell you this is not a good deal, and it's totally unnecessary to reducing the deficit.

People will notice they are getting less. And mark my words, despite that "most vulnerable" clause, people who can't afford it will notice. If it doesn't effect the "most vulnerable" this is going to push more into that category.

[WCGreen]

109. Jeff, I understand the logic behind this explaination...

But I think the details still don't make sense to people who want cuts in Defense Spending, tax rates become more progressive and, for me at least, stopping the special treatment of Capital Gains and Dividends.

Basically, the reason why SS is in the state it is, and that being looked at as an easy revenue pile for the Federal Government, is because DC has consistently used the money in the Trust Fund to finance unfunded defense spending and tax cuts for the wealthiest people in the country, the so-called "Job Creators."

In other words, we are spending down OUR future for the benefit of people like Romney.

That would be like a company raiding Retained Earnings in order to pay off current liabilities. And that is a sure way toward default.

[CranialRectaLoopback]

113. Would like some mustard with that pretzel?

Here's a novel idea. Propose removing the cap on the social security flat tax and the compute social security COLAs based on what actually drives the elderly's expenses. When you WIN, you propose what YOU want, not what the LOSER wants.

[hrmjustin]

114. Welcome to DU and I hope you enjoy the site.

[Jeff In Milwaukee]

121. It just doesn't work that way

Any proposal has to come out of the House Ways and Means Committee, which is currently chaired (as are all House committees) by a Republican. And Republicans control the House -- and unless we reform Senate filibuster rules, they pretty much control the Senate, too.

I agree with you. I'd prefer to remove the cap on wages and then the discussion about COLA's would be largely academic because the system would be flush with cash - and the Social Security Tax would be lower. But right now we have to play the hand we're dealt.

[Aldo Leopold]

115. Thanks for the post, a good read.

Plus, I loved the "Grand Mal Freakout (TM)".

[radiclib]

118. There is no reason for SS to be part of the discussion

How many times does it need to be said? Social Security contributes ZERO to the deficit. And the snarky tone towards Krugman's beard and the "Professional Left" speaks loudly about where you're coming from.

[Jeff In Milwaukee]

123. I agree with you...

Social Security and deficit have nothing to do with each other. The savings to Social Security won't reduce the deficit by one cent, but it will stabilize Social Security in perpetuity, which is why this is a deal worth considering.

And I have a beard myself and didn't take offense at that.

[still_one]

128. Just one simple question, why can't they raise the cap? Problem solved

[Ineeda]

145. Except for the promise not to raise taxes on

those making $250K or less. The cap now stands at $107K, I think. So we'd be screaming bloody murder over that, too. (Although I, personally, think that's a sensible option.)

[still_one]

153. Good point. It can also be argued they promised not to cut SS, and anyway you look at it removing

COLA is cutting SS

[limpyhobbler]

129. It's sad to watch liberals change their tune from

"Obama would never do that" to "actually cutting Social Security is cool".

[tallahasseedem]

130. Thank you for this...

Negotiating is like making sausage...it's dirty.

I'm waiting to hear all the details...for the love of all that's good and holy, I wish some others would as well.

[malibea]

169. Me too!

I agree with you 200%. But apparently these are the naysayers-already negatively done deal! Too bad.

[austinlw]

131. Thank you for offering a rational explanation

I have been somewhat confused about this, but concerned. It seems like a cut to me, and an unnecessary one, even if it is just based on future projections. I understand your argument about reducing the rate of growth. But comparing it to rate of growth in military spending? Hmmm... I'm not sure if that comparison is valid. SS is a retirement life support system for individuals and every dollar (or 5 or 20 or 100) can be critically important for many of them. That's very different from military spending.

I am in a similar situation as you (Jeff in Mil). I'm 56, have a relatively modest 403B account that'll probably be worth a few hundred a month as an annuity, but I've been in the Texas Teacher Retirement System my whole career, so I'll have a reasonably decent paycheck the rest of my life which SS (at a reduced rate) will supplement. So a difference of a few bucks a month 20 years from now is probably not going to be critical for me personally. But I can see how it could be for many people (even friends and coworkers) and I'm concerned for them.

My overriding criticism of Obama (and now Pelosi) on this issue is that it's being thrown into the mix in negotiations over a long term deficit reduction plan when SS is completely irrelevant to deficit reduction. If we want to fix the long term SS problem, fine, but it can be done separately later. And there are other ways to do it (raising the cap). Throwing it into the mix now conflates it with the deficit problem (sort of like Bush conflating Iraq with Al Qaeda). Why would Obama offer this now rather than later as a separate issue, unless he's throwing in something he himself wanted to do anyway and just using it as a bargaining tool? That's the only way I can make sense out of it. And if it's something he wants to do anyway, he needs to have the guts to explain it to the American people, or maybe get Bill Clinton to explain it, since he seems to be the best 'splainer around. I want to hear Obama's rationale as to why this must be done. He sidestepped it yesterday, even though it was specifically mentioned in a question.

I agree with Obama most of the time. This one just has me puzzled. I agree that there has been way too much overreaction on the left before we even know all the details (not unusual). It reminds me somewhat of the tea party reaction to Obamacare. But I'm anxious to see how it all comes out in the wash. I'm skeptical (but calm).

[grattsl]

134. This needs to be said BS!!!! I'm calling you on it. It's a cut!!!

Straight faced, 100% honest, and definitely not laughing.

If those on SS will receive less, it's a cut. No matter how you try to justify it, how you try to pretty it up, or how you try to confuse us with arguments that have NO supporting evidence.

Again, senors receive less = CUTS!!! No way around it.

I don't care if it's $5.00 or $2500.00. If senors receive less it is a cut!!!

To say otherwise is complete and total BS.


P.S. SS does not contribute to the problem and should not be touched, even if it is touched by a President I voted for. It is WRONG to take away benefits after one spends a working lifetime contributing in. This is not acceptable. Nor is the hurt them a little now to avoid privatization argument. Now you are simply piling up the BS into a bigger nastier pile. They will still try, no matter what happens, and it will still be up to real democrats to stand up and say no.

[Beacool]

141. AARP calculates that over a period of time

this would be the amount of three months worth of food for some seniors. There are many seniors who can barely make ends meet as it is.

[Ineeda]

144. See post #78. n/t

[Jeff In Milwaukee]

146. To reiterate:

Low Income and SSI recipients are exempt. If you're barely making ends meet, the new calculation doesn't apply to you.

[zipplewrath]

148. So a good idea is...

So your good idea is to back more and more people into this position where the minimums have to kick in?

The honest truth is that the CURRENT calculation is flawed. It under estimates the cost of living for seniors. This isn't "change we can believe in". It is "change we never should have considered in the first place".

[valerief]

176. No organic food for seniors!!! Frankenfood only!!! nt

[backscatter712]

177. Stop confusing people with facts!

How can the despair trolls keep stirring the shit when you post truth like this?

[Bake]

178. It assumes, wrongly in some cases, that less expensive substitutes ARE available

And then it FORCES them to choose those substitutes, even if they are imperfect substitutes.

And that's why you get the cat food analogy. Because it is, in fact, a cut. Your analogy to defense spending is a poor analogy, like apples and oranges.

CPI is itself a poor measure of the cost of living. Chained CPI is an even worse one.

Bake