Oct 13, 2013

Sequestration At Issue

     From Jonathan Karl at ABC:
Democrats are still willing to accept a short-term deal to reopen the government at sequester spending levels (the Senate, of course, passed a 6-week extension on those terms), but now that talks are centered on funding the government into 2014, they are insisting on undoing some of sequester cuts. To Republicans, this is a non-starter, unless the sequester spending cuts are replaced with cuts to entitlement programs — and that is a non-starter for Democrats.   
     Note that a likely result at this time is a short term continuing resolution that would fund the government for a few weeks leading to a threat of a later shutdown over sequestration.  A Huffington Post article quotes a Democratic aide as saying that Democrats are trying to "break the will" of Congressional Republicans so that the Republicans would have no leverage in future negotiations over sequestration.
     Social Security desperately needs to get out from under sequestration.


Anonymous said...

Hey Charles, can you lend me some money so I can continue to pay for internet access and a new computer so I can read your blog? I promise to pay you back. Some day. When I can afford to. Unless I need to borrow more money from you to pay for internet access and a new computer so I can read your blog. But I will pay this back as well. Some day. When I can afford to. Unless I need to borrow more money from you to pay for internet access and a new computer so I can read your blog. But I will pay this back as well. Unless I need to borrow more money from you to pay for internet access and a new computer so I can read your blog. But I will pay this back as well. Some day. When I can afford to. Unless I need to borrow more money from you to pay for internet access and a new computer so I can read your blog. But I will pay this back as well. Unless I need to borrow more money from you to pay for internet access and a new computer so I can read your blog. But I will pay this back as well. Some day. When I can afford to. Unless I need to borrow more money from you to pay for internet access and a new computer so I can read your blog. But I will pay this back as well. etc. etc. etc..... PS I am a democrat, so you can trust me.

anonymous1 said...

That Social Security continues to be involved in negotiations is madness.
The responsibile party is the president and nobody but the president. It was the president who in 2011 introduced his grand bargain requiring "entitlement" cuts of one side balanced by incresed taxes from the other- in the name of deficit reduction.

Obama always saw himself as "above the fray" of partisan politics, as some grand arbitrator or mediator who would require each side to sacrifice its first born. He was willing to make the "tough choices" as part of "shared sacrifice" necessary to deal with long term debt. But when the president offered cuts to Social Security because "that's what republicans asked for, he crossed a red line. The president has no loyalty to Social Security the way a real democrat would. He personally concedes NOTHING when he offers up Chained CPI. He doesn't feel any sense of loss or pain or regret that he should- and that makes him particularly dangerous. This has always been the case, beginning especially with his Payroll Tax Holiday which many believe was a trojan horse the real purpose of which was to undermine Social Security.

What were seeing recently is republicans dropping, at least for now, attempts to defund Obamacare. So the focus shifts to Social Security and Medicare, putting these programs at greatly increased risk as part of what appears to be a one-sided grand bargain ripoff. Obama promised any cuts must be balanced with revenue, but revenue appears dead. So, how does the president get his cuts?? He needs his political cover to do that. Does he get some sort of token revenue increase consession from republicans where he then gives up Social Security to reopen the gov't?
Even more egregious, do cuts to Social Security and Medicare end up replacing sequester cuts? That would truly be madness, evil.

I recently read that the likelihood that Social Security is not cut, dismantled or privatized is entirely dependant on how hard Americans are willing to fight. I agree. Right now the feds are hoping to end the well-forecast shortfalls which have been occuring for a few years now- by cutting benefits. If they can achieve a money in equals money out balance and this is maintained, then the trust fund is never repaid. The $2.8T in bonds is never defaulted on, but the bonds are never redeemed either.

The bottom line is that the president and congress have absolutely no justification in involving Social Security in this. It's simply that it's "where the money is" and they intend to rob us of our earned benefits. They intend to target the elderly and disabled so more money is available for corporations, Wall Street and the rich.

It is true that Social Security has yet to be cut, and it's possible that it won't. The day that cuts of any kind including Chained CPI become law, even while the program enjoys a massive surplus, and even while the SSA says full benefits can be payed for 20 years, that would change everthing. The federal gov't would be guilty of inprecedented crimes against the people of the United States. Borrowed money would truly become stolen money.

I have to admit, I am disappointed with what seems to me to be a relatively timid pushback by the public. We have the moral if not legal high ground here. There is no discussion.

Anonymous said...

11:07, you can go to your public library, you know.

Don Levit said...

Anonymous wrote the sSA says the trust fund enjoys a massive surplus and can pay benefits for 20 years.
Can you go into a bit more detail of how the SsA describes these benefits will be paid, with no budget ramifications?
A surplus to me means there is extra money sitting aside simply waiting to be paid out over 20 years.
Where is all this cash residing?
And if there is all this cash set aside for Social Security beneficiaries, what do we have to fight for?
Don Levit

anonymous1 said...

This is addition to what I posted at 2:22. What do you think of this?

"The purpose is to create an atmosphere of great fear, chaos and confusion in which the public is then hoodwinked into passively accepting cuts to Social Security and Medicare".

Could it be that what we're seeing, literally everything since Obama came in, is staged? All choriographed, with both parties willing actors in a grand charade? The obstructionism, vitriol, tea party- all of it faked? If so, then the end result is already known.

So presumably, assuming the feds are not actually planning a partial default to shed debt, then the debt ceiling will be raised.

So the end result of the habuki is the cutting of Social Security and medicare. Shock doctrine stuff.

The thing that was always somewhat of a red flag for me was the presidents refusal, publically at least, to not be ready to use the 14th amendment if it came to that. Because how could the president, unless he actually planned to default, absolutely refuse to negotiate while at the same saying he wouldn't use the 14th?? Sounds like he all along PLANNED TO CAVE. Either that or he will in fact use the 14th amendment if necessary, and just isn't saying so for obvious reason.

Just can't let go of the possibility that this is all being faked.

Don Levit said...

The chaos and confusion results partially from the citizens' view of Social Security and the federal government's view.
Citizens believe they have earned benefits by paying in contributions.
The federal government considers only the current year's benefits as earned benefits. Any benefits beyond the current year are not considered as liabilities, for the benefits can be amended or even terminated. In addition, the FASAB, the acounting advisor for the federal government, considers any benefits paid to Social Security beneficiaries as non-exchange transactions. Those are transactions in which one party is compelled to pay in (the people), and the other party pays out due to its goodness and benificence (the Social Security trust fund).
Maybe this type of logic is what encouraged the Congress to allow the Treasury to steal the trust fund's extra FICA dollars, and use them for other government expenses (an illegal act, for the extra dollars were to be saved and used exclusively for Social Security beneficiaries).
Don Levit

Anonymous said...

Thanks for your insight Don

I do take a hard line when it comes to Social Security. We were all compelled to pay our FICA taxes over the decades and we expect our promised benefits. If we didn't pay, we would go to jail.
We fulfilled our part of the bargain, now the gov't must honor its obligations.

Digressing a bit, we all know that by law the treasury was to borrow and then spend the FICA overages issuing treasuries to the SSA. These bonds, like any, represent a promise to repay.
To me, at least, it doesn't matter at all that these are non-negotiable bonds and If I'm not mistaken represent intragovermental debt. What I believe to be important is that they are backed by the Full Faith and Credit of the United States and must be made good on. Another point concerns the trust fund itself. Is it or is it not a trust fund? If it is, then the feds are the only people who don't seem to know what a trust fund means. I've read that the federal gov't has no strict fiduciary resposibility when it comes to the trust fund. But it seems reasonable to expect that the gov't has at least a fiduciary-like responsibility to us- the beneficiaries. Why is it that someone in the gov't, a president, or a member of congress, somone didn't stand up and say: "Hey, it's 1995 or it's 2000, and the boomers retirements are coming up quickly. We need to keep at least some of the FICA surpluses liquid to deal with the boomers, especially considering we can't reliably forecast economic conditions decades in advance." So the gov't continued to spend surpluses dedicated to Social Security like drunken sailors, knowing full well the problems to come as a result of their gross irresponsibility. To me- It's clear cut- the federal gov't of the United States is thus guilty of massive breach of fiduciary responsibility. I once heard Alan Simpson say that the money's gone, it has been spent; and when pushed by the interviewer, said additionally that we ( the people) benefited from the spending of that money. When FICA tax money overages enabled the lowering of higher tax brackets, we the people benefited through "trickle down". When a trillion went to fund the Iraq war, we all benefited from the routing out of weapons of mass destruction. Sure we did.

Bottom line is, isn't it time to spend just a liitle bit less on the military, close foreign bases etc. so Social Security's promises can be kept? Can we bail out crooked banks and wall street, conduct questionable wars, grant tax cuts for the rich, big oil, pharma etc.- and then say we have to cut earned S.S. benefits? Where's the fairness in that, where's the humanity in that?

There a some that believe our 17T debt represents an irrecoverable situation. That's it's just a matter of time before the country goes down. Do the powers that be think cutting S.S. and Medicare can stop this? If that's what they really believe? As a major part of necessary austerity?

I believe the country isnt going broke and there's enough to pay full benefits.
Why have we stopped talking about the real solution, JOBS. If the gov't can't or won't help in this, we the people will need to get involved.

Sorry, rant over.

Anonymous said...

Don't let the agency fool you - even under sequestration, it has had plenty of money. Its management seems to have deliberately chosen to close or cut staffing in FOs in an attempt to give the public and Congress the impression that it's hurting for money - but behind the scenes at headquarters in Baltimore and Falls Church (especially in ODAR), it has been giddily hiring, promoting, and giving bonuses with the ample stimulus money that Congress gave it to spend a few years ago.

Sequestration at least slowed down ODAR's frenzied spending of stimulus money. SSA misguidedly believed the stimulus would continue as if taxpayer money grew on trees. Both Democrats and Republicans should scrutinize more carefully how SSA's management spends the money it's given.

Anonymous said...

I read Sunday eve "talks turn to sequester".

Reid says on Sunday: "Americans want congress to compromise".

WH says OK to include sequester as part of talks.

To Harry Reid: that compromise you say Americans want. It had better not mean that you intend to try to cut Social Security and Medicare to end sequester cuts. That's a "compromise" Americans definitely DON'T WANT.

What happened to no negotiating til the gov't was reopened and debt limit raised? What happened to that Obama?

Mr. Obama, wasn't it you that said that you would support entitlement "reform" only in the context of a balanced approach requiring revenue from the other side?

Mr. Obama, wasn't it you that wanted the sequester in the first place and didn't you then play up the consequences and suffering these cuts would cause to the extreme, including inviting Americans on stage with you?

Mr. Obama, wasn't it you that threatened to VETO any attempt to repeal the sequester by either party?

Mr. Obama, wasn't it you that in fact planned to use the sequester to force your own party into cutting Social Security and Medicare. That would be extorsion, no?

Mr. Obama, isn't it you that now wants to encourage a deal whereby you make concessions to Social Security and Medicare to reopen Gov't, raise the debt limit and reduce or eliminate the sequester?

Mr. Obama, you'd better not push those Social Security cuts when Social Security has a $2.8 trillion surplus.
Because that'd be illegal and that'd be immoral and that'd be targeting the elderly and infirm so the rich can get even richer and that'd finally expose you for the con man and fraud that you are.

The American people supported you and put their total faith in you. Don't let us down.

Anonymous said...

I'm not for changing the sequester. They knew what they were doing. They agreed to it. It was the bitter pill. Let it stand.