Social Security: The Coming Cave-in

[laughingliberal]

If you think the Democratic base is mad at Obama now for making a craven deal with Republicans that continues tax breaks for the richest Americans and adds new ones for their heirs through a big cut in the estate tax, just wait a few weeks until Obama caves on Social Security.

How will this occur? The deficit commission appointed by the President has called for an increase in the retirement age, as well as other cuts in benefits over time. And the deal that Obama made with the Republicans just gave deficit hawks new ammunition by increasing the projected deficit by nearly $900 billion over a decade. Social Security will be in the cross-hairs.

The deficit commission has tried to camouflage these cuts by emphasizing that Social Security benefits for the very poor would not be reduced, and might even be increased. But in the commission's proposal, the cuts would affect middle-class retirees. Larry Summers, who is stepping down as Obama's economic chief, has refused to rule out cuts.

Social Security has also been softened up by the element of the tax deal that temporarily cuts payroll taxes. Supposedly, the trust funds will be made whole by a transfer from general government funds. But this increases the deficit.

So Obama has created a kind of pincer attack on Social Security. One arm is the deficit commission, which has created the blueprint. The other is the tax-cut deal, which increases the deficit, adding to the artificial hysteria that Social Security is going broke. Meanwhile, the right is playing a very cute game, congratulating Obama for the deal. According to columnist Charles Krauthammer, writing in Friday's Washington Post, "Barack Obama won the great tax-cut showdown of 2010." Really? How did he do that? It sure looked like he got rolled. "The President negotiated the biggest stimulus in American history, larger than the 814 $billion 2009 stimulus package."

Read more: http://www.huffingtonpost.com/robert-kuttner/social-security-the-comin_b_795582.html