Month: December 2012

Waiting on Boehner

by David Atkins

With a small-bore deal from the Senate on the table, all eyes are on John Boehner as to whether he will bring it to the floor. Whether or not it’s actually a good deal for Republicans, it’s almost certain that the same House Republicans who rejected Boehner’s extremist Plan B as somehow too liberal won’t see a deal that extends unemployment benefits while raising taxes over $450,000 as anything more than Communism.

One of two things happens now: either Boehner refuses to bring the Senate deal to a vote in the House, thereby potentially maintaining his Speakership, or he brings it to a vote and hopes that enough Republicans join Democrats to pass it. It’s possible that Republicans will be OK with voting on this deal tomorrow after we go over the cliff so that they can call their vote a tax cut rather than a tax increase. Either way, though, it’s not likely to pass with a majority of Republican votes.

In the meantime, all the ballyhooed talk of the markets tanking if no deal is reached on the cliff seems to be overwrought: the Dow finished up 166 points today.

I’m still of the opinion that going over the cliff is better than the Senate’s deal. When taxes go up on all Americans, it’s important that the President and every Democratic politician make it clear that Republicans are to blame for it for insisting on keeping tax breaks on every dollar above $250,000. Let the newspapers write about it every single day until November 2014 if necessary. As much as it’s important that tax rates not go up on the middle class, it’s also probably not the end of the world for that to happen (it would reduce the deficit, after all, like conservatives supposedly want.)

If this deal does go through, it’s probably something that progressives can live with, but everything will depend on what happens when Republicans inevitably take the debt ceiling hostage. The President has declared that he won’t allow the debt ceiling to be taken hostage, but there already appears to be some retreat from that position, while the only ways to avoid that scenario would be to mint a trillion-dollar coin or invoke the 14th Amendment. While I would personally like to see the 14th Amendment used I don’t expect the President to do either one, which makes his pronouncements about not negotiating over the cliff pointless. He’ll be forced to.

In the end, what happened is that Republicans took last year’s debt ceiling hostage, forcing a pointless game of brinksmanship now in which they have taken stupid spending cuts and middle-class tax cuts hostage. Even though Democrats hold the stronger negotiating position, it seems Republicans are going to force Democrats to a draw at best now, in the hopes of taking the same debt ceiling hostage again this year in order to get what they really want.

This is never going to stop because there is no downside for Republican hostage taking. The only way it will ever stop is when Democrats finally just shoot the hostage and destroy the Republicans over the outcome.

In the meantime pseudo-centrists like Starbucks CEO Howard Schultz will continue to blame both sides. But it’s best to mock them and mobilize against them to show where the people really stand.

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Rich dead people need “relief” more than seniors

by digby

This is yet another edition of “they don’t really care about the deficit”:

It’s been a rather bizarre decade for what Republicans call the “death tax,” but what should more properly be called the inheritance tax. Back when George W. Bush came into office, he slashed the estate tax, and gradually phased it out until 2010, when there was no estate tax. Since then, Congress has set it at a 35 percent rate, with a $5 million exemption, indexed to inflation — but that’s set to expire, along with everything else, in the new year, and revert back to its Clinton-era levels.

Those Clinton-era levels of a 55 percent rate and a $1 million exemption are much, much higher than what’s being talked about as part of a fiscal cliff deal. According to Sam Stein and Ryan Grim of the Huffington Post, the latest proposal that really, really might turn into an actual deal would set the estate tax at a 40 percent rate, with a $5 million exemption, indexed to inflation. In other words, the first $5 million of any estate would not be taxed, but the rest would be at a 40 percent rate, with that $5 million exemption growing each year with inflation. And remember, these are exemption levels for singles; the exemption level for surviving spouses is double this.

It’s a tax change that doesn’t affect many households, but it does affect the budget in a big way…

Remember, the CBO figures switching to chained CPI would reduce deficits by about $200 billion over a decade, with a little less than half coming from tax increases and the rest from Social Security and other benefit cuts. In other words, a lower estate tax costs us almost twice as much as chained CPI would save.

The good news is that the Chained-CPI didn’t happen (in this round.) The bad news is that it’s also possible the estate tax will not go up either, which is just criminal. But the idea that they even floated this social security cut while negotiating away this estate tax is just unbelievable.

Meanwhile, Politico is selling this proposed deal as a big defeat for the Republicans. Seriously.

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What about the payroll tax?

by digby

Since most Americans (including the media) don’t have the vaguest clue about what’s really going on with the fiscal cliff nonsense, I have to think this is likely to be problematic:

Americans are all but certain to face a broad hike in taxes on Tuesday for the first time in at least two decades, ending a prolonged period of declining taxation that has become a defining characteristic of the American economy.

Regardless of whether President Obama and Congress reach an agreement to avoid the “fiscal cliff,” many Americans will see a higher tax bill because of the expiration of the payroll tax cut, which was enacted in 2011 as a temporary measure to boost economic growth. The tax holiday was preceded by a similar temporary cut in 2009 and 2010.

Lawmakers on Monday morning were locked in negotiations trying to close a deal that would, in part, prevent a separate tax — the income tax — from rising for all but the wealthiest taxpayers.

Unlike income taxes, which rise along with a worker’s income, the payroll tax is a fixed percentage of an employee’s salary. Allowing the tax cut to expire will increase taxes on salaries by 2 percent for every American worker. Up to $110,100 a year in salary is subject to the tax…

This jump in payroll taxes, combined with other tax increases affecting the very wealthy likely to take effect in the new year, would make for the largest increase in taxes in about half a century.

Virtually everyone also believes that this payroll tax hike is likely to be the biggest drag on the economy in 2013. One reason why I think going over the cliff is a better strategy is that they would immediately pass tax cuts for the middle class and it might just be possible to add on an equivalent amount to the payroll tax cut and make it even steven. This would avoid a tax increase on the middle class entirely while going back to better funding of Social Security. I haven’t heard anyone talking about it, but it seems to me that someone should be thinking about the effect of this payroll tax hike, both politically and economically. Austerity is austerity. And workers are going to notice it and they are going to complain.

I don’t know who they’ll blame, but I would think it’s probably going to be the Party that’s made a fetish out of raising taxes over the last year. (I wouldn’t count on them understanding that the taxes the Democrats have been demanding be raised were different taxes than these.) In any case, I’m one hundred percent sure the Republicans will run on the fact that the Democratic president passed the biggest tax increase in half a century and that every worker got hit by it. And it will be true.

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Fiscal cliff notes 12/31: hovering on the edge of a mini-deal

by digby

The latest trial balloon looks like this:

An emerging tentative agreement would extend current tax rates for households making $450,000 or less; extend the estate tax at its current level of 35 percent for estates larger than $5 million; and prevent the Alternative Minimum Tax from hammering millions of middle-class workers, sources said.

The deal would also extend unemployment benefits set to expire Tuesday and avert a steep cut to Medicare payments for doctors.

If this is true, all I can say is that it could be a worse. As one who doesn’t think the deficit is something we should care too much about at the moment, I can’t say that I’m sorry to see such a “small” deal. On the other hand, as one who cares a great deal about income inequality, I’m very sorry to see the Democrats give up their best chance to raise taxes on the affluent. It was never worth it to exchange those (inevitably temporary) tax increases for cuts to vital programs for average people — kind of defeats the purpose — but going over the cliff would have solved that problem.

I would be baffled by the calculation that leads the Democrats to walk away with so little except for this, as Jamelle Bouie succinctly outlines:

Not only did President Obama win reelection on a message of higher taxes for the wealthiest Americans, but the actual mechanism of the fiscal cliff— automatic tax increases on all Americans, beginning Jan. 1 — gave Obama space to drive a hard bargain. And indeed, his initial offer on the fiscal cliff was promising: $1.6 trillion in new revenue, unemployment insurance, billions in new stimulus, a permanent fix for the debt ceiling, and several hundred billion in undefined spending cuts.

Of course, Republicans rejected this offer. And given their power in the House of Representatives, Obama had no choice but to make some concessions. But in his apparent zeal for a “grand bargain,” he went further, lowering his ask for revenue and floating cuts to Social Security in the form of “chained consumer price index,” a different way to measure inflation and calculate benefits. Republicans rejected this as well, and talks between Obama and Boehner fell apart.

The current Democratic offer is even further from ideal than the one presented by President Obama, and it represents a huge erosion of leverage. Republicans are now the ones in control, and as Jonathan Chait notes, it has everything to do with the president’s willingness to cave on taxes and his genuine desire to avoid the fiscal cliff.

I believe they are afraid of the cliff, for reasons that are obscure. Perhaps they should stop watching cable news for a while. But at bottom I think it’s the Grand Bargain that drives them, otherwise they wouldn’t have floated the Medicare eligibility age and the Chained-CPI. Unfortunately, I’m guessing that the combination of lower deficit reduction from the tax hikes and the looming debt ceiling fight will give them another bite at that apple. The Grand Bargain lives.

But it also gives progressives some time to organize against the next call for “shared sacrifice.” Every day that we avoid austerity is a day that the economy may improve and the long term deficit assumptions will change for the better. Fight one battle at a time.

This one seems to have come to a draw, in my view, when it could have been a win. But according to Ezra Klein, the GOP sees it as a huge win for them, and you can see why:

Obama is already negotiating over the debt ceiling, [the Republicans] point out. He began the fiscal cliff negotiations by saying he wanted a permanent solution to the debt ceiling. Then it was a two-year increase in the debt limit. Now he’s going to sign off on a mini-deal that doesn’t increase the debt ceiling at all. Does that really sound like someone who’s going to hold firm when faced with global economic chaos? The White House always talks tough at the beginning of negotiations and then always folds at the end. Republicans are confident that the debt ceiling will be no different.

All this raises the tantalizing prospect for Republicans that they could end these negotiations having given up less tax revenue than they ever thought possible — less tax revenue than Boehner offered Obama, even — but still getting their entitlement cuts. Oh, and because there was never a big deal, they won’t have to agree to much stimulus, either. All in all, a pretty big win, and it wouldn’t have been possible without the White House’s baffling inability to stick to a negotiating position.

Apparently the White House is telling Klein that they fully intend to hang tough on the debt ceiling, you betcha. No way, no how are they going to negotiate. I might find that believable if the President wasn’t obviously still chasing his white whale of a Grand Bargain (which he reiterated just yesterday on Meet the Press with his statement that cuts to programs that are “really important to seniors, student and so forth have to be part of the mix.”) It has been obvious that the president seeks to cut the so-called entitlements since he first talked about it in 2009, saying that “everyone’s got to have skin in the game.” That’s the danger we’ve faced from the beginning. And it’s only because the Republicans don’t want their fingerprints on it and the Democrats risk being mau-maued out of office by those same hypocritical Republicans that it’s so difficult for him to get it done.

If this deal happens (no guarantee) then there will at least be some time to organize once more against these unnecessary spending cuts to vital programs. That’s about the best I can say for it.

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No downside for Republican hostage taking

by David Atkins

Perhaps the most frustrating aspect of the fiscal cliff “negotiations” is that there is essentially no downside for Congressional Republicans in holding the country and its economy hostage. Democrats are less than two months removed from having resoundingly won the Presidency, gained seats in the Senate, and earned over a million more votes for House candidates than did Republicans. Due to gerrymandering, however, the Republicans still have a narrow majority in the House. Due to the Senate’s ungovernable filibuster rules, Republicans can also control the balance of legislation in the Upper Chamber as well.

It’s true that Republicans have been taking a beating in the polling on the fiscal cliff negotiations. That’s not surprising, since Republicans want very unpopular things. Further cuts to earned benefit programs and lower taxes on the rich were resoundingly rejected by voters in November, and they continue to poll poorly. In theory, fear of voter backlash should cause Republicans to think twice about holding the line on these policies. But voters already rejected Republicans by wide margins this year and it did little to weaken their negotiating position.

There is little problem for Republicans, then, in attempting to get their way through holding the economy hostage despite the clear will of the American people. The biggest danger to most individual Republicans remains a primary challenge from someone even farther to the right. The vast majority of them are so protected by gerrymandering as to face little to no danger from a Democratic challenger in the near future.

Also, since the conservative agenda depends on the notion that government itself is a failure and doesn’t work, there’s no issue for them in making that supposed incompetence a reality. Since the President and his party end up being blamed by voters when economic conditions are poor, scuttling the economy in the wake the President’s re-election is actually a smart political move for them.

It’s up to Democrats to show that government can be a force for good and to protect the economy, which means that only Democrats have the incentive to reach a deal to avert crises like the “fiscal cliff” or the debt ceiling. Republicans have no such incentive.

But there is yet another twisted irony here. Since conservatives both lack incentive to make a deal work and want deeply unpopular policies, it makes perfect sense for them to withhold any cooperation on a deal that makes sense and the American people actually want, opting instead to force most Democrats to vote for an amalgam of terrible policies while they themselves remain mostly intransigent. And why not? Since seniors tend to like their earned benefits but support Republicans because of fear that tax revenues are being spent on the “wrong” people, why not force Democrats to cut those benefits while raising taxes to avert a fiscal crisis? There’s no significant backlash Republicans can expect from voting no.

From the conservative calculus, there’s no reason to stop the taking of economic hostages and no reason not to push the damage of horrible votes to avert crises back onto Democrats.

So what should Democrats do? The same thing governments do when confronted by more pedestrian hostage takers: refuse to negotiate. Insist on the correct and popular policies, and if Republicans refuse to abide by them, then allow the chips to fall where they will on various fiscal crises.

There should be, then, no deal on the fiscal cliff today. Democrats should make it clear who was responsible for the failure to come to a deal and why, allow the tax increases and cuts to take place, and then do little over the next two years but force Republicans to vote against simple and popular policies like middle-class tax cuts, repeal of the most onerous sequestration cuts, immigration reform and the entire rest of the broadly popular Democratic agenda all the way until November 2014.

It may or may not be that voters will punish Republicans appropriately at that time. But at the very least Democrats will avoid the indignity of being manipulated by hostage takers into voting against the American people just to reach a terrible deal.

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The biggest assholes in the world

by digby

You’ve undoubtedly heard that Hillary Clinton has been hospitalized due to complications from her concussion.

Haven’t heard anything from these shameless jerks though:

Fox’s Evening Shows Mock Hillary Clinton’s Concussion

December 20, 2012 12:26 AM EST

Nearly all of Fox News’ evening news shows ridiculed Secretary of State Hillary Clinton for having to postpone her testimony on the Benghazi attack because of a concussion she suffered after fainting due to dehydration. Their mockery was an attempt to downplay the concussion and suggest Clinton was faking injury to avoid giving testimony, a notion the State Department has called “wild speculation based on no information.”

The Washington Post reported on December 15 that Clinton sustained a concussion after she fainted due to dehydration while at home a week prior. After the incident, the State Department explained that Clinton would have to postpone her testimony about the attack on Benghazi due to the concussion.

Following the State Department’s announcement, Fox News contributor John Bolton, appearing on On The Record, suggested Clinton was faking “diplomatic illness” to avoid testifying about Benghazi. The State Department’s Victoria Nuland lashed out at Bolton for his remarks, labeling them “wild speculation based on no information.”

Now Fox News’ evening shows have decided to join Bolton in accusing Clinton of faking her condition and make it seem she is trying to avoid giving her testimony. Co-host of Fox News’ The Five, Kimberly Guilfoyle, accused Clinton of running “a duck and cover” after suffering the concussion. Co-host Greg Gutfeld went on to ask, “How can she get a concussion when she has been ducking everything [related to Benghazi]?”

The lowest of the low. And their many minions are still saying she’s faking it. If she were to die(God forbid) I have no doubt they’d say she did it to avoid testifying about their absurd Benghazi pseudo-scandal.

Horrible, horrible people.

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QOTD: President Obama

by digby

On MTP:

One of the fallacies I think that has been promoted is this notion that deficit reduction is only a matter of cutting programs that are really important to seniors, students and so forth.

That has to be part of the mix, but what I ran on and what the American people elected me to do was to put forward a balanced approach.

I don’t recall him saying explicitly that we need to cut programs that are “really important to seniors and students and so forth,” but it certainly was implied, so that’s more or less true. And yes, it’s also true that Mitt Romney was promising even worse. But let’s be clear about what he’s really saying and has been saying all along:

We need to cut programs that are “really important to seniors, student and so forth,” but we also need to get some chump change from millionaires who won’t even miss the money.

That’s what “balanced” really means. But you knew that.

*Keeping in mind that the upper income rates are scheduled to return to the onerous levels of … 2001. The sacrifice is truly noble.

Update: Ezra Klein says:

Today’s Republican Party thinks the key problem America faces is out-of-control entitlement spending. But cutting entitlement spending is unpopular and the GOP’s coalition relies heavily on seniors. And so they don’t want to propose entitlement cuts. If possible, they’d even like to attack President Obama for proposing entitlement cuts. But they also want to see entitlements cut and will refuse to solve the fiscal cliff or raise the debt ceiling unless there are entitlement cuts.

You can see why these negotiations aren’t going well.

I have a sneaking suspicion that they’d be quite happy to see the Democrats make these cuts for them. That’s the very definition of win/win — and a very good reason for the Democrats to just say no, regardless of what the president calls “balanced.” He doesn’t have to run again.

h/t to JS

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First, do no harm

by digby

Now this is funny. Brian Beutler reports:

In a tremendous irony, Republican requests for lower tax rates, a high estate tax threshold, and a permanent AMT fix — combined with Democratic requests to delay the sequester, include a “doc fix” for Medicare physicians, and extend emergency unemployment benefits — have left the parties negotiating toward a plan that would result in no net deficit reduction over 10 years, according to Senate Majority Whip Dick Durbin.

But by retracting the Social Security ask, Republicans bought themselves a few more hours to cut a deal.

“I was really gratified to hear the Republicans have taken their demand for Social Security benefit cuts off the table,” Reid said. “The truth is they should never have been on the table to begin with.”

Well, he’s right about that but the president didn’t exactly reject the concept in his interview on Meet The Press this morning. But considering the fact that it has nothing whatsoever to do with the deficit they are all so worked up about it’s awfully nice to see it moved off the agenda (for now.)

Whatever. The deficit is the least of our problems. I’m sure the Dems would like to avoid another debt ceiling debacle and maybe the Republicans are losing their taste for battle and won’t do it. But at this point, I’m applying the Hippocratic oath to these hypocrites: first, do no harm. The deal described above fits that bill about as close as one can in this environment. Let’s get ‘er done.

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Fiscal cliff notes: The Villagers are stimulated by the prospect of human sacrifice

by digby

The [current CPI] fails to account for what economists call upper-level substitution bias, and what my mother would call plain common sense: If the price rises for a certain commodity in the basket of goods used to measure inflation, consumers will choose a cheaper alternative. In my house, when the price of beef soars, we substitute chicken —– Washington Post columnist Ruth Marcus

Yes, I’m quite sure the price of beef is always a huge concern for an elite columnist at one of the world’s most influential newspapers. In that column, the allegedly liberal Ruth Marcus went on to heartily endorse the change, saying that the White House had assured her that the most elderly poor will be taken care of so it’s all good. And then I’m sure she rushed into the kitchen to figure out how to stretch her meager weekly ground beef allotment for another few days. Oatmeal added to the meatloaf can be quite nourishing, don’t you know?

As I write this we’re hearing a bunch of heated chatter that Mitch McConnell is “insisting” on the Chained-CPI and he refuses to give up the debt ceiling fight. And there’s just as much pushback coming from Republicans like McCain, Graham and Rubio saying that the Chained-CPI is off the table. So what gives?

If I had to guess, and it’s purely a guess, I’d say that the Democrats were trying to position themselves as being “forced” to cut Social Security by the Republicans in order to get the debt ceiling off the table. (How long it stays off the table is probably the greatest bone of contention — Boehner offered a year already, so it will probably have to be at least that.) The Republicans don’t seem to want to take responsibility for cutting of SS for their only growing demographic, which is good news for all of us who will be dependent on Social Security in our old age. Every day they don’t agree to a cut is a good day for us. Unfortunately, the president and the congressional leadership already showed their hand on this so it’s not going away.

If they do come to an agreement that includes the Chained-CPI  it will not only be a terrible, terrible thing to do on the merits, as I wrote earlier it is going to be laid at the feet of a Democratic president (which will undoubtedly be known among the apologists and the establishment as his “Nixon goes to China” triumph) and his party will pay the price. Any Democrat who foolishly votes for it will be pounded by both the left and the right in the coming elections and it’s likely to kick a fair number of them out of office in 2014. Why they would fall on their swords and cut Social Security benefits to close a deficit in which Social Security is not a factor is almost beyond belief. So much so, that I’m still hopeful that the talks will fall apart or the Tea Party will save them from themselves — or the congressional Dems just say no and let the chips fall where they may. I don’t think McConnell and Boehner can get a majority to raise any taxes so it might fall apart of its own accord.

Anyway, it’s all still fluid and we don’t know what’s really happening. But if you are still confused as to why the Chained-CPI is a travesty for the elderly, read this piece by Tim Noah — and weep:

“Chaining” the Consumer Price Index (CPI) is a benefit cut disguised as a technical fix. And if budget constraints require cuts in Social Security benefits, those cuts should be targeted at the most affluent recipients—as chaining does not.

Here’s how the CPI is calculated today. Every month the Labor Department’s Bureau of Labor Statistics (BLS) phones all sorts of businesses all over the country to collect prices on roughly 80,000 items divided into about 200 categories. The categories are “weighted” in accordance with nationwide consumer surveys that the BLS conducts every two years; the weighting yields a “market basket,” i.e., a set of goods that’s reasonably representative of American consumption patterns. The BLS massages its monthly information into (among other measurements) the Consumer Price Index For Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W covers 32 percent of all Americans, and it’s used to calculate Social Security benefit increases. There are other CPIs too, but henceforth when I refer to the “CPI” I’ll mean the CPI-W.

One longstanding criticism of the CPI is that it doesn’t take into account, on a month-to-month basis, consumer substitutions made in response to price increases. Maybe cheddar cheese is getting so pricey that I’ll switch to American cheese. Or maybe beef is getting so pricey that I’ll switch to chicken. If such substitutions become permanent, of course, that will show up in the next biennial consumer survey. But until that next survey, the CPI will be artificially inflated because it will assume I’m buying cheddar when I’m really buying American, or it will assume I’m buying beef when I’m really buying chicken. Subsequent inflation adjustments will compound the error and inflate benefits even more.

(An obvious objection to this entire mode of thinking is that it doesn’t consider that substitutions might constitute a serious decline in the standard of living. What if I can no longer afford to feed my children beef and I have to feed them dog food instead? From an economist’s point of view, I have merely altered my consumption habit.)
[…]
Another difficulty with chaining the CPI is that it would have to be accompanied by a benefit increase for the oldest Social Security recipients, because over the long term chaining benefits would dramatically lower benefits relative to what very old beneficiaries receive today, and at a stage of life when one is likeliest to be poor and unable to contemplate working. That might prove a hard sell to the GOP rank and file as well.

But let’s say we manage to chain both Social Security benefits and tax brackets. And let’s assume the necessary bump for the oldest Social Security beneficiaries is agreed to. Would chaining really bring Social Security benefit increases in line with spending patterns? Actually, no. Not for senior citizens, anyway.

For the elderly, spending patterns are unique in one very significant respect: Old people spend a lot more on health care. Yes, they have Medicare. But they also have a lot more trips to the doctor. As a result, the older-65 set spend a much larger portion of their incomes on health-related expenses than the rest of the population. And health inflation, you may have heard, is increasing quite a bit faster than inflation for other goods.

The BLS is aware of that, and has crafted a special CPI just for old people. And guess what? The so-called CPI-E is not only rising faster than the chained CPI; it’s also rising faster than the CPI-W that’s used to calculate benefit increases today. So if a “technical” correction were all that was called for in calculating Social Security, that correction would have to increase benefits, not reduce them. The CPI-E is, at this stage, a bit rough (the “E” stands for “experimental,” not “elderly”). But as Jared Bernstein of the Center on Budget and Policy Priorities (who differs with Greenstein on this issue) points out, “the BLS could whip it into shape if Congress would provide the resources.” But why would Congress want to? It wants to cut Social Security spending, not increase it.

Regardless of whether or not we go over the cliff or they make a deal, I’m sickened by what I’m hearing on television today. Like this:

GREGORY: If this fight comes back– and I want to ask you specifically about entitlements: Medicare and Social Security.

PRESIDENT OBAMA: Right.

GREGORY: Are you prepared in the first year of your second term to significantly reform those two programs? To go beyond the cuts you’ve suggested to benefits in Medicare, which your own debt commission suggested you’d have to do if you were really going to shore up Medicare at least. Are you prepared to do that in your first year of the second term?

PRESIDENT OBAMA: What I’ve said is I am prepared to do everything I can to make sure that Medicare and Social Security are there, not just for this generation but for future generations.

GREGORY: You’ve got to talk tough to seniors don’t you about this? And say, something’s got to give?

PRESIDENT OBAMA: …but I already have, David, as you know, one of the proposals we made was something called Chain CPI, which sounds real technical but basically makes an adjustment in terms of how inflation is calculated on Social Security. Highly unpopular among Democrats. Not something supported by AARP. But in pursuit of strengthening Social Security for the long-term I’m willing to make those decisions. What I’m not willing to do is to have the entire burden of deficit reduction rest on the shoulders of seniors, making students pay higher student loan rates, ruining our capacity to invest in things like basic research that help our economy grow. Those are the things that I’m not willing to do. And so…

I think the president is forgetting that it’s not “unpopular” and it isn’t him who’s making the sacrifice or being “brave” by forcing these hideous cuts for no good reason. It’s millions of old people who will be forced into greater poverty and insecurity because of what he’s doing in service of a trumped up crisis of his own making who are being asked to make the sacrifice for no good reason. I’m sure ex-President and Mrs Obama will not be the ones substituting cat food for tuna.

The Villagers are even worse. They are nearly drooling at the possibility that the elderly could be forced to “sacrifice” for the greater good.  If it happens, they will all sigh deeply and declare that it “hurts” Real Americans like themselves to make these sacrifices but they’re willing to do it for the greater good.  Then they’ll all get in their network supplied town cars and go to their expensive dinners and raise a glass of expensive champagne to celebrate the fact that our government is working exactly as it should.

Also too, this, from Josh Barro:

Adopting it is just another way to cut Social Security benefits. So it’s only a good idea if cutting Social Security benefits is a good idea.

Now, you could argue that Social Security benefits have been too generous all along, which is why growing them more slowly is a good idea. Or you could argue that the long-term fiscal gap requires cuts in many worthwhile programs, and Social Security is one of the best options.

As it happens, I don’t think either of those claims is true. I think Social Security is one of the best values among federal programs and that the U.S. faces a retirement-savings crisis that will be exacerbated if we cut old-age benefits. I think we should cut elsewhere.

You might disagree. But that’s the debate we need to have. The claim that adopting chained CPI is a technical improvement that “everyone” should get behind is incorrect.

So why is the president doing this? He’s certainly not a dumb man who can’t understand what he’s doing. The only explanation is that he believes Social Security benefits should be cut, but knows that it’s politically difficult to do so he’s hiding behind this “technical improvement.” Honestly, there aren’t any other believable explanations. Social Security never had to be part of this deficit conversation because it doesn’t contribute to the deficit. It is, however, part of the Grandiose “Bargain” he’s been pushing since before he was inaugurated the first time in which he seeks to be the Democratic president who bridges all the partisan divides and takes all these difficult problems “off the table” for all time so we can finally “do big things.” The Republicans have never signed on to that vision and more and more, I’m wondering if they aren’t saving the Democrats from themselves.

Update II:

Lol:

Senate Republicans realized in a caucus meeting Sunday afternoon that the idea was a loser for now, even if they might return to it in reaching a larger deal later on.

“CPI has to be off the table because it’s not a winning argument to say benefits for seniors versus tax breaks for rich people,” said Sen. John McCain (R-Ariz.). “We need to take CPI off the table — that’s not part of the negotiations — because we can’t win an argument that has Social Security for seniors versus taxes for the rich.”

“There’s a realization that in spite of the president’s apparent endorsement of a chained CPI that that proposal deserves more study,” said Sen. Susan Collins (R-Maine). “My guess, based on what Democrats are saying is that that reform would not happen during this stage of the negotiations.”

A Democratic aide, informed of the reversal from a proposal that Senate Minority Leader Mitch McConnell (R-Ky.) had offered late Saturday — which included the Social Security cut — took it as a hopeful sign.

I don’t know what happened there and I don’t care as long as it’s out of the deal. For now. You know it’s going tor ear it’s ugly head again. Lindsay graham was out there talking about how we need to raise the Medicare age and cut Social security and otherwise “reform entitlements.” As part of the debt ceiling.

Soooo. If this is off the table for now, I hope the President can call their bluff on the debt ceiling and wrap this baby up. Even if he doesn’t we live to fight another day.

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“There will be resistance”

by digby

Now that it’s been revealed that the FBI was spying on Occupy Wall Street all over the country, worried about it’s “revolutionary” agenda, one can only wonder if they will be looking into this:

Not that I think Drudge or anyone else should be looked into by federal authorities on the basis of such  vague language either, mind you. But it’s curious that they see a bunch of drum circling peaceniks as a major threat to democracy but by people who go to political gatherings packing heat or carrying signs that say “we came unarmed … this time” are good old fashioned Americans exercising their right to free speech.