Archive for grand bargain

Must-Read: Personal debt that enriches Wall St. -- NOT national debt -- is greatest threat to retirees

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Your Daily Dose of BuzzFlash at Truthout, via my pal Mark Karlin:

Whenever the elected political tools of the oligarchs trash Social Security, they tout 401(k)-type accounts and voluntary retirement savings programs. [...]

...WP article is entitled, "Most Americans accumulating debt faster than they’re saving for retirement":

A majority of Americans with 401(k)-type savings accounts are accumulating debt faster than they are setting aside money for retirement, further undermining the nation’s troubled system for old-age saving, a new report has found....

[...]

So the problem facing even non-Social Security dependent retirees (who have earned their checks by paying into the fund) is due to personal debt not national debt. What people owe money on are non-government expenses such as college, housing, cars, credit cards, etc.  This is private indebtedness that is contributing to a looming personal retirement shortfall of funds.

Ironically, Social Security is one of the few programs that is keeping most seniors from economic impoverishment, as meager as the average monthly check is.  [...]

Since the Reagan era, wages have been relatively stagnant in the United States as debt has risen.  It is indeed this growing personal (again not national) debt that has been a primary source of profit for the banks too big to fail.  Persons who owe large amounts of money are paying off interest at often exorbitant sums (think credit cards) while in many cases barely scratching away at principal.  This is all easy money for banks that are paying out literally .01 % on savings accounts. [...]

So, let this WP article be a mini-lesson on what the oligarchy and their minions on the Hill, such as Paul Ryan, have been up to. Since the Reagan era, they have been promoting policies that increase personal debt while stagnating wages (except for themselves, of course).  In turn, a likely majority of the 99% has to go into debt and borrow money at high interest rates, while those who save receive virtually no interest on their savings.  This, in turn (except for Social Security) limits what they can save for retirement.

Then the financial titans sponsor think tanks and give campaign contributions to blame "entitlements" for all the personal indebtedness which has fueled their profitsSo, if a "grand bargain" of Social Security and Medicare cuts are enacted, the elderly become indebted and poorer, while the Wall Street barons make even a greater profit from increased borrowing as the national debt is lowered in the name of "austerity" (without revenue increases in the form of higher progressive taxes on the rich).

Please read the entire post here.

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"If Obama wants to help Social Security, he should start by lifting the cap on taxable earnings."

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Today's L.A. Times letters to the editor, because our voices matter:

Re "Obama's entitlement gambit," Opinion, April 10

The current calculation used to determine adjustments to Social Security benefits is based on the cost of living for an urban worker, not a senior. Therefore, it doesn't account for the greater percentage of income the average senior spends on healthcare. Because the cost of healthcare rises faster than other necessities, even the current formula does not adequately protect seniors from inflation.

Switching to the "chained CPI" to determine payouts, as President Obama proposed to do in his 2014 budget, would only make a bad situation worse.

Steve Mehlman

Beaumont

***

This debate over entitlements is about a long-term solution to a long-term problem. Much more important than getting a deal is getting a good solution.

Can we get a good solution now? Of course not. The partisan divide is deep.

If the president is so concerned with his legacy, maybe he should start doing more of the right things, like restoring traditional tax rates on the wealthiest. Today, CEOs and financiers pay much lower effective federal tax rates than doctors. That is socially unsound.

And if Obama wants to help Social Security, he should start by lifting the cap on taxable earnings.

David Greene

San Pedro

***

Doyle McManus suggests the president is doing "the kind of thing a second-term president can do." Later, he says the president's proposal is evidence that he "still yearns for a grand bargain."

The former declaration is an empty explanation, while the latter justification provokes the question: A grand bargain for whom? Certainly not for the elderly and disabled dependent on Social Security.

Ben Miles

Huntington Beach

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White House and Senate Dems Should Eliminate Social Security Tax Cap for the Rich: Stop CPI Scam on Elderly

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Your Daily Dose of BuzzFlash at Truthout, via my pal Mark Karlin:

[B]ecause the Obama White House has adopted the austerity meme of the Republicans, the option to the cat food chained CPI doesn't get discussed much.  That is because Obama, as is often the case, is accepting the GOP and Wall Street "frame" of the deficit being reduced, in part, on the backs of the middle class and poor.  As we've noted recently; the president may even believe the false meme.

... Remapping Debate, in an April 10 article, Remapping Debate disclosed:

For all the talk of the Social Security system running out of money, it is well established that raising or eliminating the cap on the wages subject to payroll taxes would guarantee a healthy Social Security system for many decades, and do so without cutting benefits or raising the retirement age.

Public support for elimination of the payroll tax cap is high.  [...]

Nevertheless, these routes to ensuring the promises made to workers that they could rely Social Security benefits are kept is little discussed on Capitol Hill. [...]

... That is probably because they don't want to be undercutting the position of their party's president. [...]

In The Nation, William Greider developed an interesting theory:

In fact, there is an even bigger lie concealed by the fiscal scolds and ignored by witless media, too. Again and again, self-righteous critics have portrayed Social Security as the profligate monster borrowing from the Treasury and sucking the life out of federal government.

Guess what? It's the other way around. The federal government borrows from Social Security.  [...]

That is the real crisis that makes the financial barons and their media collaborators so anxious to cut Social Security benefits. They would like to get out of repaying the debt—that is, giving the money back to the people who earned it. The only way to do this is cut the benefits—over and over again. Count on it...

Please read the entire post here.

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Elizabeth Warren on Pres. Obama's chained CPI proposal: "We cannot allow Social Security to be dismantled inch by inch."

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From my inbox (bolding is mine):

Elizabeth Warren for Massachusetts

Hi Laffy,

My brother David has always had the special spark in our family.

Like our two older brothers, David served in the military. When he got out, he started a small business -- and when that one didn't work out, he started another one. He couldn't imagine an America where he wasn't living by his wits every single day.

Year after year, my brother paid into Social Security. He never questioned it. He figured he was paying so that he -- and a lot of other people -- could have a secure retirement.

Today my brother lives on his Social Security. That's about $1,100 a month. $13,200 a year.

I'm telling you my brother's story not because it's unusual, but because it's like the story of so many other people. I can almost guarantee that you know someone -- a family member, friend, or neighbor -- who counts on Social Security checks to get by.  

That's why I was shocked to hear that the President's newest budget proposal would cut $100 billion in Social Security benefits. Our Social Security system is critical to protecting middle class families, and we cannot allow it to be dismantled inch by inch.    

The President's policy proposal, known as "chained CPI," would re-calculate the cost of living for Social Security beneficiaries. That new number won't keep up with inflation on things like food and health care -- the basics that we need to live.

In short, "chained CPI" is just a fancy way to say "cut benefits for seniors, the permanently disabled, and orphans."

Two-thirds of seniors rely on Social Security for most of their income; one-third rely on it for at least 90% of their income. These people aren't stashing their Social Security checks in the Cayman Islands and buying vacation homes in Aruba – they are hanging on by their fingernails to their place in the middle class.

My brothers and I grew up in an America that invested in its kids and built a strong middle class. An America that allowed millions of children to rise from poverty and establish secure lives. An America that created Social Security and Medicare so that seniors could live with dignity.

We can't chip away at America's middle class and break the promise we make to our seniors.

Thank you for being a part of this,

Elizabeth

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"So the White House can't get even a basically Republican budget passed."

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I expressed my disappointment over President Obama's alleged proposed cutbacks to Social Security and Medicare in my previous post, Sen. Bernie Sanders: “Having [Obama] go back on his word will only add to the rampant political cynicism…”

I also provided a way to contact your Senators.

And with that, your Daily Dose of BuzzFlash at Truthout, via Mark Karlin: 

Obama either continues to believe in the now inexcusably naïve notion of "bi-partisanship" or he is, as some will argue, at heart a fiscal corporate neo-liberal Wall Street true believer [...]

The NYT, which clearly received the leak about the Obama budget from White House sources, is reflecting an Oval Office viewpoint that the president is compromising in order to win over "moderate" Republican votes.  Say what? Earth to planet Obama: have you learned nothing from continually starting negotiations with the Republicans letting them advance to 10 yards of their goal – and them allowing them to walk over into the end zone for a victory twist and shake?

If you want to know the low threshold of weakness Obama is negotiating from, read the viewpoint of his aides, as reported in the NYT:

Neither the president nor senior aides privately hold much hope that Republican leaders — Mr. Boehner and Senator Mitch McConnell of Kentucky, the Senate Republican leader — will compromise. So Mr. Obama’s strategy of reaching out to other Senate Republicans reflects a calculation that enough of them might cut a budget deal with the Democratic Senate majority. If that happens, the reasoning goes, a Senate-passed compromise would put pressure on the House to go along.

Uh, so the White House can't get even a basically Republican budget passed – with some crumbs of federal spending.  They have to, as they see it, concede grovel and pray.

Bill Clinton said a long time back: "We [Democrats] have got to be strong. When we look weak in a time where people feel insecure, we lose.  When people feel uncertain, they'd rather have somebody who's strong and wrong than somebody's who's weak and right."

Doesn't Obama run the danger, in his budget and many of his legislative proposals of appearing both weak and wrong?

Or is it that he actually believes in what he is proposing? [...]

[H]istory will judge him – and the seniors, unemployed, and poor who watch helplessly -- as President Obama thrusts a stake through the heart of the New Deal, while perpetuating a system of systemic oligarchy.

Please read the entire post here.

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Sen. Bernie Sanders: "Having [Obama] go back on his word will only add to the rampant political cynicism...”

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Hey, remember this? V.P. Biden “flat guarantees” no changes in Social Security, which “effectively takes Social Security off the table.”

So this happened: Obama budget would cut entitlements in exchange for tax increases:

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 proposes, for instance, to change the cost-of-living calculation for Social Security in a way that will reduce benefits for most beneficiaries, a key Republican request that he had earlier embraced only as part of a compromise. Many Democrats say they are opposed to any Social Security cuts and are likely to be furious that such cuts are now being proposed as official administration policy. [...]

Overall, the budget request reflects Obama’s stark shift in strategy over the last month, as he has adopted a far more congenial posture toward the opposition...

“Millions of working people, seniors, disabled veterans, those who have lost a loved one in combat, and women will be extremely disappointed if President Obama caves into the long-standing Republican effort to cut Social Security,” Sen. Bernard Sanders (I-Vt.), who caucuses with Democrats, said earlier this week, after reports surfaced that Obama might include the change in his budget.

“In 2008, candidate Barack Obama told the American people that he would not cut Social Security. Having him go back on his word will only add to the rampant political cynicism that our country is experiencing today.”

"Disappointed" indeed.

Why does President Obama still not grasp that Republicans do not like him  (maybe he does), refuse to compromise (maybe he doesn't), and will continue to do everything they can to obstruct sensible Democratic plans and to make mincemeat of his legacy? They've always wanted him to fail, and they continue to want him to fail. They're doing whatever it takes to make that happen. As has always been the case, they have no intention of working with him, only against him, the well-being of the rest of us be damned.

Why does he still insist on bargaining from the center and moving right instead of starting from the left and moving center-left? Well, for one thing, as I've always said, he's no liberal, as I made clear in this post:

...President Obama’s willingness to cut Social Security benefits? Or his strong consideration of signing off on a disaster-in-waiting (see: State Dep’t. draft report looks promising for backers of Keystone XL pipeline)? Or his indefinite detention of detainees at Guantanamo Bay? Or his stance on wiretaps? Or his reluctance to go after Bush, Cheney, and company for lying us into a fraudulent invasion of a sovereign country and torturing prisoners? Or allowing nearly all of the Bush tax cuts to remain in place? Some liberal.

It's one thing to be realistic and understand where a deal will likely end up. It's another to break promises, to doom any chances of keeping the programs intact that those on the left (and most voters) hold dear and rely upon, and to cater far more to those on the right.

The GOP was going to reject Democratic ideas regardless of what the president came in with, so why not begin negotiations with a more Progressive stance and one that is more popular overall?

Here's an idea, why not eliminate the payroll tax earnings cap? Oh, and there's this. The sequester was designed to force Democrats into supporting a Grand Bargain.

The following chart is from StrengthenSocialSecurity.org. Please follow the link to see how proposed changes would also affect veterans, and so much more.You can find more charts and information here, too.

chart social security chained CPI

The important thing to know is that this change would cut the benefits of all beneficiaries, including current retirees, disabled workers, and others–even after politicians promised repeatedly that any changes to Social Security would not affect current beneficiaries. The COLA cut is a real threat to the financial security of every American who does currently or will rely on Social Security.

And please read Why Social Security Recipients Shouldn't Be Shackled With The Chained CPI. More here.

The always astute Dave Johnson (@dcjohnson) had this to say in an email:

The Obama budget is going to offer "Grand Bargain" cuts in Social Security and Medicare, hoping to get Republicans to offer tax increases. We are heading into a retirement crisis. The 401K experiment didn't work. Companies have pulled back on pensions. And the squeeze that has been on regular people for decades means that people also do not have the savings they need to get them through old age. And all the money went to the top. The last thing the country needs is cuts in essential services for the elderly.

Who Could Have Predicted:

"If the president believes these modest entitlement savings are needed to help shore up these programs, there's no reason they should be held hostage for more tax hikes. That’s no way to lead and move the country forward," Boehner said in a statement.

If they say they are offering to "protect"  the oldest and poorest from this, then what does this mean is going to happen to the rest?

Want to try to make a difference? Contact your Senators here. I just did.

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Bernie Sanders: Grand bargain could be grand sellout

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Bernie Sanders wrote a piece that is up at his website about the not-so-grand "grand bargain." I've never been a fan, nor has he, nor have most Progressives I know.

Why there hasn't been more attention paid to the Congressional Progressive Caucus's Back to Work Budget is beyond me. The Progressive describes it as "the humane budget":

This is a fundamentally humane proposal. It has a stated goal of eradicating poverty, and a target of cutting poverty in half in ten years.

It puts the problem of the jobs deficit ahead of the budget deficit, and makes a major investment in infrastructure.

In many ways, it makes good on the promises that won President Obama both his first and second terms. [...]

As the Progressive Caucus puts it: “This is what the country voted for in November. It’s time we side with America’s middle class and invest in their future.”

Please link over and take a look.

Now back to Bernie Sanders's piece:

The media appear fixated about when and if a so-called “grand bargain” on our economy will be reached. Wrong question! The question we should be asking is: What should be in a “grand bargain” that works for the average American?

At a time when the middle class is disappearing, 46 million Americans are living in poverty and the gap between the very rich and everyone else is growing wider, we need a “grand bargain” that protects struggling working families, not billionaires. [...]

We must not cut Social Security, disabled veterans’ benefits, Medicare, Medicaid, education and other programs that provide opportunity and dignity to millions of struggling American families. [...]

[T]he United States has the most unequal distribution of wealth and income of any major country on earth and that inequality is worse today than at any time since the late 1920s. [...] The distribution of income is even worse. [...]

We need a budget that puts millions of Americans back to work in decent-paying jobs by rebuilding our crumbling infrastructure and transforming our energy sector away from fossil fuels and into renewable energy and energy efficiency.

We need a budget that keeps the promises we have made to our seniors, veterans and the most vulnerable by protecting Social Security, Medicare and Medicaid benefits. [...]

We need a budget that makes sure that the wealthiest Americans and most profitable corporations pay their fair share of taxes. [...]

We must reject any approach that continues the economic assault on working families.

I chopped this one to bits, so please link over to read it in full.

bernie sanders chained cpi social security

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