HT Save Social Security and Fuck the Repugs Over At the Same Time

On the principle that the best defense is a good offense, the way to save Social Security from the Austerity Hysterics demanding benefit cuts is to counter with demands to increase benefits and make billionaires pay for it.

Ed Kilgore at Washington Monthly:

The idea has been kicking around think tanks (notably the Economic Policy Institute) and the blogosphere (particularly Atrios, who’s made this a personal crusade) for a while, but now is getting some serious buzz in the Senate: it’s time not to trim but to expand Social Security benefits.

Unions and progressive activists are uniting around Tom Harkin’s bill to boost benefits by $70 a month for all Social Security recipients (and more for those heavily dependent on benefits for retirement security), increase (rather than decrease, as the “chained CPI” tentatively accepted by the White House as part of a not-going-to-happen “grand bargain” would do) the cost-of-living adjustment formula, and pay for it all by eliminating the regressive payroll tax cap for the program.

It’s obviously a good move for progressives to insist on looking at Social Security not as a part of the “entitlement problem,” but as a crucial part of a system of retirement security that’s been deeply eroded by recession-decimated assets and the shift in private-sector pensions from defined benefit to defined contribution plans.

But there’s a more purely political angle that’s now being emphasized by Sen. Sherrod Brown (D-OH), as discussed today by Greg Sargent:

Brown argues that if Republicans push for Social Security benefits cuts as part of any deal, Dems should counter with the Harkin proposal to shift the terms of the debate in a Democratic direction. Democratic priorities, he said, should be centered on the idea that declining pensions and wages (and savings) are undermining retirement security, and added that the public strongly opposed gutting social insurance.

“The situation for seniors is only going to get worse, because the assault on pensions and wages is making it more and more difficult for a worker to save for the future,” Brown said. “Why are we having a debate over how much we are going to hurt seniors? The debate should be over how we should structure a pension for seniors that will help them. Why would we play on their playing field? Democrats need to play offense here. Force Republicans to say what it is they really want to do. Republicans just don’t like social insurance.”

Raising benefits and eliminating the income cap is the morally correct thing to do. It's the economically sound thing to do. And it's the politically smart thing to do.

Use this plan as a Democratic candidate litmus test. Candidates who reject it are repugs, not Democrats. Candidates who claim it is not a good idea on moral, economic or political grounds are liars. And candidates who bleat that it's "impossible in today's Congress" are cowardly worms and wastes of oxygen.

Speaking of which, I wonder what Alison thinks of it.

Increase Social Security and Medicare or No Deal

If the worst-case scenario in the current D.C. clusterfuck is a default and resulting economic meltdown, the second-worst is a deal - Obama's long-sought "grand bargain" - that avoids default but requires cuts in Social Security.

Kathleen Geier at Political Animal:

Today’s New York Times features an important, and frightening, editorial about the alarming growth in extreme poverty among the elderly. According to the Times:

In analyzing the recent Census Bureau report on poverty, researchers at the National Women’s Law Center found that from 2011 to 2012, the rate of extreme poverty rose by a statistically significant amount among those 65 and older, meaning that a growing number of them were living at or below 50 percent of the poverty line. In 2012, this was $11,011 a year for an older person living alone.

$11,011 a year is “extreme,” all right — how can a person survive on such a miserably low income? Women, as usual, are disproportionately represented among the extremely poor in this age group. The Times also mentions that another report, The Census Bureau’s American Community Survey, shows an increase among the elderly poor as well, “from 9.0 percent in 2010 to 9.3 percent in 2011 and 9.5 percent in 2012.”

This is a horrifying trend. It’s clear that our retirement system is a mess. The 401(k), which a lot of people never even had access to in the first place, was an experiment that has utterly failed us. Social Security has long been a bulwark against poverty among the elderly, but clearly it’s not enough, and it needs to be increased — dramatically. So that’s exactly what the Times is going to tell us, right?

Except — no. Here’s what they say the richest country in the history of the world should do in response to this impending cat food dystopia: nothing. No, really. This is what the editorial says, in its entirety, about how we as a society should react to the specter of growing numbers of old people eating out garbage cans:

For now, the best policy response is to do no harm. For example, budget proposals to cut Social Security’s cost-of-living benefit, ill advised in any case, would be especially unwise and untimely.

I’m happy that the Times covered this issue, at least — it’s an important one, and I’m afraid it will not be going away. But “do no harm” hardly cuts it as an effective response to this problem, policy-wise, politically, rhetorically, or morally.

The problem is simple: the Social Security is too damned low. Progressives must keep hammering this message ad infinitum. If we do, maybe even out-of-touch elites like the New York Times will get it. If we don’t, we can almost certainly look forward to a whole lot of Meow Mix in our not-so-golden years.

Or more simply:

As for Medicare, here's Alan Grayson:

Of course you can make changes [that are not benefit cuts] to the program, and then make the program better. I'd like to see Medicare cover eyewear. I'd like to see it cover hearing aids. I'd like to see it cover dental work. As far as I know, most seniors have eyes, ears and teeth. [Laughs.] I think these things should be covered. I'd like to move in that direction. That would improve these programs. But in terms of cutting benefits, no - that's not fair.

Cat Food vs. Tip Money Is Not A Balanced Approach

We won't get anywhere near "balance" until the motherfucking rich have paid back the tens of trillions of dollars they have stolen from the middle class and poor over the last 30 years.

Then we can talk about "shared sacrifice."  But not until.

Digby:

But it's the second half that really gets me and always has --- the idea that asking wealthy people to pay some more in taxes is somehow equivalent to taking money out of the hands of people who have basically nothing. It's in no way equivalent. Giving up a thousand dollars a year really is a sacrifice -- it's a painful reduction in their ability to live in dignity. Asking a millionaire to pay a few thousand more in taxes is completely meaningless. It's not a "sacrifice" its a tip.

I cannot understand why so many Americans accept this formula. No, cutting the meager benefits of people who are barely getting by is simply not "balanced" by taxing millionaires. If it is, the whole concept of shared sacrifice is turned on its head.

Anyway, we've featured this video on the blog before, but I think it's a good idea to feature it again in this context:

Ask yourself if it makes sense to ask some of the most vulnerable populations, people who are living on very little money, to cut back in exchange for something from people whose accountants will barely even notice. It's a very sad comment on our values and priorities.

Killing Ourselves Now Because Somebody Migh tTry to Kill Us Some Day

Never thought I'd have to say it to this administration, but:

How stupid do you think we are?

Charles Pierce:

Now, we have a Democratic administration, empowered by a solid re-election, that is proposing to its most loyal supporters that they support at least a partial sellout of the Democratic party's greatest legacy because, some day, a Republican president might do something much worse. (As though said imaginary Republican president won't go ahead and do much worse anyway, and claim a national mandate for it while he's at it, and eventually find a way to blame "a Democratic president" for having launched the process in the first place.) I literally never have heard this argument made in any political context. I certainly never have heard it from anyone in an incumbent administration. If this is your rationale for making policy, what in the name of god is the point of running for office in the first place? Nobody's president forever. You get elected. You enact the policies on which you ran, and of which the voters evidently approve. If, one day down the line, the voters decide to approve someone else, and someone else's policy, that's just the way it has to go. Caveat emptor, and all that. You certainly don't decide to enact policies based on their being the most palatable variation of something an imaginary future president might do. That's just nuts. On the national ecomony, we've abandoned Keynes, and Greenspan, and Laffer, and we've decided to cast our lot with Nostradamus.

We will be told — and already have been — that this is simply the president's positioning the Republicans into a corner. But that's not consonant with the quote above. That quote isn't about what's happening now. It's about telling people that they have to accept some pain now because, otherwise, they'll face agony later at some unspecified time and the hands of some unspecified president. There is only one reason for anyone in the White House to adopt this rationale, and there is only one reason for anyone in the White House to float this rationale in public. The only plausible reason for adopting this rationale, or for floating it in public, is because this is what you really want to do in the first place and you are groping for a plausible alibi. The only plausible reason for it is that you've bought the deficit-hysteria to the point where you believe that you have to do this thing right now. Nothing else makes sense, unless the White House mess has changed where it shops for its mushrooms.

Social Security Cut Really a Middle-Class Tax Hike

It's not enough to fight each fuck-the-99-percent proposal one at a time any more.  We have to attack the fundamental idea that has taken over both political parties that what is good for the country is only what helps the rich.

Digby:

Most of you know that the Chained-CPI is a cut in Social Security, disability and retirement benefits. But how about this?

Yeah, it's a backdoor tax increase that falls disproportionately on those making between 20 and 50 thousand dollars a year:

The group getting the biggest tax hike is families making between $30,000 and $40,000 a year. Their increase is almost six times that faced by millionaires. That’s because millionaires are already in the top bracket, so they’re not being pushed into higher marginal rates because of changing bracket thresholds. While a different inflation measure might mean that the cutoff between the 15 percent and 25 percent goes from $35,000 to $30,000, the threshold for the top 35 percent bracket is already low enough that all millionaires are paying it. Some of their income is taxed at higher rates because of lower thresholds down the line, but as a percentage of income that doesn’t amount to a whole lot.

All told, chained CPI raises average taxes by about 0.19 percent of income. So, taken all together, it’s basically a big (5 percent over 12 years; more, if you take a longer view) across-the-board cut in Social Security benefits paired with a 0.19 percent income surtax. You don’t hear a lot of politicians calling for the drastic slashing of Social Security benefits and an across-the-board tax increase that disproportionately hits low earners. But that’s what they’re sneakily doing when they talk about chained CPI

Oh, and let's not forget. That tax hike, by law, goes to pay for George W. Bush's wars not to shore up Social Security. And since these benefits cuts only add a very small amount to the Social Security trust fund, we'll be back with another campaign to cut more within a couple of years:

SNIP

President Obama says he wants to take this "off the table."  Does that look like it will be off the table?
In fact, it does almost nothing top fix the problem it purports to fix while forcing Democrats to betray their principles.

If people care about the future of Social Security, benefits should be expanded, and the cap on earnings should be lifted so that the wealthy have to pay as much of a percentage of their wages as everyone else does.  (In fact, I'd be willing to guess that even average people would be much happier to pay taxes for Social Security and medicare than Pentagon overruns.) Cutting benefits is just a nail in the coffin of our vital and necessary Social Security system.  I'm sure the Pete Petersons of the world are very pleased.

Just Say No To the False Choice

No cuts in domestic spending. No Grand Bargain. No sequester. No cuts to Social Security and Medicare.  Just no, motherfuckers.

Digby:

Essentially, as before, the White House and the Democratic centrists are holding hostages but this time they're basically telling the progressives that a hostage is going to get shot no matter what: Head Start and food inspections today or the elderly, the sick and the veterans tomorrow and they have to choose which one.  Why should progressives bear that responsibility? They didn't get us into this mess.

I say they should just say no. Republicans do it all the time and everybody just throws up their hands and says, "well, I guess we'd better figure out something else." They should hold fast and say "the sequester sucks and so does the Grand Bargain and we don't support either one." Most of the progressives didn't vote for the sequester in the first place and bear no responsibility for it.  (And even those who did have no obligation to defend the monster that everyone assured them had no chance of ever becoming law.) This is a failure of the leadership of both parties and progressives are not required to betray their most fundamental values and defend any of these ridiculous cuts to anyone.

Just say no.  The "sequester vs Grand Bargain" is a phony construct made by man, not God, and there's no reason on earth why any progressive should be forced to own either one. Find another way.

 Here's one: Soak the rich. Restore Eisenhower-era taxes of 90 percent on the parasitic rich, pour the revenues into creating 10 million government jobs and doubling the social safety net.

Done.

Last Chance to Stop the Grand Bargain Murder of Social Security

For the moment, Obama's surrender still contains one condition that congressional repugs will refuse: tax increases. Pocket change for the parasitic rich, but still enough to make repug rejection fairly certain.

Which means there's still time to throw the brakes on this thing before Obama murders the middle class by surrendering unconditionally.

If your Senators and Reps are repugs, tell them you don't want Obama to get credit for cutting spending and fixing entitlements. If you're from Kentucky, tell Rand Paul you want him to get credit for that after he's inaugurated President in four years.

Susie Madrak at Crooks and Liars:

It's official, folks. The Grand Bargain is here.
Time to take action. If we don't unleash holy hell, this will go through.

Even though we've been warning you for a long time, it's still hard to believe that a Democratic president is offering up the crown jewels of Democratic policy -- and for a mere pittance. We need to fight back. You can call or write your congressperson or the White House if you want, but it's most useful to start with your senators. Tell them you're not willing to starve Granny to make the Republicans happy.

We're going to concentrate on the Senate, because they'll probably send a bipartisan bill to the House in order to bypass Boehner's Hastert rule. Even if you called last week, call today. Be prepared to call every day for the next week. (Here's the link.)

President Obama will release a budget next week that proposes significant cuts to Medicare and Social Security and fewer tax hikes than in the past, a conciliatory approach that he hopes will convince Republicans to sign onto a grand bargain that would curb government borrowing and replace deep spending cuts that took effect March 1.

Obama will break with the tradition of providing a sweeping vision of his ideal spending priorities, untethered from political realities. Instead, the document will incorporate the compromise offer Obama made to House Speaker John A. Boehner (R-Ohio) last December in the discussions over the “fiscal cliff” – which included $1.8 trillion in deficit reduction through spending cuts and tax increases.

“The president has made clear that he is willing to compromise and do tough things to reduce the deficit,” a senior administration official said, “but only in the context of a package like this one that has balance and includes revenues from the wealthiest Americans and that is designed to promote economic growth.”

Erik Loomis at Lawyers, Guns and Money:

Republican extremism and a complete unwillingness to deal with the Kenyan usurper is the one thing keeping us from cuts to Social Security:

SNIP

It’d be nice if Obama realized for once that the Republicans will never compromise with him unless he completely capitulates to their agenda, with its ever rightward shifting goalposts. Pretending to be a nice moderate Republican is not going to work. Nor should it since if a Democratic president can’t stand up for Social Security, what can he stand up for?

Don't make me answer that.

Enough With the Deficit Hysteria

Like I keep sayin', the only thing wrong with the deficit is that it's too small.  We're still in a recession, which requires large spending by government to boost demand and thus grow the economy.  That might be of slight concern if interest rates were high, but they're not; they're so low investors are actually paying us to take their money.

But the deficit hysterics never let facts and reality stand in the way of fear-mongering.

Kevin Drum at Mother Jones:

Republicans have been demanding action on the deficit practically from the minute Barack Obama was inaugurated. Over the past couple of years they've finally gotten it. Spending has been slashed, the federal deficit is declining steeply, and the 10-year deficit projection has been reduced by $4 trillion. So now, having gotten so much of what they wanted, does this mean Republicans are ready to soften up a bit on their deficit mania? You jest, of course. Jon Cohn rounds up the latest news:

Paul Ryan is about to unveil a new proposal for how the government should spend its money. According to multiple media accounts, it will look a lot like the budget plans he's produced before, the ones that famously called for radically downsizing the government. The main difference? The cuts in this proposal will be even bigger.

....With this new budget, Ryan doesn't appear to be offering new concessions. On the contrary, it looks like he's making new demands. And plenty of Republicans seem to think this is the right thing to do. That's perfectly within their rights: They believe it's best for the country. But it's a reminder that Republicans aren't sincerely interested in compromise for its own sake—or in taking more moderate positions on the issues. Yes, the voters delivered a pretty devastating verdict about this agenda just a few months ago. But if the number two guy on the ticket doesn't seem to care, why should the rest of them?

This comes as no surprise. When Ruth Marcus asked Ryan a few days ago if Republicans were planning to give us all a breather and avoid a showdown over the upcoming debt ceiling cliffhanger in April, he was unmoved: "Not this time," he said, "We're not leaving this session of Congress until we have a down payment on the problem."

So apparently conservatives are right: appeasing fanatics doesn't work. It just makes them determined to demand even more. Perhaps it's time to listen to them and adopt a new strategy.

Digby:

Jared Bernstein has posted some very important information that one can only hope both the White House and the Democrats are aware of and prepared to change direction because of.  It shows that our runaway medical costs are actually slowing down and he posits that there's good reason to believe that it's permanent rather than transitory:

My colleague Paul Van de Water recently noted that CBO’s 10-year forecasts for the growth of Medicare and Medicaid have come down by $500 billion relative to those from a few years ago. We don’t yet know whether any of this will last—whether we’re looking at another “whoops” moment. But because the initiatives ticked off above are targeted at changing highly inefficient incentives embedded in the delivery system, using technology to improve productivity (which typically lowers costs), and providing better oversight, they certainly have the potential to be lasting. And remember, while the recession is surely playing some role in recent cost savings, that role is surely less pronounced in Medicare and hospital readmissions.

So my guess is there’s something lasting going on here, and that means the doctor has just prescribed a very large chill pill for those who want to whack away at Medicare and Medicaid and CHIP because “they’re going bankrupt…bankrupt I tell you!” They’re not, and our energies would be much better spent on careful research on the factors behind these recent cost trends and how we can build on them. The goal is not to diminish these extremely valuable programs. It’s to ehhance their efficiency so as to ensure that they remain a solid part of American social policy.

Read the whole thing for the details. But the upshot is that we have just enacted a bunch of reforms to the system that are having an impact. Who knows if it will work over the long term, but the idea that we need to slash the hell out of our "entitlements" before all the data is in, is just daft. In fact, this whole discussion has been daft from the beginning. From the idea that austerity was a good idea in a downturn to the idea that we would make major changes to our health care system and then fail to see how they work before deciding that costs are too high, this rush to deficit cutting has been a disaster.

As Bernstein says, our leaders need to take a chill pill. We need to take a break from all the unnecessary Grand Bargaining and all the politicians need get out of this rut of thinking the world will end if they don't cut spending. Obama's legacy is going to be Obamacare. He doesn't need the grand bargain, it was always stupid. And if Obamacare succeeds in reducing the deficit as Bernstein's chart indicates may be happening, he can take credit for that too. That's a lot. It's enough.

 As Charlie Pierce always writes:  Fuck the Deficit. People Got No Jobs.  People Got No Money.

Fight the Social Security Lies

They're coming fast and furious now, as the austerity hysterics get desperate to force a Grand Bargain that will gut what's left of the New Deal and Great Society.

Digby:

... this fiction is believed among the cognoscenti and therefore extremely destructive. Dean Baker suggested via twitter that you send this fact-filled post called Trusting The Fund: A Citizen's Guide To Social Security's Trust Fund to everyone you know so they can understand reality. (Not that it will do them much good because you'll never get the gasbags and the politicians to understand it, but still ... it's our duty to try.) It starts off by explaining the very important and significant distinction between deficits and debt --- and why you should be very skeptical of people who mix them up. Then it breaks down all the misconceptions about Social Security.

Replace the Austerity Sequester With Reality-Based Budgeting

Of course there's an alternative beyond the false choice of defense cuts vs. entitlements, and of course the Congressional Progressive Caucus has it.
 
Down with Tyranny:

Today, the other kind of Democrat-- 10 of the smartest, most fearless and most dedicated progressives in Congress, Raul Grijalva (D-AZ), Keith Ellison (D-MN), Ed Markey (D-MA), Judy Chu (D-CA), Barbara Lee (D-CA), Jim McDermott (D-WA), John Conyers (D-MI), Jerry Nadler (D-NY), Jan Schakowsky (D-IL) and Yvette Clarke (D-NY)-- proposed The Balancing Act a plan to repeal sequester while achieving balance in long-term deficit reduction between revenue and cuts while investing in job creation-- and paying for the whole thing with savings from balancing defense and non-defense cuts. It's a serious answr to Ryan's unserious demand for failed European-style Austerity.

    THE MATH:

•  Round 1: $1.7 trillion in cuts
•  Round 2: $737 billion in revenue
•  Round 3: The Balancing Act

     * Achieves 1:1 Revenue and Cuts-- by replacing srquester ($948 billion) with revenue

         * Achieves 1:1 Defense and Non-Defense Cuts- by eliminating $278 billion in wasteful         Pentagon spending and investing it in job creation
         * Job investment provisions would create over 1 million jobs

•  Long-term deficit reduction from the three rounds of over $3.3 trillion

REPLACE SEQUESTER WITH REVENUE:

•  28 percent limitation on certain deductions and exclusions ($428 billion)
•  Close carried interest loophole ($17 billion)
•  Close loopholes for jets and yachts ($4 billion)
•  Close international tax system loopholes ($161 billion)
•  End fossil fuel subsidies ($94 billion)
•  Close exclusion of foreign-earned income loophole ($71 billion)
•  Close corporate deduction for stock options loophole ($25 billion)
•  Close Estate Tax loopholes ($23 billion)
•  Close S Corporation loophole ($13 billion)
•  Reduce corporate meal and entertainment deduction to 25% ($70 billion)

INVEST IN JOB CREATION:

•  Making Work Pay extension for one year ($61 billion)
•  Support for teachers and school modernization ($55 billion)
•  Transportation infrastructure investments ($160 billion)

CUT PENTAGON WASTE:

•  Rep. Markey's Smarter Approach to Nuclear Expenditures ($106 billion)
•  Limiting excessive contractor compensation ($50 billion)
•  Relocate troops from Europe to the U.S. ($3 billion)
•  Reduce troops levels 4% by attrition ($48 billion)
•  Limiting the purchase of Virginia-class nuclear subs to one per year ($22 billion)
•  Replacing F-35s with F-18s ($23 billion)
•  Eliminate one Ford-class carrier ($14 billion)
•  End production of the V-22 Osprey ($9 billion)
•  Limit military bands ($2 billion)
•  Reduce General and Flag officers to Cold War standard ($1 billion)

Finally, a serious response to Paul Ryan's very unserious Austerity Agenda. I only have two quibbles. Can we just reduce military bands by $1.5 billion and... well if we reduce corporate meal and entertainment deductions to 25% does that mean there will be no more strip joints and high-priced hookers? And what happens to Spago, Alain Ducasse, Alinea, Joe's Stone Crab and Katsu Ya?

"A balanced, comprehensive way"

It's not "balance," Mr. President, when the repugs refuse to budge but you just keep sliding toward them. And the worst possible thing you can do in a recession is cut government spending. The word you're looking for is "surrender." "Catastrophic surrender."



Full transcript here.

The Hoax of Entitlement Reform

Via Down with Tyranny:

"We can't just cut our way to prosperity."

Your definition of  "balance," Mr. President, makes me wonder if you've forgotten how to teeter-totter.

As David Roberts tweeted last month:

Imagine a see-saw, with a person on one side and another person in the middle, favoring "balance." See the problem?

Full transcript here.

No, We Don't Have a Spending Problem

We've got a motherfucking-liars-are-lying-about-fucking-their-mothers problem.

 

Samuel Knight at the Washington Monthly:

Alan Simpson and Erskine Bowles - co-founders of the corporate lobby Campaign to Fix the Debt - were on Meet the Press (last week). I couldn’t drag myself to watch it because I am sick and tired of hearing every oligarch’s favorite lackeys argue that the national debt is a reason to gut the welfare state. Which is exactly what they were doing this morning:

“Yes, the president has taken some steps forward on the entitlement programs, but has he done enough? Absolutely not,” Bowles said.

But they and their disciples couldn’t be more wrong. The U.S. government has no “spending problem” from a macroeconomist’s point of view. Of course, the country can’t indefinitely continue to borrow more than it earns, but the idea that we must somehow tackle debt by cutting spending — and do it right now — is voodoo economics of the highest order.

For spending to be an immediate problem, it would have to be problematic. And the primary reason that government spending is problematic is due to “the crowding out effect.”
I could find some haughty economist to quote on the issue, but for simplicity’s sake here’s Wikipedia:

“…crowding out is a phenomenon occurring when expansionary fiscal policy causes interest rates to rise, thereby reducing investment spending.”

Yet interest rates are rock bottom and aren’t expected to rise anytime soon, and demand for U.S. Treasury bonds remains high.
 
Thus, government spending appears to be having no averse effect on financial markets, which, according to Treasury yields, actually seem to think that lending the U.S. government money is a wise idea. The debt “crisis” is only caused by a “spending problem” when one considers government spending to be an issue from an ideological standpoint.

If Simpson and Bowles were serious about tackling the debt without completely undermining the economy, they’d advocate higher taxes on those that can afford to pay more. Corporations are awash with cash, and capital is taking a larger slice of the pie than ever. But aggregate demand is lagging, and to undermine social safety nets would further weaken it. Sound economic policy would, therefore, have the rich finance deficit reduction — if it must be done in this fragile economy.

Actually, we do have a spending problem: we're not spending enough to create jobs, rebuild infrastructure, restore public employment and lift people out of poverty.  That's the only way out of this depression.

Obama Won; The Working Class Lost

In the end, this is what we're left with: repugs with nothing left to lose - having already agreed to higher taxes on the rich - holding the debt ceiling hostage and demanding trillions of dollars in spending and "entitlement" cuts that will gut Social Security, Medicare, and the last remnants of a social safety net.


On the other side, President Obama with everything to lose, including the entire economy if the repugs won't raise the debt ceiling, and nothing to bargain with.

Here's his choice: Kill the New Deal and Great Society, or kill the entire economy. What do you think President No Liberal Principle Is Worth Standing Up For is going to do?

Ed Kilgore:

TNR’s Noam Scheiber probably reflects the current views of a majority of progressives in expressing less than total confidence in the president in this next war of nerves and threats and hostage-taking:

Put all that together and here’s what the fiscal cliff accomplished then: It affirmed to Republicans that Obama will do pretty much anything he can to avoid a debt default, regardless of what he says. It affirmed the White House anxiety that the GOP might not blink before we default. To put it mildly, that’s quite an asymmetry. I want to believe the president can get through the next stage in this endless budget stalemate without accepting some of the more dangerous spending cuts conservatives are demanding. But at this point I’m having a hard time seeing it.

Especially when the last-minute deal on revenue is entirely insufficient.

Kevin Drum:

And there's not much question we're going to need more revenue. I'll have more on this in a couple of days, but unless we want to abandon any pretense of decent care for the elderly—and we don't, no matter what Paul Ryan believes—we're going to need to raise substantially more tax revenue in the future. But if Republicans remain dead set against tax increases, and even Democrats are unwilling to raise taxes on the middle class, how is that going to happen? As things stand now, not only are tax increases on the middle class unthinkable, but Obama was even forced to cave in on the estate tax thanks to Democratic nervousness about offending the ultra-rich.

In one sense, I guess it's not worth borrowing trouble. If we're going to need more tax revenue in the future, let's deal with it in the future. Maybe political pressure will force Republicans to capitulate. Maybe Democrats will take over Congress. Maybe a latter-day John Galt will come along and invent a free energy machine and none of this will matter.

Still, over the next 20 years we're probably going to have to increase taxes by something like five points of GDP. That's an increase of nearly a third in the federal government's tax haul, and we just fought a battle royal just to get something like half a point of GDP. Eventually, something will have to give.

Jon Walker at Firedoglake cites Obama's own promise Tuesday that he will seek to cut the deficit, even though nothing could be worse for the economy. 

Allison Kilkenny at The Nation:

Economist Dean Baker writes that this entire debate has been part of a larger distraction “at a time when by far the country’s most important problem remains the economic downturn caused by the collapse of the housing bubble.”

“The obsession with budget deficits is especially absurd because the enormous deficits of recent years are entirely the result of the economic downturn,” he writes at CNN.

Furthermore, profits have returned to prerecession levels. Bakers points to the Campaign to Fix the Debt, an organization comprised of many of the country's richest and most powerful CEOs that pushes the case for cutting Social Security and Medicare as well as lowering the corporate income tax rate.

SNIP

“CEOs from both political parties have openly come together to demand cuts in Social Security and Medicare, two programs that enjoy massive political support across the political spectrum,” Baker writes. “The wealthy are joining hands without regard to political affiliation to cut benefits that enjoy broad bipartisan support among everyone who is not rich.”

Baker reiterates that we dot not have a chronic deficit problem, and the big deficits are the results of a collapsed economy, which can only be fixed by the president and Congress supporting programs that will put people back to work and bring the economy back up to speed. The 99 percent having money to buy goods is the only way to get the economy rolling again, which won’t happen by Congress giving massive tax breaks to a handful of billionaires who don’t create jobs for anyone other than themselves when they create nefarious Fix the Debt committees.

In fact, Baker writes, it’s necessary for the government to run large deficits!

Ideally, the money would be spent in areas that will make us richer in the future: Education, infrastructure, research and development in clean energy, etc. There is just no way around a large role for the government given the economy’s current weakness.

Actually, that last point isn’t true. There is a way around that role, and that’s Boehner and Company’s plan: the anti-state—the resource vacuum that slashes earned benefits, worsens the recession and leads to infinitely more suffering for the 99 percent.

Boehner made his intentions clear following the fiscal cliff deal:

“The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable for the ‘balanced’ approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt.”

That repug majority in the House revealed its true self in the refusal to hold a vote on emergency relief for victims of SuperStorm Sandy.

As David Atkins writes:

Once again, we're confronted with a situation in which Democrats aren't willing to simply let the country go to hell in a handbasket, while Republicans are. That gives Republicans the advantage in any negotiation going forward until and unless Democrats make the necessary rules changes to prevent Republicans from operating a tyranny of the minority.

And he warns:

Still, the thought of this Republican Congress negotiating with Grand Bargain-desperate Obama over the debt ceiling is a terrifying prospect. It's going to take massive progressive mobilization over the next two months to block the worst from happening.

"We just can’t afford a politically self-inflicted wound to our economy"

We can afford that a lot easier than we can afford a Grand Bargain that destroys Social Security and Medicare in return for pocket change from the rich, Mr. President.



Full transcript here.

Stop Negotiating and Start Running for the Fiscal Molehill

Don't be fooled by the apparent collapse of the House repugs yesterday - they'll be back next week, even meaner and stubborner for having been made to look like fools.

And so will President Obama, more eager than ever to get a deal - any deal, even one that destroys Social Security and Medicare - before Dec. 31.

As Karoli at Crooks and Liars wrote earlier this week: 

All anyone has to do is start with what we know: Republicans do not negotiate in good faith ever, and they only negotiate at all when they are pressed to the wall. Therefore, we can all assume this is a lot of smoke with lots of mirrors and absolutely no sincerity.

I am of the belief that absolute clarity is needed in order to get this done in an orderly fashion. That means no muddling up the issues. It is absolutely driving me crazy to see the narrative driven by media that Medicare, Social Security, tax reform and the debt ceiling MUST be wrapped up in a tiny little neat package by December 31st.

No. Nothing need be wrapped up by December 31st. Absolutely nothing. I've heard arguments for why they should be, and so I'll take them one by one:

• Unemployment extensions expire 12/29: These are urgent. I am not minimizing that. But they are separate from any discussion about tax reform, tax rates, and tax cuts. There is no relationship between them and they should be addressed separately from the other issues. If the extensions are renewed in the first weeks of January, it will not do harm to recipients, and can retroactively be corrected.
• But the debt ceiling. ZOMG, the debt ceiling: President Obama needs to have us clamoring and echoing him on this: the debt ceiling is UNRELATED to the tax revenue question now and forevermore, and we should be prepared to have Republicans shut down government over it. Let them take the hit for their folly. Never before 2011 was the debt ceiling a serious hostage, and it shouldn't be one now.
• More stimulus! - The stimulus package the President is suggesting won't even cover Hurricane Sandy relief, which the sick GOP cheapos in Congress have already delayed and dithered about for weeks now. Seriously. President Obama is asking for $56 billion in stimulus. Sandy relief is expected to cost around $60 billion. It's just math.
• Better a Democrat shore up Medicare, Medicaid and Social Security, right? Sure. But certainly not in the name of deficit reduction or tax reform. Again, these are issues that are being intentionally smashed together to muddy up what is a simple, straightforward process.
• The payroll tax expires! Uh oh. Good. It should expire. It was always dangerous territory. If they want to extend it, they can extend it in the form of a refundable tax credit for 2013, which doesn't cause money from the General Fund to be transferred to the Social Security trust fund. Withholding can be adjusted to account for the credit, and the economy will be saved from ruin.

The only time Republicans care about the deficit is when they are not in the White House. This is a game, an act, an obscene dance of political gamesmanship, but it is NOT a negotiation.

What we should be doing:

• Ignore the Villagers' hand-wringing
• Stop accepting what they say as truth.
• Stop reacting to everything.
• Start saying out loud that the only thing that should happen before January 1st is an up or down vote in the House on the Senate extension of middle class tax cuts.
• Stomp your feet, call your Congressman, shout it out: ONLY an up or down vote on the middle class tax cuts is warranted, and that means one vote on the Senate bill, not some stupidly crafted package of nonsensical, arcane, ridiculously meaningless "cuts".

Ten days ago we were winning this by not budging at all. Yes, President Obama, that means YOU too. Now suddenly we're engaging in the farce Republicans call "negotiations?" Give me a break. This has been an exercise in how to turn media narratives around for the Republicans' benefit, but it is nothing like a negotiation.

If we really want to win, we simply stop acknowledging all of the stupid GOP party trial balloons floating around us and start pushing for one vote. One vote before December 31st. Just one. No amendments, no extras. One vote on the Senate bill to extend the middle class tax cuts.

Then make them sit at OUR table next year, when the upper rates are set and not going back down. That's how it's done. Our way, not theirs

I would go even further. Tax hikes on all income over $250,000, but NO spending cuts on domestic programs.  We don't need to pay for tax hikes - they will make a huge dent in the deficit all by themselves.  Not that we need to reduce the deficit at all.  And even if we did need spending cuts, take them out of the obscenely bloated military budget, starting with the boondoggle to end (not that it will) all boondoggles: the F-35 StupidPlane, continuing on through contracts with Halliburton, KBR and Blackwater, which has probably changed its name again already, right up through cancelling every fucking dime going to Israel until they tear down every West Bank settlement.

David Dayen at Firedoglake has more on the consequences of stepping over the fiscal molehill, and David Atkins explains how the repugs just proved you can't negotiate with nihilists.

Protest. Protest Them All.

No, of course Mitch McConnell is not going to vote to tax the rich or preserve benefits for the poor, disabled and elderly. But that doesn't mean demonstrations don't matter. McConnell can't say his constituents don't care, and Louisville commuters can't say they don't know what's at stake.

Chris Kenning at the Courier:

More than two dozen demonstrators from Occupy Louisville and other groups held signs and chanted outside the Louisville office of Senate Minority Leader Mitch McConnell on Wednesday, urging him to spare Medicare, Social Security and social programs as part of federal budget negotiations.

SNIP

Others from groups including Jobs with Justice and the Kentucky Alliance against Racist and Political Repression held signs reading “No cuts to medicare and social security” and shouted chants favoring higher taxes on the rich as passing cars honked their horns.


“We will not allow the debt to be used as a smokescreen” to further the interests of the wealthy over the poor and middle class, said K.A. Owens, co-chair of the Kentucky Alliance. “We’re not interested in a grand bargain that cuts into social programs.”

Click here for video.

From the Strongest Possible Position, Obama Gets the Worst Possible Deal.

While we were fixated on preventing them from raising the Medicare age, they snuck a Social Security benefit cut on us.

 

Call your Congress critters and the White House right now.

 

Susie Madrak has a script:

As Atrios says, we're kicking it old school. Get your dialing fingers ready and tell your senators and congress critters: No Social Security cuts! The White House switchboard is 202-456-1414. (Leave their responses in the comments.)

Hi, my name is [NAME] and I'm a constituent living in [CITY].
I would like the senator to commit to opposing any cuts to Social Security, Medicare or Medicaid benefits.
This includes committing to oppose any plan which raises the retirement age or Medicare eligibility age, or changes the cost-of-living adjustment to reduce benefits over time -- all of which are benefit cuts.
Can I count on the senator to vote against any bill that includes any cuts to Medicare, Medicaid or Social Security benefits?

Digby:

This is the deal I most worried about: chump change from millionaires in exchange for painful cuts to vital government programs that help average people. They'll call it a tweak, a little accounting change. And no doubt the Democrats will tout the tax hikes as the holy grail that shows the kind of tough, deficit cutting. But the only people who will really sacrifice and sufferare the people at the lower end of the income scale. The top 1% will be "paying a little bit more" which they will not even notice. That's wrong.

and

... you can still call your congressional Rep and Senator of either party and tell them that you do not want cuts to Social Security. There may be enough fear of the rickety third rail left out there to stop this.

Call your Congress critters and the White House right now. 

Even Kevin Drum, who's been pushing for a combination of tax hike and benefits cuts within the Social Security system, says this deal is stupid:

In addition to the fact that the Social Security cuts would hurt retirees, I continue to think it sets a bad precedent to link Social Security to a broad deficit deal that's otherwise focused on general fund spending and revenue. Social Security is a separate program, and if a deal is going to be made, compromises should be made within the program. It's one thing to hammer out an agreement to raise revenues and cut benefits that affect only Social Security, but it's quite another to cut Social Security benefits in return for general fund tax increases. I don't like that, and I don't like the idea that Obama is setting a precedent to do that kind of thing again in the future.

Yep, the Grand Bargain Obama would sell his mother for is even worse than we thought, 'cause there is no fucking way the Medicare retirement age is surving a half trillion dollars in unspecified cuts.

 

Kathleen Geier at Political Animal:

This morning brings news of a possible deal on the horizon, concerning the “fiscal cliff.” Obama would get the an extension of the Bush tax cuts for households with incomes under $400,000 (not $250,000, which was his goal), a two-year debt limit reprieve, the elimination of the sequester, and additional revenue and the extension of emergency unemployment benefits.

What he is willing to give up for this? Quite a lot, actually. It amounts to about half a trillion dollars in future cuts to social programs (the nature of these cuts have yet to be determined), and also significant cuts to Social Security benefits, in the form known as “chained CPI.” “Chained CPI” is an alternative way of calculating the cost of living which will lower benefit amounts.

I realize that compromises are going to be made on this deal which I, along with most Democrats, are not going to like, but I am not a fan of this deal. At all. Where do I begin?

First of all, the idea of all those large unspecified cuts in social programs makes me very uneasy. Secondly, the two-year debt reprieve, while it sounds like a good idea, is actually quite risky for the Democrats, as Brian Beutler explains. And then there are those Social Security cuts.

In last night’s lukewarm blog post about the deal, Paul Krugman pointed out that at least the Social Security cuts “are not nearly as bad as raising the Medicare age.” That is true, but it is also faint praise. Basically, I’m with Delong, who says,“‘Chained-CPI’ is code for ‘let’s really impoverish some women in their 90s!’ It’s a bad policy.”

SNIP
Cutting Social Security benefits should be off the table. As Delong says, “This deal would still be on the table in January. And odds are Obama could get a much better deal than this come January.” I agree. I worry, though, that cutting Social Security may be the kind of “Grand Bargain” Obama has always seemed amenable to. I don’t think it’s too cynical to believe that the White House floated the story that they were considering raising the Medicare age, so that Democrats would find the bitter pill of cutting Social Security more acceptable. Let’s hope progressives put up a real fight on this one and force the White House to hold out for something better.

Keep in mind, too, that this whole negotiating bullshit is completely unnecessary.

 

Jon Walker at Firedoglake:

The recent emergence of Speaker John Boehner’s Plan B perfectly highlights the most important aspect of the current negotiations, mainly the fact that there is no reason President Obama even needs to compromise.

And yet he is. Congress is another story.

Call your Congress critters and the White House right now.

The One-Sided Sacrifice

This week we're going to hit with a shit-ton of lies about the need for working people to sacrifice the last shreds of the middle class in order to reach a completely unnecessary federal budget deal to avoid the imaginary fiscal cliff.

As you listen - and you should listen, because the Grand Bargain is a giant barbed dildo headed right for your ass - keep this is mind from David Atkins at Hullabaloo:

 The crucial context here is income inequality. Corporate profits and income inequality are at record highs while median incomes are abysmally low. Unemployment is still ridiculously high given the glut of cash held in corporate coffers. The minimum wage hasn't been indexed to inflation in years. Median income in the United States is at its lowest point since 1969. The stock market sits above 13,100 as of this writing, a statistic considered good news to those with investments, but outrageous and offensive to working people struggling to get by given the unemployment and underemployment rate.

Any story about who should "sacrifice" given these realities must contain this context, or the journalist tells a gross lie of omission. When the poor and elderly on fixed incomes are asked to give up needed benefits in exchange for pittance tax increases on the wealthy, it's not a fair trade. It's not even close to a fair trade.