You are going to hear a lot about chained CPI. If you want to know why progressives hate the idea, this explains it. It’s basically statistical manipulation that is used to lower the cost of living adjustments the government makes to various programs, including Social Security. It means less money for you and me in retirement. A good guess is that we’ll see a three percent reduction in our earned benefits. Why should the elderly pay the price for our stupid wars and tax cuts for the rich?
Well, they shouldn’t. The rich should pay for it all. The vulnerable should pay for none of it.
However, just because chained CPI is unfair and unjustified, that doesn’t mean that the president isn’t in the process of brokering a worthwhile deal. In a negotiated compromise with asshole Republicans, there has to be at least a couple things we hate included. The question in this case is: what do we get in return and what to we get to keep instead? And, then, is it a better deal than we’d get just by going over the fiscal cliff?
It’s not possible to answer those questions definitively until we see the whole package. Democratic advocates of chained CPI see it as more palatable than increasing the retirement age for Medicare. I can’t argue with that, but we don’t need to do either thing if we just off the cliff. So, what do we get for not going over the cliff?
It appears that we get quite a lot. We get an extension of unemployment benefits and a no-drama extension of debt ceiling. We get a modest stimulus bill focused on much-needed infrastructure projects. We limit itemized deductions for the rich. We get a permanent solution for the Alternative Minimum Tax and the Medicare Doc Fix. We avoid rattling the markets or further jeopardizing our credit rating. We regain control over the budget rather than having to put the pieces back together after sequestration takes place.
The Republicans reportedly get tax protection for people making under $400,000 a year, cuts to Social Security cost of living adjustments, a commitment to do tax reform this year, and significant cuts in discretionary spending.
Also, the payroll tax holiday expires. That’s probably a good thing, although it will take a bite out of the economy.
The Republicans are still resisting elements of this deal, so it could get worse. As it stands, it’s weak enough tea for the Republicans that I suspect they will have trouble passing it. It definitely is not a sweet deal for the Democrats, but it would accomplish a lot for the president and give him room to begin governing again like a first world leader instead of fighting over whether we’ll pay our bills.
I find it modestly preferable to going over the cliff and dealing with the ensuing chaos. But only modestly preferable. I suppose that is the nature of these kinds of deals when you have leverage but not dictatorial powers.
No deal, no C-CPI, you live on SS and see how far it gets you.
Social Security contributes $0 to the deficit or Federal debt.
Comments: 202-456-1111, White House
Tell them no.
As someone whose retirement savings are small and who will depend on social security for much of my old age, this is is unacceptable to me. And as someone who’s spent most of his adult life working for nonprofit human services organizations, i know that such a deal wouldn’t just impact my Social Security it would also cut food stamps and veterans benefits across the board, it’s even less acceptable.
So it looks like my retirement plan -self-immolate on the steps of capitol hill- is still in effect. Well, that’s if I can still afford to buy a gallon or two of gasoline with which to douse myself once I’m in my 70s.
I should have added that the deal is supposed to exclude chained CPI for people on SSI and disabled vets.
That’s some of the stupidest accounting I’ve ever heard of, but the protections are supposed to be in there.
Sounds pretty Republican to me, I’ve got mine so let my children fend for themselves. No way.
If Obama does agree to the Social Security cuts I GUARANTEE that in 2014 the GOP will run on the campaign that THE DEMS CUT SOCIAL SECURITY. And, most likely, the Democrats won’t counter that meme and the Washington news media will basically support it. After the 2014 GOP wins the exit polls will show that 3/4 of the electorate believed that the Democrats pushed for the Social Security cuts.
Hard to believe? Well, isn’t this just a replay of 2010? 3/4 of the electorate believed that their taxes had gone up when in fact they went down and believed that the Democrats had slashed medicare.
C’mon, Obama, show some backbone. Ok, it’s not like 2009 when he, metaphorically, went into a car dealer and offered to pay $2000 over list for a domestic sedan. Now he’s like a second time car buyer who is armed with car buying advice and a pricing report from Consumer Reports. He’s still going to pay far more than a skilled negotiator would.
I don’t really give a shit about that.
Without endorsing the deal (although it does sound very slightly better than the cliff), it will force hundreds of Republicans to violate their Norquist pledge and raise taxes on the rich, raise taxes on the poor (elimination of payroll holiday), reduce retirement benefits, and extend the debt ceiling.
Any Democrat who wants to run against an incumbent Republican will be loaded for bear.
And the Republicans will accuse of doing things that we don’t do anyway. Don’t be surprised if they accuse of raising the Medicare retirement age even though we made a trade to avoid doing that.
Their campaigns are not run by fact-checkers.
We can’t make decisions based on whether the GOP will attack us for making them. They will attack us no matter what.
This deal should be judged on its merits against all possible alternatives.
“This deal should be judged on its merits against all possible alternatives.”
Yes, but “merits” and “possible alternatives” are in the eyes of the beholder.
We’re on new negotiation ground here and Democrats have the clear upper hand. I’ll take the “cliff” over this. We already know that Soc Sec raises don’t take into account the typical basket of goods and services that seniors pay for. This is a bad move that places insult upon injury.
I do recognize that in this shared government though each party (even the GOP) needs cover, a trophy, to show to their voters they didn’t completely cave.
“This deal should be judged on its merits against all possible alternatives.” We already have the best deal.
Let the Bush tax cuts expire then make the Republicans vote against tax cuts for the 98% next year sticking to the $250k cutoff.
After the sequester takes hold, let the military cuts stand while making the Republicans vote against reversing the most painful austerity measures. A bit more pain in the red states is long overdue.
Let them refuse to raise the debt ceiling. How will that go over with Wall Street?
Time to play hardball with these bastards. Let’s not snatch defeat from the jaws of victory.
If Obama does agree to the Social Security cuts I GUARANTEE that in 2014 the GOP will run on the campaign that THE DEMS CUT SOCIAL SECURITY.
You told us exactly the same thing about Obama “putting it on the table” last July. The Republicans’ silence on the matter was deafening throughout the campaign.
No, I don’t believe you. In 2010, the Republicans were running against a plan that they had all voted against. If this deal goes through, they will be voting for (their) plan to used to chained CPI.
Ok, it’s not like 2009 when he, metaphorically, went into a car dealer and offered to pay $2000 over list for a domestic sedan. Now he’s like a second time car buyer who is armed with car buying advice and a pricing report from Consumer Reports. He’s still going to pay far more than a skilled negotiator would.
For you to still be writing this, in the aftermath of the most success legislative presidential term in four decades, does not make me any more inclined to take your advice seriously.
If “nothing’s agreed until everything’s agreed” then I’m for holding out on a chained-CPI for Social Security until there’s an equivalent SS tax hike for the affluent.
As Kevin Drum argued yesterday, “We can argue all day about whether Social Security needs rescuing in the first place, and if we decide it does, we can then argue about exactly which combination of measures would be fairest and best. But some things should be completely off the table, and passing a package that’s 100% benefit cuts is one of them. It’s ridiculous. This is really a no-brainer.”
And Drum favors a deal on Social Security.
Here’s the link: http://www.motherjones.com/kevin-drum/2012/12/adopting-chained-cpi-terrible-idea-its-own
I’d rather see them raise the SS tax cap.
Yes, definitely preferable to do that.
Hah, of course Drum’s against that too.
Looks like Boehner rejected the offer.
But apparently, they are delighted the president is negotiating. So there’s that. But for now, the question is MOOT.
Translation: balloon floated. balloon shot down with wingnut flamethrower.
Obama starts to cave and immediately the repugnants slap him down and demand more. How can he be so thick? Mr Obama, the repugnants do not negotiate in good faith. You have seen that repeatedly during your administrationl Why can’t you get that through you thick skull? Let them twist in the wind. The cliff is the best prospect for you and for us. Go for it! Afterwards you will be able to call the shots. Yes, call the shots, not respond secondhand to what your enemies offer.
Time for Obama to unsweeten the deal some more.
yep.
Unsweeten for us, or them?
What joe from Lowell said downthread.
“Last time, when it looked like Boehner might “bite” on $1 trillion in tax increases, Obama came back with a new offer, asking for $1.4 trillion in tax increases.”
Obama starts to cave and immediately the repugnants slap him down and demand more. How can he be so thick?
How cay you be so thick?
You JUST watched this same thing happen, in July 2011.
He’s putting out offers he know will not be accepted, so the Republicans will look like the bad guys.
Again. Just like last time.
That remains to be seen. He may well have his hand bitten off when they bite. We’ll see.
Last time, when it looked like Boehner might “bite” on $1 trillion in tax increases, Obama came back with a new offer, asking for $1.4 trillion in tax increases.
I doubt they’re going to get trapped like that.
I hope you’re right. Oh, you’re the other joe from Lowell.
Boehner rejected the offer because the tea baggers have no idea what CPI is. We are going over the cliff.
Very good to end the payroll tax holiday. That was a dreadful idea in the first place, although I understand the motivation. Still, it simply fed into the idea of SS going down the tubes due to cash flow.
They should raise the limit on taxable income. I’m over the limit. I should be paying on more income.
Merely raising the limit on SS taxable income at this time does nothing but increase the federal debt and the SS surplus. We’ve gone down a version of that road when we increased the contribution rate and then promptly squander that surplus by reducing individual and corporate tax receipts. All under the silly notion that down the road, those that benefited from those income tax cuts would pay it back when SS needed to collect on the borrowed funds.
A more equitable and practical approach would retain a cap for benefit calculations and tax all earned income at a reduced rate. At this time the change should be income neutral for SS.
Great. My SS taxes, that by virtue of being self-employed are 2x, are going up. In return, when I ‘retire’ (which is itself a joke, I’ll need to work until I drop dead) the pittance that I’ll collect because I don’t make much will be cut.
I’m so fucking sick of this country. A tiny fraction controls all of the wealth and every day we get fucked more and more.
Shouldn’t the amount contributed to SS for each employed individual based on the same income be the same?
If he’s self-employed, he pays both the employer and employee sides.
Your answer is non-responsive. But just to clarify for others, those that choose to be (or have the privilege of being) self-employed assume the SS financial obligations of an employer. He/she as an individual worker has the same SS tax obligation as any worker. The point is that SS paid for each worker with the same income is supposed to be the same regardless of who the employer is. Too frequently the self-employed complain that they have an unfair SS tax burden when the truth is that it would be unfair to give them a pass on employer SS taxes.
I can’t read your mind. I responded to the question you asked, not the question you had hoped to ask.
The only thing I can say is that any Democrat and I do mean any who votes for this will NEVER get my vote ever again for anything if this should pass. I will vote for their opponent. This is MY leverage and I live in Colorado where it counts, at least somewhat for now. I will place a framed copy this roll call vote right next to my “Presidential Cool” picture of Obama to remind me. Nothing is worth any cut to any Social Security benefits. Nothing. Social Security has NOTHING to do with the deficit. Let the Republicans crash the economy so we can finally get them out of office but stop this hostage thing. I hope Nancy Pelosi will help Obama in the spine department in dealing with the Republicans because if we cave on this it’s the same as just rearranging the deck chairs on the Titanic. Unless we break the fever they’re going to crash the economy anyway.
Presuming Boehner can’t get this over the line with his own caucus and congressional Dems refuse to help out and the measure is defeated, how does this help or damage Democrats post cliff? Will a divided GOP continue to be on the defensive, or will Obama have dissipated all the goodwill and momentum he has built up?
I truly hope Obama never allows this to become part of any deal because it will show us he was not sincere while on the campaign trail. I know I would be very disappointed, not only in him but in myself for believing him once again. I do think faux caving by Obama, even if he knows the other side will reject the idea still hurts his goodwill and momentum.
I think the key is who gets blamed for the pain. The Republicans are already painted into that corner. Trying to get out of that corner will further divide them. My hope is that they get divided enough so we can proceed with measures to repair our broken economy before this spirals out of control.
I’m leaning your way. I’m tired of getting screwed.
How nice of Democrats to bargain with my income in order to keep from cutting military spending.
It would be politically helpful to the country right now if President Obama for once did not cave. He should go through the motions but if the automatic tax cut expirations and sequestration are avoided through his backing down, it sets a bad tone for next year and the next four years.
At some point you have to stand up to the bully on the debt ceiling. And I’m not willing to bet this time that Boehner’s caucus will force us over the cliff.
Most of the country has accepted the fact that we likely will see the automatic provisions.
Clean middle-class tax cuts or nothing.
I believe it’s kabuki, THD. We can get a better deal after January 1st.
It may be kabuki but it goes back on Obama’s statement that Social Security is not on the table.
I know we can get a better deal after January 1. Kent Conrad’s gone. Ben Nelson’s gone. Joe Lieberman’s gone. Some blue dogs in the House are gone.
Well only two weeks more of this madness.
We’re still going to get sequester-level cuts; they’ll just be shifted from defense to Medicare. BadBadBadBad!
We’re going to have virtually all of the Bush tax cuts, now permanent, and long-term that’s very bad because our taxes are too low for what the government needs to do. Really, Obama’s initial offer was already too low for good policy. Long-term the Bush tax cuts need to be reversed in their entirety. Making the tax code more progressive, by cutting taxes for the poor and raising them on the rich, would be a good idea; but we need almost every penny from the tax cuts back.
And, finally, we get the chained CPI WITHOUT any adjustment for increased inequality. The payroll cap should absolutely go up as part of any deal to fix SS. The worst part is that this unfair and politically costly deal does nothing to help the deficit (as others pointed out above.)
There are short-term benefits in avoiding some chaos and some short-term stimulus, but long-term it’s not worth it. The stimulus is too small to have a measurable effect anyway.
To answer your question, the deal looks like it just plain isn’t happening at this point. If Boehner can’t accept even Obama’s offer, which is somewhere between very and excessively generous, I don’t think he can accept anything at all.
I think we’re going over the cliff.
The amount of consternation that will surely be wasted (somebody, somewhere is CAVING!!!) for a deal that will be thoroughly dead by midweek (and probably already is by today) is just wonderful. Whatever finally happens, you don’t know what it looks like yet. Period.
For something to pass, though, Democrats need to hurry up and get to yes first. Pick a revenue target they can live with, pick a spending cuts mix they can live with, and let Boehner either flounder or eke it out. At some point, you have to be willing to take 80% of a win.
The problem is this deal will be the basis for further negotiations. There will be a deal next year, in some form or another, and now Obama will look bad if he pulls back any of the bad ideas on this list.
Not really. I’m pretty sure there are bad ideas that were (purported to be) part of the debt ceiling negotiations that aren’t on the list now. I think both Boehner (with his laughable offer that still violates the dictates of Autarch Norquist) and Obama are just trying to be seen as willing to compromise so they don’t get blamed when we enter the New Year (not to mention the Mayan Sixth World!) without a deal.
Or, this could just be Obama’s attempt to look “reasonable” before they go off the cliff.
Obama will be in a better post-cliff position if it looks like he’s made offers prior to the end of the year.
We’ll see. I’m totally opposed to even touching Social Security, as it has nothing to do with the deficit at all. It’s crazy. If anything Social Security needs to be increased. It’s not sufficient for many, particularly women.
After the beginning of the year if the sequester is invoked, the President needs to talk about the changed situation in resetting his negotiating position to something tougher. Part of that new position needs to be a permanent end to the debt ceiling nonsense. And the argument is that we need to get our fiscal house in order without gimmicks that let Congress escape responsibility for the debt.
Exactly.
I agree with Booman’s analysis.
Not enough people recognize that compromise is required. Not enough people acknowledge that the GOP controls the House, and that the GOP is controlled by nuts. And not enough people recognize that there are important things we cannot get if we go over the cliff, like extending unemployment insurance.
Those who are quick to criticize should propose a plan that they would consider acceptable AND can pass the House. It’s not so easy.
The existing “fiscal cliff” is preferable to this deal. It doesn’t have to pass the House – it’s already law.
I’m not sure it is. The existing fiscal cliff contains a number of elements that would really hurt the economy, which is still in a pretty precarious state. The expiration of the tax cuts on people making less than $250K a year, the end of unemployment benefits, and the resumption of payroll taxes at the 6.2% rate, along with a variety of other cuts, would add up to doing a lot of damage. It’s the flip side of the argument against austerity.
Now, this isn’t stuff that would all happen immediatelly. Temporarily going over the cliff for more leverage is a reasonable approach. But as a long term it would not be good, even though a lot of the elements might not be so bad if the economy were stronger.
What great idea! We keep defunding Social Security for a temporary stimulus and then find some more ways to cut payments that we aren’t willing to fund. In the end after COLA cuts and means testing we are left with welfare and the public will be willing to kill it.
Brilliant, pillsy, simply brilliant! That is if you are a Republican.
There is nothing in pillsy comment that bears the slightest resemblance to your straw man.
You make the site worse with comments like these. Please stop. If you want to respond to what someone wrote, respond to what they wrote. Don’t do this.
Emphasis added.
I did respond to what he wrote. The above passage clearly shows a desire to continue defunding Social Security.
Well, looks like Republican madness saved us again like it did last year.
It I put together a plan that depends on the Republicans being insane, and the Republicans act insane, is it really their insanity that saved us?
“The Republicans are still resisting elements of this deal, so it could get worse.”
I don’t understand why we need any deal to “avert the fiscal cliff.” We’d get a much better deal after January 1.
I can’t see the Democratic caucuses in the House and Senate going for a deal that includes Social Security benefit cuts, after having made that such a red line.
I can’t see Obama agreeing to a deal that he can’t pass through Congress.
I can see Obama throwing out a lot of head fakes about how flexible and reasonable he is, so that the Republicans will take the political hit for the lack of a deal. After all, we just saw that happen in the debt ceiling talks.
Ya gotta love it. The looters have been freely operating since a judge back in the ’80’s decided that wage/benefit contracts were not enforcable in bankruptcy, and all the “job creators” could go about raiding pensions without any worry of incarceration for theft. Best case, SS benefits were intended as a supplement to retirement benefits. If you receive a retirement annuity from your employer, your SS stipend is reduced. Well, guess what’s happened to pensions over the last 30 years. If those pensions stolen by the 1%ers were still in effect, SS would not be having any problem handling the babyboomers’ retirement. So the 1% create the shortfall and then insist the poors pay for it again. Good work if you’re a sociopath.
Booman,
I agree with what you are saying but can you shine some light on why you think this is a better deal than after we go over the cliff?
RE: ” In a negotiated compromise with asshole Republicans, there has to be at least a couple things we hate included.”
False.
Obama is a moderate Republican, something many people have failed to understand. We heard all sorts of excuses during the Obamacare legislative process. Obama was constrained by this or that. He got the best deal possible.
He didn’t get the best deal possible. He was too passive.
Well, that was that. Now we have a situation where Obama’s superior position is evident, yet we are hearing about many unnecessary concessions.
What bothers me in what I’ve been reading (TPM and etc) is that Obama offered the chained CPI deal to Boehner. He offered to cut SocSec, essentially. Didn’t signal that he might be flexible on it, didn’t get his arm twisted into it; no, if the reporting is true, then it was the President’s idea to make the cuts.
No matter what level of negotiation he’s at, if he really offered cuts to SocSec voluntarily, he can’t just walk away after the GOP refuse the offer and pretend that it was never on the table. That bed won’t unshit itself.
It looks bad. It looks weak. And after Biden’s statements during the campaign (which went unrefuted by Obama), it looks duplicitous. It looks like a bait-and-switch. Maybe it’s Biden’s fault, maybe he was off-script when he said what he said, but a lot of people were paying attention when he said it and took it as honest. And it stuck.
I’m hoping to read that the negotiations as we understand them haven’t been reported accurately.
I keep seeing people making the claim that Obama made that offer, too, but it’s not true.
http://www.politicususa.com/bernie-sanders-rips-john-boehner-calling-cuts-disabled-veterans-benefits
.html
Boehner also called for a switch to the chained CPI, which would reduce annual cost-of-living adjustments for Social Security recipients, and for disabled veterans.
The date on that story is December 7. Boehner put Chained CPI for Social Security (and elsewhere) into his opening offer. The NYT and MSNBC ran big graphics comparing the two opening offers, and Boehner’s listed that proposal.