EZRA KLEIN: The TRICK Washington Is Using To CUT Social Security and Medicare
Let’s get something straight: “Chained-CPI” cuts Social Security benefits and increases taxes. That’s why it’s part of the negotiations. Full stop. But you often wouldn’t know it. The policy typically gets sold on extremely technocratic grounds. Here, for instance, is the case made by Erskine Bowles and Alan Simpson’s Moment of Truth Project:
http://www.momentoftruthproject.org/publications/measuring-case-chained-cpi
Chained-CPI, in this telling, is simply an effort to correct a measurement error in the way we calculate inflation. It’s a tweak, a fix, a policy designed to achieve a higher level of technical precision. And who could be against that? There’s something to this line of argument. The way we measure inflation right now really does mismeasure inflation. Chained-CPI really is a bit more accurate. But that’s not why we’re considering moving to chained-CPI. If all we wanted to do was correct the technical problem, we could make the correction and then compensate the losers. But no one ever considers that. The only reason we’re considering moving to chained-CPI because it saves money, and it saves money by cutting Social Security benefits and raising taxes, and it’s a much more regressive approach to cutting Social Security benefits and raising taxes than some of the other options on the table.
The question worth asking, then, is if we want to cut Social Security benefits, why are we talking about chained-CPI, rather than some other approach to cutting benefits that’s perhaps more equitable? The answer is that chained-CPI’s role in correcting inflation measurement error is helpful in distracting people from its role in cutting Social Security benefits. Politicians who are unwilling or unable to offer a persuasive political or policy rationale for cutting Social Security benefits are instead hiding behind a technocratic rationale. We’re not “cutting benefits,” we’re “correcting our inflation measure.” A similar dynamic is behind the popularity of raising the retirement age, or the Medicare eligibility age: Its advocates can pretend that it’s not a cut, but a technical adjustment made to account for the fact that Americans are living longer. Compared to other approaches to cutting benefits, raising the retirement age is, again, a substantively unwise, regressive approach. But it can be justified as a mere technocratic tweak.
This is bad policymaking. If we want to cut Social Security and/or Medicare, we should have a conversation about how to cut Social Security and/or Medicare, decide what our priorities are — Progressivity? Making the health-care system more efficient? Total deficit-reduction? — and find the policy that does the best job achieving those goals. The effort to mask cuts in technical adjustments just leads to worse cuts, as the top priority isn’t protecting the poorest or improving the program, but finding a policy sufficiently confusing that you can pass it before most people realize what it is.
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/18/the-trick-washington-is-using-to-cut-social-security-and-medicare/
= new reply since forum marked as read
When the GOP calls for "Entitlement cuts", no one hears, Social Security, Supplemental Security Income (SSI), Veteran's Benefits, Medicare, Medicaid, Student loans, Food Stamps or even welfare for children, they hear "Welfare" and they are willing to cut "Welfare" for adults.
The problem is the federal government (except for Food Stamps) has NEVER paid for welfare for adults (The closest the Federal have come to in SSI, and then only for people that can show that due to medical reasons they can NOT work). Thus when the GOP say they want to cut "Entitlements" they also do NOT want to cut Social Security, Veteran's Benefits, SSI, Medicare, Medicaid, Student loans, Food Stamps or even welfare for children. Thus there is NOTHING to cut AND not come out as a someone taking money from people who need it.
Boehner and the rest of the GOP leadership is hoping Obama offers something they can blame any popular entitlement cut on Obama, but Obama is taking the advice of Pelosi, and saying to the GOP, "You won the house, you want to cut Entitlements, so cut them". The GOP is refusing to bite, for it is a poison apple of cutting entitlements.
Pelosi seems to have convinced Obama that the best thing to do is nothing, go through the motion of negotiating but keep on asking the GOP for things to cut, and when the GOP does NOT offer anything do the same. The Devil is in the details, it is the GOP controlled house that has to vote to continue (or NOT vote to end) the Social Security Tax reduction and the rest of the tax reduction for the people earning below $250,000. The people want increase taxes on the wealthy, thus to demand tax deductions for the Wealthy AND the people below $250,000 AND a cut to services to the lowest income groups in the US, is NOT popular and unless Obama agrees, all the blame will go on the GOP.
Thus the GOP Leadership will NOT jump in that sinking ship, they see it sinking. They do NOT know what to do and thus I see the Democratic Party dominating the Congress over the next two years, for it is not always to the majority that power flows to, it is often to who KNOWS WHAT TO DO WITH THAT POWER AND WILLING TO USE IT. Right now, I suspect it is Pelosi and the Democratic Party in the Senate, along with Obama. If Obama plans it right, he will get his tax cuts for people below $250,000 and tax increase for those over $250,000.
The only question is how loyal will the various GOP members stay with the GOP leadership. Traditionally the GOP has been more loyal to its leadership then the Democratic Party (Remember, Will Rodgers famous come back when asked if he was a member of an Organized Political Party, he said "No, I'm a Democrat"
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This stronger loyally has its limits, and sure political defeat is such a limit (I keep remembering FDR's veto of the bill to pre-pay the bonus to WWI veterans in 1936, Hoover had veto a similar bill four years before, the GOP members of the House and Senate, seeing political defeat if they did NOT vote with the Democrats to over ride that veto lead them to vote to over ride what had been an important part of their political movement of the early 1930s). Facing Political defeat in the face is NOT a good thing, even GOP politicians will revolt under such circumstances and that is what they are facing in this fight. No matter what they do, they lose. Thus the best thing to do is agree to what Obama wants and then blame him for anything that goes wrong, even if it was due to things the GOP voted for.
More on the Bonus Army:
http://en.wikipedia.org/wiki/Bonus_Army
After all is said and done,.....the devil will be in the final details of this agreement (if they don't go over the cliff).
The people have spoken on election day and expect their president to heed the wishes of the waking majority, that includes, Democrats, Republicans and Independents. I would hate to see Michigan governance in the making.
Waiting,.....
Kabuki theater. Shell game. Can't wait until New Year's Day. Wishing my life away.....
