|President Barack Obama slipped the controversial "chained CPI" formula for cutting Social Security cost-of-living increases into his 2014 budget, angering liberal Democrats in the Senate, the House, and progressive organizations.|
When Barack Obama introduced his 2014 budget today, one controversial item made it look more like the kind of austerity plan that might have been devised by formidable British Prime Minister Margaret Thatcher than a fiscal proposal by a “stateside” Democratic president.
a chained measure of inflation for cost-of-living adjustments” broke a campaign promise not to cut benefits for current or near-term retirees. The move infuriated progressives, who delivered 2 million petition signatures to the White House yesterday, demanding that the item be expunged.
An Obama adviser termed the infamous “chained CPI” budget item a “goodwill gesture” to Republicans. The president himself, according to Politico, viewed it as serving “a tactical purpose” by proving he’s not afraid to “flout party orthodoxy.” Liberal organizations like MoveOn, the Progressive Change Campaign Committee, the National Organization for Women, and the Campaign for America’s Future called it a betrayal.
I call using the left (by goading them into a heated public confrontation purely to score points with his opposition) unmitigated, full-throttle political posturing.
New formula would cost retirees $112 billion
Obama might have paid more heed to the lessons of recent history before attempting to foist chained CPI on the American electorate. This ill-advised modification of the formula for calculating the consumer price index — a “market basket” of goods and services on which annual cost-of-living adjustments (COLAs) to Social Security are based — would result in what the AARP has understated as “not a small benefit change” for the oldest and most vulnerable retirees, as well as for military veterans.
As economist Robert Reich observed in a videotape last week introducing an anti-CCPI petition later submitted to the president:
“The idea is that when prices go up, most people substitute lower-cost items. So a true calculation of the cost of living should take account of this substitution effect. This makes no sense for seniors, because they spend 20 to 40 percent of their incomes on health care, and they can’t substitute lower-cost alternatives.”AARP estimates that chained CPI will cost Social Security beneficiaries $112 billion and veterans $25 billion during the next decade. Because the formula compounds benefit reductions over time, it will result in an annual benefit that is “roughly $1,000 (in 2012 dollars) lower by the time a beneficiary reaches age 85,” according to AARP’s Josh Rosenblum. “Eventually, … beneficiaries would lose a month’s worth of benefits every year.”
For disabled veterans, the reduction is even more severe. "Permanently disabled veterans who started receiving disability benefits at age 30 would see their benefits cut by ... $3,200 a year at age 65," wrote AARP's David Certner, who met with Andrew Biggs of the conservative American Enterprise Institute and discussed CCPI's tax ramifications. As Biggs noted:
"You want to have (Congress) do something. You don't want to have them do something really crappy, though. ... On the Social Security side, it's not good policy. On the tax side, it's not good. At some point, you say it's not good policy."
CCPI 'an idea not befitting a Democratic president'
"Mr. President, the chained CPI is a cut to Social Security benefits that would hurt seniors. It's an idea not befitting a Democratic president. If you want to reform Social Security, make the wealthy pay their fair share by lifting the cap on income subject to Social Security taxes."That was the message delivered by former Secretary of Labor Reich’s petition. On this side of the pond, liberal economists like Reich and Paul Krugman agree with advocacy groups for retirees and veterans that CCPI is a raw deal for Social Security recipients.
Mme. Thatcher once opined:
"I think we have gone through a period when too many children and people have been given to understand, ‘I have a problem; it is the government’s job to cope with it,’ or ‘I have a problem; I will go and get a grant to cope with it’; ‘I am homeless, the government must house me!’ … They are casting their problems on society, and who is society? There is no such thing. There are individual men and women, and there are families."
Even tax-averse millionaires hate chained CPI
Chained CPI has a single dubious claim to fame: virtually everyone loathes it, from wealthy investors to veterans, from aged “pensioners,” as the Baroness would have called them, to hordes of boomers on the brink of retirement.
Everyone, of course, except Thatcherites “dismissing Britons in need as parasites and wastrels” (in the words of progressive blogger Richard Eskow), like-minded congressional Republicans — and, now, our own inconstant leader. The Barack Obama of hope and change has transformed himself into someone that his once-loyal liberal base no longer recognizes.
Our peerless 2008 presidential nominee, whom we hurried to endow with shimmering waves of potentiality and purpose, turned out to be a mirage. Like the Nobel committee did a year later, we pinned on Candidate Obama our most quixotic aspirations, as the seemingly interminable nightmare of the Bush/Cheney oligarchy neared its bitter denouement.
|Wisconsin Governor Scott Walker/AP photo|
Despite an impressive record of policy achievements, Barack Obama is not now, nor has he likely ever been, the transformative president he vowed he would become if we worked our collective asses off to put him in office. Home safe after his successful reelection; dissed and thwarted by GOP obstructionists so many times, you’d think he swear off any notion of a “grand bargain,” he’s still trying to burnish his bipartisan cred. The far right may brand him a socialist, but Obama governs, as many on the left complain, like a predictable, center-right Clintonian Democrat or a moderate Republican — not the progressive icon we so badly needed him to be.
The 44th president talks a pretty good game, but he slow-jams the news.
Congressional firebrand Sanders takes action
|Senator Bernie Sanders of Vermont/AP photo|
|Rep. Alan Grayson of Florida|
In the words of the troubadour, it’s lonely at the top, and — as I’m sure the Iron Lady could have told us if her lips weren’t sealed against anyone’s ears but Saint Ronnie’s —– as magnetic as the polar north.