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Wed Dec 19, 2012, 04:23 PM

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:
With so much of government set to autopilot, the measurement we use for inflation plays a very important role in public policy. Currently, the federal government generally relies on the consumer price index (CPI) to index provisions of the budget and tax code to account for cost-of-living changes. However, this measure actually overstates inflation and, as a result, drives up the deficit unnecessarily.

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/

31 replies, 4342 views

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Reply EZRA KLEIN: The TRICK Washington Is Using To CUT Social Security and Medicare (Original post)
Segami Dec 2012 OP
spanone Dec 2012 #1
still_one Dec 2012 #5
msongs Dec 2012 #13
Segami Dec 2012 #10
WorseBeforeBetter Dec 2012 #12
happyslug Dec 2012 #27
leveymg Dec 2012 #2
JEB Dec 2012 #20
bhikkhu Dec 2012 #28
amandabeech Dec 2012 #30
leveymg Dec 2012 #31
Janspece Dec 2012 #3
HiPointDem Dec 2012 #4
leftstreet Dec 2012 #6
bullwinkle428 Dec 2012 #7
leftstreet Dec 2012 #9
reformist2 Dec 2012 #8
byeya Dec 2012 #11
Segami Dec 2012 #17
xchrom Dec 2012 #14
Fantastic Anarchist Dec 2012 #15
JEB Dec 2012 #21
dougolat Dec 2012 #24
ReRe Dec 2012 #16
colsohlibgal Dec 2012 #18
LineReply +
underpants Dec 2012 #19
Poll_Blind Dec 2012 #22
Little Star Dec 2012 #23
Quantess Dec 2012 #25
grahamhgreen Dec 2012 #26
woo me with science Dec 2012 #29

Response to Segami (Original post)

Wed Dec 19, 2012, 04:24 PM

1. why isn't boehner jumping on it?

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Response to spanone (Reply #1)

Wed Dec 19, 2012, 04:30 PM

5. Republicans are still doing everything to make Obama look bad. They can tell him something one day

And reverse the next

Perfect example is McConnell bringing up something he thought democrats would not want to vote on and when they did he filibustered his own bill

Regardless, cutting SS through cola is bullshit

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Response to still_one (Reply #5)

Wed Dec 19, 2012, 04:48 PM

13. this trategy has worked for 4 years, why would they stop now? nt

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Response to spanone (Reply #1)

Wed Dec 19, 2012, 04:37 PM

10. ANY deal Boehner shakes on will include some form of 'raising taxes'.

....."Beware The Ides Of March" and backbench tea baggers.

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Response to spanone (Reply #1)

Wed Dec 19, 2012, 04:40 PM

12. 1) He wants Bush tax cuts extended to $1M; 2) he doesn't consider national debt interest savings...

real cuts; and 3) Obama's plan does not include a 1:1 ratio of spending cuts and revenue.

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Response to spanone (Reply #1)

Thu Dec 20, 2012, 10:01 PM

27. Because Social Security is popular, as are the rest of the Federal Entitlements.

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").

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

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Response to Segami (Original post)

Wed Dec 19, 2012, 04:27 PM

2. IMPORTANT POINT: chained CPI is one of the most regressive approaches to cutting Social Security.

Not acceptable. Not even relevant to The Cliff. This is sheer opportunism by Obama to carry out one of his most reactionary policy agendas.

No!

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Response to leveymg (Reply #2)

Wed Dec 19, 2012, 07:20 PM

20. Absolutely

No f-ing way. Grandma and disabled Vets already did their part for this miserly country. Let Boner and the plutocrats suck it. Call their bluff. Off the cliff. It's the best deal we can get from those blood suckers.

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Response to leveymg (Reply #2)

Fri Dec 21, 2012, 12:03 AM

28. Chained CPI, as proposed by the president, is the opposite

In that the reductions in benefits over time are offset by other measures to guarantee the actual money-in-pocket to those who rely on it most remains the same. Those with multiple income streams would not be so protected, so in essence it is a "means-test" for the cost of living increases. Which is the opposite of regressive, as it shifts the benefits slightly more toward those who depend on them most.

...which is neither here nor there, when it comes down to it, as the likelihood of it passing congress is very small. I do find it annoying that people will pretend to tell you what Obama "really means to do", and then usually offer some fact-free bile. If you want to know what he is thinking, listen to what he is saying.

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Response to bhikkhu (Reply #28)

Fri Dec 21, 2012, 12:35 AM

30. If Dems are willing to chain CPI for SS, then who's to say that they won't do the same for SSI,

which I assume is the program to which you refer.

I do listen to what the President says, and too many times I find him talking like a moderate to conservative Republican.

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Response to bhikkhu (Reply #28)

Fri Dec 21, 2012, 05:42 AM

31. Well, then, he should simply say "means-testing for incomes over" and set an amount. But, this

isn't even the time to bring it up. Take it off the table, and deal with SS separately next year as it's not a Cliff item, unless this is just some sort of poison pill.

I understand that there's a theory that SS is an entitlement, hence, it shouldn't be subject to direct means testing. But, I really don't buy that line. Also, the whole supposed solvency problem would be solved if the cap were raised.

So . . . Mr. President, when you finally do get to SS, JUST RAISE THE FRACKING CAP!

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Response to Segami (Original post)

Wed Dec 19, 2012, 04:27 PM

3. Take Social Security Off The Table

 

Boehner Keeps Moving The Goal Posts

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Response to Segami (Original post)

Wed Dec 19, 2012, 04:28 PM

4. kr

 

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Response to Segami (Original post)

Wed Dec 19, 2012, 04:31 PM

6. DURec

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Response to Segami (Original post)

Wed Dec 19, 2012, 04:33 PM

7. So this is an element of Simpson-Bowles being ramrodded through.

Who'da thunk it?

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Response to bullwinkle428 (Reply #7)

Wed Dec 19, 2012, 04:35 PM

9. Yep, they were all for chained CPI

But we were told by the party cheerleaders there was !!! NO WAY !!! Obama would ever take that into consideration

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Response to Segami (Original post)

Wed Dec 19, 2012, 04:34 PM

8. Just cut to the chase, Ezra. Chained CPI is a lie and a fraud that will cut SS benefits by 10%.

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Response to Segami (Original post)

Wed Dec 19, 2012, 04:38 PM

11. The CPI was recomputed years ago to avoid any over stating of inflation. To do so again

 

is a naked attempt to cheat people whose income is based on the CPI. A dirty trick and a lie in my opinion.

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Response to byeya (Reply #11)

Wed Dec 19, 2012, 06:49 PM

17. Lets wait and see the final script to this Kabuki Theater Act.

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,.....

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Response to Segami (Original post)

Wed Dec 19, 2012, 04:54 PM

14. Du rec. Nt

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Response to Segami (Original post)

Wed Dec 19, 2012, 05:37 PM

15. For Fuck Sake!

Cut the DoD, not SS!

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Response to Fantastic Anarchist (Reply #15)

Wed Dec 19, 2012, 07:24 PM

21. DoD is the fattest , most corrupt

bunch of pigs at the trough. Off the cliff is probably the only way we'll ever make any cuts to that sacred cow.

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Response to JEB (Reply #21)

Thu Dec 20, 2012, 03:20 PM

24. +1...nt

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Response to Segami (Original post)

Wed Dec 19, 2012, 05:53 PM

16. Policy by Confusion

Kabuki theater. Shell game. Can't wait until New Year's Day. Wishing my life away.....

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Response to Segami (Original post)

Wed Dec 19, 2012, 06:55 PM

18. It's Just Maddening

Even if we don't do this, why is it even a possibility? Why are we negotiating like the R's have the upper hand?

The defense budget is bloated and the Pentagon even knows that. Wealthy folks are often paying less in taxes than their secretaries. But both parties would rather take from seniors with little money.

We need a party to the left of the historical republicans, they being the 21st century big D Democratic Party.

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Response to Segami (Original post)

Wed Dec 19, 2012, 07:20 PM

19. +

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Response to Segami (Original post)

Wed Dec 19, 2012, 08:59 PM

22. DU REC +1 nt

PB

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Response to Segami (Original post)

Thu Dec 20, 2012, 10:48 AM

23. k&r

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Response to Segami (Original post)

Thu Dec 20, 2012, 06:07 PM

25. This looks like a good read.

I will read it tomorrow when I have more time.

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Response to Segami (Original post)

Thu Dec 20, 2012, 08:25 PM

26. SOCIAL SECURITY DOES NOT ADD ONE NICKEL TO THE DEFICIT! nuff said.

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Response to Segami (Original post)

Fri Dec 21, 2012, 12:30 AM

29. K&R Superb article,

not the least because it points out what is NOT on the table, and should be.

The one percent do a terrifyingly effective job of setting before the American people only the options that they prefer, and convincing us that, because there is more than one of them, we have real choice.

A huge part of taking this country back will mean deprogramming ourselves from the corporate propaganda and realizing how our range of options and our sense of the possibilities available to us has been radically narrowed by the corporatists. We need to learn to think outside the corporate Matrix again.




"The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum - even encourage the more critical and dissident views. That gives people the sense that there's free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate."

Noam Chomsky

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