So as expected, president Obama released his budget proposals with his offer to make cuts in Social Security (via the chained CPI) in return for some tax hikes. And as equally expected, some leading Republicans are now saying that it is the Democrats who are trying to balance the budget on the backs of seniors by cutting benefits in social services and that they are going to defend it (see here and here).
In his defense, it has been argued that Obama is playing a deep and clever game, that he is making his offer knowing that Republicans won’t accept tax cuts in any form and that the deal will go nowhere, enabling him to make the claim that Republicans are totally intransigent, and that making his supporters angry is a way of building credibility with Republicans and the general public that he is making a serious offer.
I don’t buy it. In any negotiation, you never make an offer that you would not be comfortable to live with, however confidently you think the other side dislikes it and will reject it. The second reason for my skepticism is that Obama and leading Democrats serve the same oligarchic interests as the Republicans, just different factions within them, and their desire to please them has been well established. In fact, the extreme right wing group Club for Growth has welcomed Obama’s proposal to cut Social Security.
The second reason for my skepticism is that Obama and leading Democrats serve the same oligarchic interests as the Republicans, just different factions within them
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I agree: it is simply a game among the elites. They know exactly what they are doing. It is nothing more than theatre for the masses.
Anyone who doesn’t think Republicans are intransigent by now will not be convinced of this. If that’s the game, then that’s a dumb game.
I don’t understand the opposition to the use of the chained CPI to calculate Social Security COLAs. Chained CPI is apparently a more accurate picture of how people actually respond to changes in prices. If a COLA is to be a true cost-of-living adjustment, and not a raise (as might be expected from an employer), wouldn’t the most accurate measure of inflation be the preferred benchmark?
This is not intended as a comment on Mr Obama’s negotiating abilities, (or much less on how the Republicans might frame it) but as an honest question. Is there something that I’m not seeing?
Since social security is separately funded and has not contributed a dime to the deficit, whether we are talking annual budget deficit or total national debt deficit, can we assume that any savings realized by reducing social security benefits will be returned to the people as a social-security tax cut?
Ah no -- thought not.
The real issue is the insane defence budget which needs to be cut by at least 60% annually. Just cancelling the non-functioning F35 would save many billions………but as Paul Krugman asks -- “what is so bad about the deficit anyway? Nobody seems to know except that it is bad by doctrinal definition and before Obama became president it wasn’t bad.
The chained CPI is not really a measure of inflation, the rise in the price of the same basket of goods over time, because it assumes that people can shift to cheaper alternatives. Yes, people shift to alternative items if they have no money. But using that logic, you can start shifting things in at out of the basket of goods to make the rate of inflation lower than it actually is. And it will only go one way, of reducing the rate. But how far can this be taken? You can end up with a basket of goods that is so low in quality that is theoretically possible but not something that most people actually want.
The chained CPI is dishonest way of cutting benefits. If they were honest they would say that the COLA is going to be less than the CPI. That way we would have an honest measure of the rate of inflation while steadily impoverishing old people. But of course, they don’t ant to openly say that that is their intent.
The chained CPI is an extremely unfair way to calculate COLAS. The first time they use it, it might be okay, but after that everything goes downhill. The chained CPI doesn’t nearly keep up with the rate of inflation or the increase in prices of everything. Then, on the rare occasion that they actually give us any type of COLA, it isn’t enough to really do anything with.
For example, last year (2013) they gave us a COLA of a whopping 1.7%. For me, that amounted to about $18 and some change. What the hell am I supposed to do with that? It wasn’t enough money to really do anything with. This coming year, 2014, I heard that Uncle Sam is maybe going to give us a whopping 1.5%. Whoopee!
The chained CPI also doesn’t take into account the increased amount of out-of-pocket medical expenses that we Social Security recipients are forced to pay because Medicare will not any longer pay for many things we depend on to maintain our health.