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December 19, 2012 9:20 AM The Unchained Gang

By Samuel Knight

Earlier this week, President Obama floated a Social Security-cutting proposal for fiscal cliff evasive action that shocked the Democratic Party. And by “the Democratic Party,” I mean Dems who didn’t watch the first Presidential debate.

The plan, which is known as “chained CPI,” is an alternative way to calculate inflation by assuming that consumers substitute expensive commodities for cheaper ones. The ol’ tuna fish for cat food switcheroo. It has been estimated to cut Social Security payments by a few hundred to a few thousand dollars annually, depending on the retiree’s age.

Although its highly unlikely that the President’s proposal will be voted on — Republicans have indicated they won’t support any tax increases for anyone making under a million dollars — he’ll have to fight like hell to have his own party swallow the deal, despite Nancy Pelosi’s proclamation, yesterday, that “Democrats will stick with the president” (although, she noted in an understated bit of caution, “maybe not every single one of them.”)

If criticism from Congressional Progressive Caucus co-chairs Raul Grijalva and Keith Ellison is any indication, the President’s plan to cut Social Security might be without at least 70 votes or so.

Grijavla — who, by the way, progressive activists want to see named next Secretary of the Interior should Ken Salazar steps down — told CNBC that he’d rather go over the fiscal cliff than accept a deal that reduces Social Security benefits.

Ellison issued a statement saying that he is “committed to standing against any benefit cuts to programs Americans rely on and tying Social Security benefits to chained CPI is a benefit cut.”

The Progressive Caucus’ rank-and-file and other leftish Dems don’t seem too amused by the proposal, either. POLITICO quoted Sherrod Brown, Jan Schakowsky, Ben Cardin, Jim McGovern, and Charles Rangel expressing fierce opposition to the plan, and co-founder of the Progressive Change Campaign Committee Adam Green warning Dems that they could face a tougher primary challenge if they support the President on this.

Samuel Knight is a freelance journalist living in DC and a former intern at the Washington Monthly.

Comments

  • Samuel Knight on December 19, 2012 9:53 AM:

    Great post and great name!

    Yesterday Congressional Democrats probably realized that they had made a huge mistake allowing the President with very different interests to negotiate on their behalf. The President in the last 4 years appears to be a 3rd way compromiser who really wants a Grand Bargain- and now is NOT running for re-election.

    Congressional Democrats are - and politically cannot touch the 3rd rails - Social Security and Medicare. The President just did - and now Congressional Democrats need to have a fairly simple response - sorry Mr President you can't negotiate on our behalf anymore - we need to be back in the room. Because we still control the Senate and 1 for 1 does not reflect the current balance of power.

  • Josef K on December 19, 2012 9:57 AM:

    As I asked yesterday, has there been any actual, clear reaction from the House or Senate GOP caucuses (they're pretty independent of one another, remember) to this idea? I know Cantor said he has the votes for...something, but so what?

    I'm holding off panicking until we hear something more definitive about who is offering what. Until then, we should at least flood the WH phone bank to make it clear to the President just how unwelcome this is.

  • c u n d gulag on December 19, 2012 9:57 AM:

    It didn't take me too many games of poker to realize that I had no business playing it.

    But still, I can't help but wish I'd end up in a game with just me and Obama.

  • Gandalf on December 19, 2012 10:23 AM:

    Just what precisely does social security have to do with deficits caused by govt spending? Am i completely oblivious here or isn't oscial security an entirely seperate issue?

  • lou on December 19, 2012 10:26 AM:

    Like to know where folks are finding all these "cheap" substitutes. I don't own a cat but I am guessing that even cat food ain't cheap anymore.

    Low inflation does not equate to low cost of living. Providing for the basics is beyond the reach of a lot of folks and is even stretching the means of about half the middle class.

    Congress needs to put itself on a cat food diet, provide for their own medical insurance, etc. and see what it is like to live in America these days before they go messing with the mess anymore.

  • Justin Russo on December 19, 2012 10:45 AM:

    Just what precisely does social security have to do with deficits caused by govt spending?

    Not a damn thing.

  • impartial on December 19, 2012 10:52 AM:

    Obama was given a very strong message by the people of this country that no changes were to be made to Social Security, Medicare or Medicaid. Apparently he chooses to ignore it.This is not a poor poker player; this is deliberate on his part. This is his proposal, no one else's. It shocked Democrats because they understood the people's will. Obama simply chooses to ignore it. No more excuses about re-election or second term etc. This is, unfortunately, the man we elected: apparently unsympathetic and uncaring about the poor, the elderly and the average American. This will not bode well for Democrats in the next election, either, but no matter. Obama will satisfy those whose approval he seeks.

  • T2 on December 19, 2012 11:04 AM:

    True, Obama has referred to "tweaking" SocSec and Medicare in the campaign. And the chained CPI is probably the least offensive "tweak" he can offer the TeaParty. Even Krugman was not flipping out on it. But it opens the door so Conservatives can march into reforming SocSec and Medicare in each and every negotiation from now on out.
    I'm more upset about this flat reversal of his pledge to the country to make $250,000 the cut line for taxes on the Rich. Going to $400k costs pretty much what the chained CPI would save.

  • Steve LaBonne on December 19, 2012 11:07 AM:

    I never cease to be amazed by Obama's ability to negotiate with himself- and lose.

  • KC on December 19, 2012 11:10 AM:

    Well, I'm not one of those people who emails their Senators everyday, if ever, but I sure as hell did yesterday. That a Democratic President would do this is unbelievable to me. And, that he would do this and possibly undercut the future electoral political leverage of his party is even more amazing. Does he want a Democratic House? A Democratic Senate? Does he just not care? I can't see his poll numbers staying high as more and more people--my generally non-political wife was not happy when she heard about this on her way home from work--hear about this gambit. Stupid.

  • rrk1 on December 19, 2012 11:24 AM:

    If Obama's offer to surrender is real, and not a poker move - a game about which he seems to know very little - then we have learned once again that what he says on the campaign trail and what he intends to do are very different. The Obama of the first term infuriated the left with his negotiations from weakness, and his search for the 'grand bargain'. Both in his presumed nomination of Chuck Hagel as Secretary of Defense, to the great dismay of AIPAC, and in the fiscal negotiations, Obama has an opportunity to show what he's made of, or that he's learned from his many failures over the past four years. We will know shortly, but the leopard doesn't change his spots or the zebra his stripes, and that is what I fear we will learn' unfortunately.

  • LAC on December 19, 2012 12:41 PM:

    Besides a standing engagement to sputter angrily on a MSNBC show of his choice, what does Bernie Saunders do? What does the "progressive" wing of the Democrat party do? Besides going "that's not it?"

    I love the pants on fire commentary and reaction to everything that is discussed in this fiscal cliff standoff. We have nothing firm yet, but here we go again.

  • Hannah on December 19, 2012 1:06 PM:

    I called my two senators' offices this morning and they are against any cuts. That would be Oregon's Wyden and Merkley.

    captcha: survive youAre

  • Gorobei on December 19, 2012 1:41 PM:

    Is there a reason that the idea of raising the cap on salary that is taxable for Social Security contributions to bring in additional revenue for SS is never discussed?

    Cynics might say it's because it would reveal that any future funding issues for SS could be easily resolved in this way and thus there is NO link between SS and the deficit.

  • John on December 19, 2012 2:29 PM:

    It is really irritating that the President could barely wait six weeks after the election before caving to the far right.

    The only connection I can see between SS and the deficit is this. SS loaned the government billions of dollars. If we ask for that money back then taxes go up or the deficit goes up.

    Simply by putting SS on the table the President supports the right wing idea that SS and the debt are linked.

  • howard on December 19, 2012 2:33 PM:

    i'm going to earn some unpopularity here, but c'est la vie.

    first of all, it's apparent to me that a fair number of lefties have never previously heard of chained cpi, including our sit-in host. (let me stipulate that i do not favor setting social security to chained cpi, just for the record).

    chained cpi is not based on "assumption" that facilitates game-playing: it's based on a simple, observable fact. people do substitute: when the price of hamburger goes up, people buy more chicken; when the price of chicken goes up, people buy more hamburger; when the price of both go up, people with constrained finances do indeed buy cat food.

    there's nothing "assumptive" about it, it's what happens, and it's a perfectly legitimate way of understanding inflationary pressures in the economy.

    the problem with chained cpi is not that it reflects a broader truth; the problem is that the things that people on social security buy are not the same as the things in the chained cpi basket of goods. 70-somethings are more likely to buy medicine (going up in price) and less likely to buy tablet computers (going down in price), and there is less substitutability with medicine.

    so if lefties are going to - quite correctly - crit switching social security to chained cpi, at least let it be for the right reason: it's not the concept, it's the basket of goods and services that's inaccurate.

    as for obama and poker: i know it's a popular thing to say but really: someone please show me what obama left on the table at any point in any negotiation.

    seriously, what better deals could he have gotten? single-payer: not a chance. a new high income tax bracket: not a chance. significant defense cuts: not a chance.

    even the fiscal cliff deal, annoying as the whole process was, was a good deal, not a bad one.

    so really, all you folks who are convinced that you could fleece obama at poker: there must be lots of obvious examples of how he left something on the table in negotiations. show me what it is.

    (my critique is that he wants to reach agreements that he doesn't need to reach, which is a whole 'nother matter than assuming he's some gullible loser being fleeced at the used car lot.)

  • jeri on December 19, 2012 2:59 PM:

    So, it turns out Obama is willing (perhaps even eager?) to push seniors off the cliff. This sneaky deal steals from retirees and loots benefits earned by many years of hard work. History is not going to be kind to Obama.

  • bdop4 on December 19, 2012 3:13 PM:

    Obama can only take it back if the GOP rejects it out of hand. For the time being, it's his STARTING POINT in these negotiations. What has the GOP given in return, and WTF are the defense cuts? Since social security has NOTHING to do with our debt, it should not even be on the table.

    Howard - there's not much difference between a lousy poker player and a gullible loser being fleeced at the used car lot.

  • howard on December 19, 2012 3:28 PM:

    bdop4: what i asked was a specific example of obama leaving something on the table in negotiations. just so i'm crystal clear, my argument is that obama has entered into negotiations he didn't need to enter into, but when we look at the actual agreements that have resulted, i want someone to show me precisely what he left on the table to earn the assumption that he's a poor poker player or used car buyer.

    jeri, i'm again going to stipulate, so the purism police don't pounce on me, that i oppose switching to chained-cpi.

    that said, you want to know what throws seniors off the cliff? privatizing social security.

    you want to know what's a bad idea? switching social securityi to chained-cpi.

    you need to be able to tell the difference if you want to be taken seriously.

  • square1 on December 19, 2012 5:41 PM:

    Howard: you are partially correct. Obama doesn't "leave things on the table". He's just not a liberal so he doesn't fight for liberal policies. He generally gets what he wants: Centrist policies. He just pretends that Repubicans twisted his arm to get there.

    This so-called "fiscal cliff" is nothing but a con job. The so-called cliff is actually a win-win: tax rates largely go back to Clintonion levels (win) and we get significant cuts to our massively bloated military budget (win).

    So, since we have nothing to fear from the bogeyman of the "fiscal cliff", why on Earth would Obama go along with SS benefit cuts? The answer could not be more clear: President Obama PREFERS SS benefit cuts to military cuts. Now that the election is over and we no longer need fear that being candid might lead to -- horrors -- a Romney presidency, can we finally be honest about Obama's agenda? The benefit cuts made real by the switch to CPI are not an accident. The entire purpose of switching to CPI is to cut benefits without appearing to cut benefits.

  • Doug on December 19, 2012 9:02 PM:

    An "unattributed" source has said something! Let the denunciations and wailing commence!
    Honestly...

  • smartalek on December 19, 2012 9:20 PM:

    "We have nothing firm yet, but here we go again."

    So what you are suggesting is that those of us who are horrified -- and rightfully so -- at the sight of the "leader" we recently re-elected (@ considerable effort, and in many cases expense) betraying both us, and the principles upon which he ran, *yet again,* with a policy proposal that would be devastating to many Americans, and politically catastrophic for our preferred party and institutions (permitting the Publicans to blame Democrats for the devastation, instead of the Publicans who promulgated said policy, without even having to lie about it)...
    You're saying we should just STFU about this travesty until it's already a done deal... and *then* complain about it?
    Yes, I'm quite sure that will work out well.

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