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In election year, Obama postpones Chained CPI Social Security cuts

Here's the view of the Democratic nomenklatura:

In 2012, due to a mix of policy judgments and election-year considerations, Obama backed off his offer to raise the Medicare eligibility age to 67. And on Thursday, he came full circle by also abandoning his proposal to slow the rate of inflation for Social Security benefits via a policy known as Chained CPI, which he included in his budget unveiled one year ago this month.

The backtracking reflects a dramatic shift since 2011, when Democrats, spooked by their thrashing in mid-term elections, were willing to slash their party's most cherished achievements.

"The days of terrible grand bargains are gone for the foreseeable future," said an aide to a progressive Democratic senator.

Well, a week is a long time in politics, so I'm not sure exactly how far out "the forseeable future" might be.

Pete Peterson still has his checkbook open, so of course Chained CPI is going to come up again; just not in an election year.

"It's not like (chained CPI) is something that's now off the table," said [National Active and Retired Federal Employees Association]'s [Jessica] Klement. "It's just not in his budget this year."

Exactly. Even Hiltzick understands this:

So the chained CPI, which was part of President Obama's budget proposal as recently as last year, is out of the budget to be unveiled on March 4.

Social Security advocates are calling that a victory, because it effectively takes the chained CPI out of the mainstream of "entitlement reform." It's a significant victory, but the danger is that it might not be lasting. Recent history shows that the dream of forcing low-income seniors to pay for budget cuts so that wealthy Americans aren't burdened with a tax increase never really dies; it just goes into hibernation.

Nobody should be going all triumphalist over postposng a grotesquely vile policy that would beat an extra thousand dollars out of an 85-year-old lady's $12K pension. Come on. If "Social Security advocates" want to what victory looks like, this would do (and I'd say it's the operational definition of "Retirement Security" in the 12-point platform):

1) Social Security eligibility starts at 60 (and not 67 for under 55s).

2) Social Security benefits are age neutral (no more of this making everything gradually worse the younger people get).

Readers?

UPDATE Atrios remarks:

I'm not totally unfamiliar with various people in the White House. As Brian Beutler writes:

One of the White House’s most poorly kept secrets is that many of Obama’s economic advisers support Chained CPI on the merits*, or believe it to be the least-bad benefit cut Obama could offer Republicans

Why would they support it on the merits? Either they're just totally bad people, angling for Very Serious People seats in the Village, or they're wedded to the notion that somehow it makes sense for Dems to cut Social Security in a slightly less horrible way than Republicans instead of, you know, making the case that an extremely popular program just doesn't need to be cut and maximizing the political backlash against the bad guys who would try. In any case, there were genuine supporters of a horrible idea, people who would have supported doing it without a bargain.

Look, these people are Democrats. I'm sure we can assume they're acting in good faith. BWA-HA-HA-HA-HA!!!!!!

* As well as Janet Yellen, one might add.

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Alexa's picture
Submitted by Alexa on

QUICK!

Get my hip waders, LOL!

Seriously, try "because the purpose of the Fiscal Commission proposal (to switch to the Chained CPI) is to enable Democrats to 'trade' entitlement cuts for tax revenues in order to carry out the Peterson (and One Percent's) wish list, without quitting military adventurism and empire building."

IOW, it's "Kabuki Theatre" at its finest, since BOTH parties are in agreement with cutting Social Security and Medicare, and "dropping marginal tax rates by broadening the base." (Raising taxes on lower income Americans.)