Wednesday, February 27, 2013

The Austerity Barbarians At the Gate: And What's with the Chained CPI Still in Play?

John Boehner blubbered and huffed all through his interview with Scott Pelley yesterday. "We need the Senate to stop sitting on its ass and pass that bill!"

Huh? WHO was taking a vacation the past ten days, Mr. Speaker? Are you still in a parallel universe? Anyway, Mr. Boehner still demands more spending cuts in order to appease his austerity Barbarians, now salivating at the gate.

But I don’t get it! We’ve already had by proportion two dollars of spending cuts for every increase in revenue, despite the fact it was a revenue implosion (via unpaid for ‘wars’, tax cuts) that dug us into this mess. So why are even more spending cuts being demanded as a way to preserve the existing small growth economy?

Even this morning (MSNBC), Pat Toomey (R-PA) was bleating nonsense about closing loopholes to then be able to LOWER marginal tax rates and “unleash the power of the economy”. NO! NO! NO! You aren’t going to unleash anything but larger deficits and debt as you grind the economy to a halt. The evidence has already been manifestly shown that NO tax cuts of ANY kind work for enhancing growth!

Matt Miller showed this in spades in his ‘The Tyranny of Dead Ideas’ (tax cuts being a ‘dead idea’ still retained out of a long held supply side mythology). Meanwhile, The Financial Times in its issue of 9/15/10 showed the Bush tax cuts to be the frauds they are by not even having achieved the most modest growth objectives. Their main conclusion? "The 2000s were the weakest decade in U.S. postwar history for real, non-residential capital investment. Not only were the 2000s by far the weakest period, the tax cuts did not even curtail the secular slowdown in the growth of business structures. Rather the slowdown accelerated to a full decline".

So why do Repuke tax cut fetishists hold on to them? Because they are a convenient means of “starving the Beast” along with unpaid for wars. In this way they believe they can ensure cooperative Dems will cut domestic spending, when they ought to be increasing it!

Flash forward to the current situation and the coming “sequester”. Barring an unlikely last minute deal, here's a short list of some of the massive, national bi-partisan-created austerity cuts arriving by Friday, according to the New York Times:

-600,000 food stamp recipients will be cut from the program

-Massive education cuts

The first will be murderously brutal given 1 in 3 kids in marginal income families ($24,000/yr for a family of 4) is already going to bed hungry and the mean benefit is only $3 /day with food stamps running out for most families within 3 weeks. A new documentary film, A Place At the Table’ will highlight this abomination in the alleged “richest nation” on Earth. The sad thing is now these people will be in worse straits, all because the Repukes don’t want to even close one tax loophole for the richest hedge fund managers, or stock brokers, traders. See my earlier blog ( on why the Rs are wrong, dead wrong on not increasing taxes!

Meanwhile, we learned this morning (‘Morning Joe’)that  most college students don’t even want to hear the word “sequester” and they flee from any subject tag for a blog, or tweet bearing it. Well, I hope not! The fact is they will be adversely affected in terms of being able to secure further (government-based)  college loans if this thing goes through. When your future interests are at stake you do pay attention, and you try to learn how your own welfare is threatened. In addition, thousands of teachers will be laid off as the federal support purse strings dry up, including for ‘Head Start’ and ‘Race to the Top’.

Other impending cuts:

-12 billion in Medicare cuts (more to come after 2013)

-Millions receiving unemployment will see their checks cut by 11% (an average of $132 a month)

So don’t tell me that the amount of the cuts ($85b) is ‘trivial’ or regurgitate the Repuke line that “Obama is using scare tactics”.

Note this is just for 2013. The current plan for the austerity "sequester" cuts is $100 billion of federal cuts every year for ten years, equaling massive cuts to jobs, Medicare, education, and completely destroying federally funded social programs.

We will be laid waste as never before, and left as a marginal Third World nation, perhaps even worse than Barbados.

Now, WHO is to blame? Despite the finger pointing in Washington, D.C. and the sequester being described as “stupid” (e.g. no targeted cuts) in many quarters, in reality both Democrats and Republicans created these "sequester" cuts (back in 2011 with the really stupid debt ceiling increase and Obama unwilling to invoke the 14th amendment instead) , and they can just as easily undo them with a snap of the finger. But both parties are choosing not to delete the cuts. They just don't want political responsibility for the fallout, which many economists have predicted will push the U.S. economy over the edge into official recession.

Obama could also just as easily appeal to the American public —over the heads of congressmen — to demand that the cuts be shelved forever. Instead, he's still proposing a "grand bargain” deal that he knows the Republicans won't go for.  What's in Obama's grand bargain deal? According to the White House website :

-$130 billion in "savings" [cuts] to Social Security, by implementing a superlative CPI'
-$35 billion in "savings" [cuts] to the retirement of federal employees.

- $400 billion in health care "savings" [cuts], much of it Medicare cuts.

Obama (cynically, in the minds of some) fails to mention the words Social Security or Medicare in the above plan, choosing instead to write in code "superlative Consumer Price Index". But there’s nothing ‘superlative’ about prolonged, corrosive cat food cuts that demeans seniors, especially those who do not have the wealth to sustain lowered adjustments to inflation over time. Already Bernanke and his Beltway Club of “serious people” (e.g. assholes) are pushing the BS there’s “no inflation”, despite fuel, food, and medical costs soaring. Seniors even with moderate incomes therefore will be shafted as the chained CPI kicks in and woe betide them if a medical catastrophe strikes – especially with Medicare cuts on a $400 b scale.

Most real progressives’ jaws dropped last week when, incredibly, White House spokesman Jay Carney  told a press conference that Obama is a  "macho man". He told the reporters that President Obama is still willing to cut Social Security benefits by using the Chained CPI as the basis for the annual cost-of-living adjustment (COLA).  Believe me, Mr. Carney, there is nothing "macho" about sending 45 million seniors into cat food diets, and  forcing them to grovel in dumpsters for remains of kibbles when their meds end up breaking the bank!

This willingness to cut the benefits of retirees is presumed to establish President Obama as a “serious person” in elite (read: NEOLIBERAL)  Washington circles. But in progressive circles it defines him as a wuss and enabler of the Repukes. Moreover, it will defame the Dem brand in perpetuity if he goes through with this BS, marking him as the destroyer of the primary principles first put forward by FDR, JFK etc. Is THAT really worth a “legacy”?

Likely most of the D.C. Neoliberal insiders (e.g. Fareed Zakaria, Bob Woodward, Joe Klein etc.) probably don't understand the Chained CPI. However, everyone else should recognize that this technical fix amounts to a serious cut, never mind the odious PR to disguise it. It reduces benefits compared with the current schedule by 0.3 percent annually. This adds up over time. After someone has been getting benefits for 10 years, the cut in annual benefits is 3 percent, or equivalent to one whole month of Social Security. After 20 years, people would be seeing a benefit that is 6 percent lower, and after 30 years their benefit would be reduced by 9 percent. (For those interested, AARP has a nice calculator that shows how much retirees can expect to lose from the Chained CPI.)

Now, one can certainly debate whether the Chained CPI should be viewed as a "large cut," but there is no debate that Chained CPI cut imposes a bigger hit to the typical retiree than the ending of the Bush tax cuts were to the typical high-end one percent earner. Social Security provides more than half of the income for almost 70 percent of retirees. This means that the 3 percent cut in Social Security benefits amounts to a reduction in their income of more than 1.5 percent.

Let us sincerely hope that Obama isn’t gaming us, and trying to disguise an underlying Neoliberal instinct with progressive rhetoric. We didn’t go “all in” with him last November just to put a Neoliberal plant into office, when voters chose him because the alternative, “Mittens”, planned to do just what Carney proclaims Obama is “macho” enough to do now.

We deserve better. It’s time for Obama to show he is a fighter and for the Middle Class, including not enabling cuts to cripple seniors in their most vulnerable years.

Mr. President, take DOWN that CPI proposal from the White House site! Do NOT, I repeat do not, seek any "grand bargain" with the Republican ratfuckers!

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