Sep 25, 2013

Chained CPI As Price For Debt Ceiling Extension.?

     A Businessweek article says that Republicans want cuts in Social Security's Cost of Living Adjustment (COLA),the chained CPI proposal, as their price for extending the debt ceiling.
     I'd love to see Republican members of Congress go on record as favoring chained CPI but my opinion is that virtually none of them would vote for it. Republican members of Congress love to talk in the abstract about cutting the budget, particularly "entitlements", but are afraid of voting for any specific cuts in the budget, particularly cuts in Social Security and Medicare, the biggest entitlements. Voters are all for cuts in the budget and in "entitlements" in the abstract. They just don't favor specific cuts, especially cuts in Social Security and Medicare. That's how we end up with sequestration, which applies a simple percentage reduction to most government programs. The damage from this approach isn't as immediately obvious to the public.


Anonymous said...

I think that very soon, a lot of people who voted for Obama are going to be very sorry, if they aren't already.

We all know Obama always wanted his Grand Bargain, where he promised that he would agree to "entitlement" cuts only if balanced by republicans agreeing to increased revenue. But the grand bargain is dead now- at least the revenue side. But Obama still wants his cuts to Social Security and Medicare.

So, with the fight over funding Obamacare in the mix, it appears the president may try to offer to trade "entitlement" cuts in exchange for raising the debt ceiling and funding Obamacare. No revenue.

I knew this guy was a fraud from the start. His Payroll Tax Hoilday was a trojan horse that sought to undermine Social Security while masquerading as stimulus. He gave up an estimated two-thirds of expected revenue when he caved on the Bush-era tax cut deal.

I don't believe much of what is being said by anyone in Washington these days, but here's what I do believe:

Barack Obama represents the single greatest threat to Social Security since the beginning of the program in 1935.
If they're able to pass Chained CPI into law, does anyone really believe that it will stop there? This has always been about the borrowing of the trust fund. They have no intention of paying us back.

Why we're not in front of the White House by the thousands is beyond me.

Anonymous said...

Obama's desire for a "grand bargain" first came to light in 2011, I believe.
He said he would only accept cuts to so called entitlements if the cuts were balanced by revenue. He has repeated himself on this a great many times since.

Could it be that he is about to break yet another promise?

The president (actually we the people) has a problem. The republicans have said: no more revenue. But the great Obama still wants Social Security and Medicare cuts. So what's he gonna do?

Answer: he's gonna go against his word, as in LIE. And if he actually proposes cuts Social Security and Medicare with no new revenue, and this becomes law, he will have told a whopper.

It's hard to know how this will play out, but he could offer cuts to entitlements to replace the sequester.
Exchanging cut for cut with no "grand bargain" revenue involved.

If something this egregious happens, a recall petition might be in order.

Anonymous said...

Wrt debt ceiling. Nancy Pelosi finally brought up the idea of using the 14th amendment today. The White House apparently quickly nixed the idea saying "Congress should do its job".
Struck me as being odd, as it did in 2011.

The White House continues to say that the president absolutely will not negotiate over raising the debt ceiling. Meanwhile, the republicans have drawn up a huge laundry list of what they want in exchange, which oddly, at least to me, included no mention of Social Security. It did however indicate a desire for increased means testing of Medicare. So no mention of S.S. Huh. Looks to me like they want to stay away from Chained CPI and anything to do with Social Security. If Obama wants it, he will have to be the one to bring it up by name and thus own any cuts.

Seems to me that if what we're seeing isn't just theatre, where the outcome is already known, that the president would have to be ready with a plan B, i.e. using the 14th, should that become necrssary. The fact that he at least seems to indicate he has no such plans, makes no sense to me. If the republicans hold strong based on
Obama's capitulating last time, and the eleventh hour approaches, the president will have to cave into republican demands once again-or use the 14th. Surely no responsible president would be willing to take the risk that the republicans would fold.
So it looks like either Obama actually plans to fold in advance, or he plans to use the 14th, and just won't say so. Another possibility is that behind the scenes negotiations will give the republicans their consessions via the replacing of the sequester cuts in exchange for agreeing in advance to back down on the debt ceiling.

I just can't let go of the feeling that most of what we're seeing is staged for media and public consumption.

The president wants cuts to Social Security and he also wants cover. "I had to do it". "It's not so bad, it could have been a lot worse". "The bad republicans made me do it". The republicans on the other hand want him to name it, offer to cut it, own it, then crucify him for doing it.

Anonymous said...

whatever you have to say about accounting gimmicks, etc. (I'm looking at you Don ;)), Social Security has brought in more money via FICA than it has spent over the course of its existence, and after a decade or two of boomer-heaviness, it will again shift from red to black.

It's so strange to me that we look at programs so short-sightedly--oh look, this program that has existed for nearly a century operating well into the black is now about to run deficits for a few years--quick, let's change it fundamentally.

Let's take a longview, my friends. Any graph can have scary drops if you set the axes for short periods...