The White House has a page on their website that discusses their Chained-CPI proposal. I find it a little confusing, but at least some parts of it are clear. First, the offer is contingent on two things. It will be rescinded if the Republicans do not agree to a “package that includes substantial revenue raised through tax reform.” And it will have to be “coupled with measures to protect the vulnerable and avoid increasing poverty and hardship.”
You won’t find much about it on Google or the blogs, but the protections for the vulnerable are called “benefit enhancements.” Here’s where things get a bit fuzzy. It appears that people would begin receiving a benefit enhancement at the age of 76 which would max out when they reached 85. Then, if they reach the age of 95, they’d receive another enhancement. Because of these enhancements, the White House claims, “the Budget proposal would not increase the poverty rate for Social Security beneficiaries, and would slightly reduce poverty among the very elderly according to SSA estimates.”
So, taken on it’s face, the Budget proposal would reduce Social Security benefits overall, but it would not increase the poverty rate. In fact, it would reduce the poverty rate.
This is only a proposal, obviously, but we should discuss the proposal in a reality-based way. If you start talking about cat food, you probably are listening to the wrong people or you are just fighting a straw man. The administration has no intention of impoverishing anyone.
There are two remaining critiques of the proposal that have some merit, or are at least debatable. The first is that it is bad politics. This critique can take various forms. Some think it’s stupid to propose slowing the growth of Social Security because the Republicans won’t agree to it and then will run against Democrats who support it. Others think it’s poor negotiating to offer up something the other side wants without getting them to agree to giving something in return. Others think it hurts the party brand or causes needless internal divisions. I can’t anticipate every critique, but one of the dumbest is this idea that the Republicans will get mileage out of accusing the Democrats of attacking Social Security. They will attack us no matter what we do. Besides, every one of their leaders lined up to praise the president (however faintly) for offering Chained CPI. All of that is on tape.
Chained CPI is in the budget for two reasons. The White House doesn’t want to keep the sequester, and they think Chained CPI is the least painful thing they can give the Republicans on entitlements. If they don’t offer something, the sequester will continue it’s slow-motion destruction of the federal government and all of our most cherished programs for the needy. The second reason it is in the budget is because it is proof that the president is willing to invite the vociferous criticism of his base in order to make a deal. This is something Republican senators told him they didn’t believe he would do. They told him that they would believe he was serious if he put it in his budget. It’s a signal, nothing more.
The final critique is that this is just stupid and unfair policy. Maybe it won’t impoverish anyone, but why should Social Security recipients be the ones to help balance the budget? Why should they take any kind of haircut? Why not the rich? Why not defense?
Well, the answer to that is partly that the proposal does insist that the wealthy pay more, and partly that we can’t get the Republicans to do what they don’t want to do. They want this change in the Consumer Price Index. I’d rather give it to them than raise the retirement age. If it were up to me, I’d raise the highest marginal tax rate substantially, raise the capital gains tax, massively raise the percent of profits corporations pay in taxes, and make more income subject to the Social Security tax. But it’s not up to me. It’s not even up to the president. He has a country to run, and he has to have some Republican cooperation in order to run it.
I can’t tell you how bored I am by people who throw around terms like “neo-liberal” and whine about the unfairness of it all.
Even John Boehner can’t control his caucus, and yet the president is supposed to be able to give the Republicans a take it or leave it budget proposal that offers them nothing that they want and have them agree to it?
Some people need to grow up.
I don’t mind the progressive outrage about Chained CPI when it is self-conscious lobbying. But when it is diverted into the “Obama is the devil” crap, I get irritated.
