Krugman: Rumors of a Deal (WTF?) - updated

[ProSense]

Rumors of a Deal

It sounds as if Ezra Klein is hearing more or less the same things I’m hearing...Unlike what we’d heard from Republicans before, this contains stuff that Obama can’t get just by letting us go over the cliff: more revenue than he could get just from tax-cut expiration, unemployment and infrastructure too. But it has a cost, those benefit cuts.

Those cuts are a very bad thing, although there will supposedly be some protection for low-income seniors. But the cuts are not nearly as bad as raising the Medicare age, for two reasons: the structure of the program remains intact, and unlike the Medicare age thing, they wouldn’t be totally devastating for hundreds of thousands of people, just somewhat painful for a much larger group. Oh, and raising the Medicare age would kill people; this benefit cut, not so much.

The point is that we shouldn’t be doing benefit cuts at all; but if benefit cuts are the price of a deal that is better than no deal, much better that they involve the CPI adjustment than the retirement age.

But is this rumored deal better than no deal? I’m on the edge. It’s not clear that going over the cliff would yield something better; on the other hand, those benefit cuts are really bad, and you hate to see a Democratic president lending his name to something like that. There is a case for refusing to make this deal, and hoping for a popular backlash against the GOP that transforms the whole debate; but there’s also an argument that this might not work.

- more -

http://krugman.blogs.nytimes.com/2012/12/17/rumors-of-a-deal

Let me get this straight. The President and Democrats have repeatedly said that Social Security has nothing to do with the deficit.

Raising the age for Medicare, which is a driver of the deficit because it's linked to health care costs, is taken off the table because it's a stupid idea that doesn't save money and will "kill people."

Now there are rumors of a deal involving cuts to Social Security benefits?

What the fuck for? Why is a program that has nothing to do with the deficit being dragged into the negotiations?

Are these people seriously determined to cause seniors pain for the hell of it?

There is stupid, raising the Medicare age, and then there is fucking stupid, this current rumor.

I'm surprised at Krugman's piece after he wrote this:

Krugman: No Deal, Continued
http://www.democraticunderground.com/10022013316

Updated to add, we just had a fucking election:



What the millionaires want versus what the voters want
http://www.dailykos.com/story/2012/12/07/1162018/-What-the-millionaires-want-versus-what-the-voters-want

[Blaukraut]

1. This better not be true

I thought SS wasn't part of the deficit? Besides: Why are they so adamant on shared sacrifice when, for the last 20 years, there was no shared wealth? It's time to let the wealthy do the heavy lifting for a change.

[ProSense]

5. I seriously wonder if

they all put on clown noses when they're negotiating. This proposal is a sick joke.

[russspeakeasy]

15. and shoot seltzer down each other's pants..

[awoke_in_2003]

64. Don't ask, don't tell...

[humbled_opinion]

34. Sadly the rightwing media complex

doesn't adequately explain that issue to the masses. So they go on believing that the upper income people pay the lions share of taxes, and they never equate the massive amounts of profit that the rich receive to any amount that they do pay after they have sucked on every loophole imaginable and cheated to the point they dared.

[HiPointDem]

55. a majority of both democratic & republican voters support raising taxes on the rich. if this is

true, it's not what the voters want, it's what the leadership & their funders want.

[HiPointDem]

52. +1

[byeya]

2. Social Security has nothing to do with the deficit, assuming even the deficit is important enough

to deal with before other issues.

The President can ignore the debt ceiling: That was brought home the last time the RepubliKKKans used blackmail and gave the USA a blackeye for the world to see.

[WashingtonConsensus]

44. exactly, we've been paying it up since the 1980's

[MannyGoldstein]

3. No worries.

We've been assured, repeatedly, that Obama would never allow this.

[ProSense]

7. If he does, you get to gloat and say I told you so.

WTF?

[MannyGoldstein]

8. Not really gloating...

more like reminding people of the past so we can be real about the future.

I will take absolutely no joy in this if it happens - I desperately want to be wrong.

That being said... Obama proposed a lot of this stuff himself last year, but i guess some people see that as a bluff.

[Luminous Animal]

13. It's also a hidden tax increase on the poor and middle class...

The Chained CPI: A Painful Cut in Social Security Benefits and a Stealth Tax Hike

The Chained CPI would also effectively raise taxes on virtually all working Americans, especially middle and lower income families. By applying it to all government programs, including the annual adjustment in income tax brackets, the Chained CPI would cause those thresholds to rise more slowly than they do now. That would lead to incomes jumping up to higher tax brackets faster, or in other words, income tax increases.
According to Congress’ Joint Committee on Taxation, if individual income taxes were indexed to the Chained CPI starting in January 2013, by 2021, 69 percent of the gains in revenue would come from taxpayers with incomes below $100,000, while those in the highest income brackets would barely be affected. For example, workers with incomes between $10,000 and $20,000 would experience an increased tax burden of 14.5 percent, while those with incomes over $1,000,000 would just see an increase of 0.1 percent. 9 This contradicts the idea that the negative effects from benefit cuts due to a switch to the Chained CPI would be offset by increased revenue from the wealthy.

The above is an excerpt from a report from the Center For Economic And Policy Research. You can download the report from this page:
http://www.cepr.net/index.php/publications/reports/the-chained-cpi-a-painful-cut-in-social-security-benefits-and-a-stealth-tax-hike

[plethoro]

28. I never saw it as a bluff. If Obama cuts Social Security you

will see things you never thought possible. Mark my word.

[HiPointDem]

70. +1. if he goes for cuts, that's about it for me and the democratic party, i.e. the republican-lite

party.

[villager]

33. I would love to be wrong about an Obama capitulation, someday, myself.

Sadly, I'm still waiting.

[plethoro]

36. It was said by many on this board that entitlement cuts would be made by the lame duck

congress at the end of 2012. The path was dug in the payroll tax reductions, which I understand is not going to be extended again. (hopefully). Then they'll be made permanent. And that will be that.

[A Simple Game]

51. If this is true, there are several on DU that should seriously consider self exile.

They should just from pure shame in their inability to see beyond the end of their own noses.

[jsmirman]

53. Hey, give credit to people owning what they have said

it's an admirable trait, not to be discouraged.

JMO.

[A Simple Game]

100. I reserve judgment until we know just what is going to happen.

Let's hope it is just so much hype.

This could be very serious, the quality of life, even life itself, for many people could be impacted. Not something easily forgiven.

[jsmirman]

102. I am seriously concerned

I will say that.

And the idea that Obama could sell out much of the muscle in the coalition that has been built - is appalling to me.

I hope the Administration realizes that you cannot "fire up" a base on the basis of nothing but optics.

[Jackpine Radical]

80. You just don't understand n-dimensional chess, Manny.

[BlueCaliDem]

60. And it's been made abundantly clear in that post that this is JUST A RUMOR.

Until then, let's not run around with our hair on fire, shall we?

Besides, what cuts do they mean? The president promised NO CUTS in benefits to recipients. Cuts on waste, even cost cuts to medicine IF they institute the rule that Medicare may, again, negotiate prices, are GOOD "cuts". Actually, it's savings, but it appears a lot of people quickly label those savings as "cuts to Medicare", giving the illusion that there will be cuts to earned benefits to recipient - and I seriously doubt that's going to happen.

[MannyGoldstein]

65. First off, it's now being reported as fact

In fact, that this is Obama's own proposal.

Second, I'd love if you could provide a link to Obama promising no benefit cuts. I don't think he had since becoming President.

[BlueCaliDem]

99. Whose fact? The anonymous source's? Who is this person? A Republican mole?

Come on Manny. You're much too intelligent to be that gullible.

Yes, President Obama has stated, quite clearly, right after the elections, along with top Democrats, that there will be NO benefit cuts to social security according to Bernie Sanders on November 27, 2012, and the president has already strengthened Medicare and Medicaid via ObamaCares.

At any rate, the rumored "offer" has already been rejected by Boner through his spokesperson. Not enough "spending" cuts.

UPDATE: Boehner's spokesman Michael Steel emailed this response:

Any movement away from the unrealistic offers the President has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced. We hope to continue discussions with the President so we can reach an agreement that is truly balanced and begins to solve our spending problem.

I.O.W., as many have been posting here, they're still in negotiations, but I believe we're watching a WH and House Kabuki dance. That's all this is - to show the markets they're "seriously" working on trying to avoid the fiscal cliff (which President Obama is not all too afraid of) until the new Congress is sworn in in January, and so Boehner can keep his speakership.

Besides, even rightwing sites doubt the president would cut "entitlements" as they call them, so why are we taking this seriously considering the facts that the president has actually strengthened both Medicare and Medicaid and has taken Social Security off the table?

[HiPointDem]

84. you think they can make $400 billion in cuts to medicare & it won't affect recipients? i gotta

bridge, too...

[BlueCaliDem]

96. Yes, I do. You're forgetting that we now have the PPACA and a public option on its

way, possibly opening when the exchanges open. The Heritage Foundation has warned that the U.S. Gov't supported health policies will materialize as "a robust public option".

You, of course, are thinking of the time when we had nothing to replace it with or strengthen it other than overpriced, sub-par sick insurance. This is no longer true, thanks to the PPACA.

And you agree with me, at least, that Medicare isn't the problem. The astronomical costs of our health care is and that's where the president is focused on, if his past policies are any indication. Let's try to remember this, at least.

Barack Obama's Record on the Social Compact: {courtesy of The People's View}

1) This president enacted the largest expansion of the social safety net since Medicare. By enacting the Affordable Care Act, he established a public responsibility in paying for health insurance for those who cannot afford it, and enacted the largest health care subsidies in American history.

2) This president lengthened the life of the Medicare trust fund by eight years, also through reforms made in Obamacare. As noted above, the reforms also increased benefits in Medicare.

3) And once again through the Affordable Care Act, the president massively expanded Medicaid, by 2014 making anyone in poverty eligible for it.

4) This president signed into law the largest expansion of SCHIP, the children's health insurance program, adding 4 million children to the rolls.

5) This president expanded school lunches, Pell grants, student loans - the programs that help the less fortunate reach for opportunity and success.

Considering the unprecedented obstructionism he's had to deal with while fighting for the above, I trust he's not going to sell us out now.

[HiPointDem]

101. well, we're going to see.

[BlueCaliDem]

104. Why am I not surprised you'd respond this way? I guess nothing Obama does

will ever be good enough with the fickle leftwing of the Democratic Party.

[HiPointDem]

105. I think obama is much more presidential than bush was and michelle has been one of the best

first ladies.

i have nothing personally against the president. simply put, every president must basically do what the ruling class (or the portion backing him) wants him to.

a majority of the us population wants no changes to SS. yet the white house is proposing changes to ss. it's not the will of the voters, and it's not necessary. yet it seems to be happening. why is that?

[BlueCaliDem]

106. Why is that?

It's called NEGOTIATIONS.

President Obama damn well knows Boehner is NOT going to go for it, just like he didn't go for the other offers he'd put forward. He knows there are still too many TeaBaggers in the House to get anything done. We're still working under the likes of Allen West and Joe Walsh for chrissakes. These nutters will even allow taxes to be raised on 98% of the American people if they can't get tax cuts for the rich extended. They aren't out to negotiate. They're out to destroy this country.

Obama knows this. He also knows he has all the aces because the fiscal curb plays in his favor, not the Republicans.

[HiPointDem]

107. if the white house didn't want the terms to be public, i assume they wouldn't have released them.

the white house has not said "everybody shut up while i am negotiating!"

and having the public criticizing any move to cut social programs strengthens the president's hand.

so what are you complaining about?

[1StrongBlackMan]

4. An earlier question ...

I know the "chain CPI" is supposed to be a bad thing. I grasp the general concept; but has anyone run (and posted) how such a plan will affect those beneficiaries at the low-end and median-levels?

Secondly, would such a "reform" be a deal breaker for DUers, given the other things gained? (I think I know the answer to that one.)

[MannyGoldstein]

11. It will eventually be a 10% cut in benefits. IIRC

Over $20,000 in lifetime benefit cuts for the average recipient.

Implementing the full Simpson-Bowles recommendations would be a 22% cut, or $50,000 per recipient.

[aquart]

24. So billionaires can stay rich? NO!

[1StrongBlackMan]

39. Thanks ...

Do you have a calculator link?

[HiPointDem]

85. it'll eventually be a ticket to the cemetery, because the cuts don't end after 10 years.

but what it will probably be is a ticket to 'private retirement accounts' as the fail gets more & more obvious.

shock doctrine strikes again: first wreck it, then privatize it.

[plethoro]

76. A chained CPI if inflation goes up will be disastrous for low-income

people. A chained CPI works like this. It adjusts real inflation for what people actually do during inflation. People spend less money on things: clothes, food, etc. The chained CPI adjusts real inflation for that. So let's say inflation goes to 12%--and it will--the government bean-counters come up with a chain-cpi figure that reduces that 12 % to say 5%. And then apply it to Social Security payments--making the increases less than if real inflation were used, like always. And this difference accumulates over the years, so that after 20 years you may be paying 8 dollars for a loaf of bread whereas your chained CPI figures won't be near the inflation increases over the years because it figures you will simply stop eating expensive bread. Now, with interest rates so low for so long, when inflation takes off it will be sky-high for a while until the banksters back off.

[DJ13]

6. Oh good, so despite two years straight of zero SS COLA, the CPI they used is too lavish?

Whats next 4, 5, 6 years straight of no COLA for SS recipients, all so these assholes can play like they have made a "good" deal?

[MannyGoldstein]

12. Actually, the official CPI used for older Americans shows *higher* inflation than what's used now

They just don't want to use the official one because, you know, it shows the wrong thing. So they found another one that suits their plans better.

[neverforget]

9. I hope this isn't true!

[byeya]

10. That's right: It's the Chinese death-of-a-thousand-cuts

Lose a little to inflation each year, compounded.

[MannyGoldstein]

14. FWIW, I don't think it will happen quite this way.

Social Security cuts will not happen as part of this deal, but Medicare cuts will.

Social Security will be handled with a gentleman's agreement to cut the shit out of it strengthen it in the near future. Too many Democrats want to stay clear of indicating that Social Security drives the deficit, but they're OK with slashing benefits.

This will be the single greatest bank robbery in the history of the US if it happens. Trillions, literally trillions, looted from the Social Security Trust Fund so the wealthy can have even more money. Shame.

[Blaukraut]

16. Is raising the cap on SS payroll deductions even talked about anymore?

That would go a long way towards really strengthening it. But I haven't heard a peep about that in months.

[MannyGoldstein]

17. Nah, that would cost money for rich people. nt

[TDale313]

22. ^^^ this ^^^

Haven't heard anyone really talk about raising the cap. I think consensus is Republicans would never go for it.

[Trailrider1951]

57. It's not a robbery in their minds, Manny, it's their own money

recycled as wages in exchange for our puny lives, also known as "labor"







Labor




where have I heard that term....

[forestpath]

18. A deal to hurt the elderly and vulnerable.

Isn't it funny how the that is the one thing the two parties can always agree on.

[Lone_Star_Dem]

19. Oh, yay. Hanging us out to dry again.

WTF is right.

This better not happen. Yet somehow i won't be surprised to see a compromise by the Dems by "saving SS" from formal cuts. While they decimate medicare We'll all be expected to be grateful, too.

[plethoro]

31. If either program is cut significantly, you can

kiss both 2014 and 2016 good bye. And there will be a resurgence of the Republican Party, which is now approximately dead. The puppets of the Inverse Fascists always do as they are told.

[abelenkpe]

20. dammit

this is just a nice way of making future seniors, future generations pay for an economic crisis they did not cause. It is a betrayal. It better not be true!

[Bonobo]

21. Did you catch the "Speculative Outrage" bug or something? nt

[ProSense]

27. You misunderstand

I'm not outraged at the speculation, I'm outraged that the media is trying to push this deal.

It started with Politico pushing this as a concession by Boehner (http://www.democraticunderground.com/?com=view_post&forum=1014&pid=338282), and now it being pushed as the President's offer, which makes no fucking sense.

It contradicts everything they've said in recent days.

[Bonobo]

29. I would have assumed it is the reverse.

Instead of the media trying to drive it, isn't it much more likely that they have been asked, as usual, to float balloons?

It is the movers, the politicians, that are driving this and using the media as a vehicle.

Krugman got a phone call and had a favor called in, that's all that happened.

[ProSense]

30. It's bizarro world stupid.

In pursuit of a fiscal-cliff compromise, President Obama offered Monday to slow the growth of Social Security benefits and lower his demand for new taxes, according to a person familiar with the talks. But Obama’s counter-offer to House Speaker John A. Boehner (R-Ohio) seeks additional stimulus spending and a two-year extension of the federal debt limit, which Republicans have so far opposed.

http://www.washingtonpost.com/blogs/post-politics/wp/2012/12/17/obama-drops-tax-ask-to-1-2-trillion/

It has been established that Social Security has nothing to do with the deficit. The President has repeated this often.

Why the fuck would he offer to "slow the growth of Social Security benefits" in a deficit deal? Oooh, lets fuck over seniors for absolutely no reason because that's what Republicans want?

I wouldn't be surprised if the "person familiar with the talks" is Boehner.

[Bonobo]

35. Divorced from reality.

Republicans: We need SOMETHING to take away so it looks like a partial victory for us. Something to do with Social Security would do the trick.

DEMS: But Social Security doesn't raise the deficit one bit and this is no time to be cutting spending on stimulus either.

REPUBLICANS: Doesn't matter one bit. This is about what we can show to our consituents and wave around as proof of our toughness when the next election runs around.

DEMS: Okay, got it. It won't be popular on our side, but I'll have one of our media guys float a story about how we MIGHT be forced to give in on this one for the "big picture"
.

REPUBLICANS: Okay, you do what you gotta do.

[ProSense]

40. Groovy

REPUBLICANS: Doesn't matter one bit. This is about what we can show to our consituents and wave around as proof of our toughness when the next election runs around.

DEMS: Okay, got it. It won't be popular on our side, but I'll have one of our media guys float a story about how we MIGHT be forced to give in on this one for the "big picture"

So the Dems are negotiating for the Republicans?

When the fuck did it become the Democrats' job to save the Republican Party?

[Bonobo]

43. IMO, ANY two party "system"

will automatically lead to collusion between the two to keep it "closed".

You wash my hand, I'll wash yours. You win this time, we win next time, etc.

Collusion: Collusion is an agreement between two or more persons, sometimes illegal and therefore secretive, to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair advantage.[citation needed] It is an agreement among firms to divide the market, set prices, or limit production. It can involve "wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties".

[DJ13]

46. When the fuck did it become the Democrats' job to save the Republican Party?

When they would have died after Obama was elected because they twice elected Bush.

Thats what Obama's "lets be friends" bipartisan approach was for, giving them relevancy when they would have shriveled up and died as a national party in 2009.

Now they've mastered the filibuster in Congress, leveraging their minority status into an almost majority position as far as legislation is concerned.

This isnt news, many here had warned back in 09 that he should have been more assertive in dealing with the conservatives (in both parties), and this is the end result of him making nice.

[patrice]

23. What do Robert Reich & Senator Sanders say? Sanders has spoken strongly against CPI, right? Is this

some attempt to reduce the power of the Left?

[Fumesucker]

25. Who are you and what have you done with ProSense?

Sometimes reality really does bite, it bites so damn hard.

It's really easier not to have heroes because they all seem to have feet of clay at some point.

You and I have been at odds here quite often but I know you have a good heart, this actually hurts me a bit for you.

[on point]

26. ALL CUTS COME FROM DOD. Period.

The wealthy made out big time over the last 30 yrs while screwing the little guy. They run the economy and debt into the ground and now they want us to pay for THEIR PARTY??!!!!

HELL NO!!!

Tax the wealthy until they squeal, and then tax them some more.

Cut the DOD.

NO SAFETY NET CUTS PERIOD!!

Want to help Medicare - IMPLEMENT SINGLE PAYER --- See no benefits cut needed, just cut the insurance companies!!

[HiPointDem]

86. you can say so, but right now it stands are $100B from military, $130B from SS, $400B from medical.

half a trillion in cuts to social spending v. $100B from military.

[elleng]

32. Explanation:

'Theoretically, chained CPI seems like a totally reasonable way to think about changes in the cost of living in an economy, so it's hard to object on principle to using this measure to adjust changes in government benefits, tax brackets, and so on. In addition, there is a potential efficiency argument to be made in favor of chained CPI approach to deficit reduction. When it comes to taxes and policy changes, there are two types of costs that occur. The first is a transfer of money from households and companies to the government, and the second is a loss of economic activity that occurs (deadweight loss, in economic terms). (For example, if I value a t-shirt at $15 and you can produce it for $13, a $3 tax will prevent an otherwise value-creating transaction.) While the first cost is important from a distributional perspective, the second is important from an efficiency perspective as well. As counterintuitive as it may seem, taxes and policy changes are more efficient (not necessarily more fair, however) when people don't change their behavior in response to them, since then there is only transfer and no loss of economic activity. And hey, people can't change their behavior fully if they don't understand how policy changes are affecting them, right?

As an economist, I think that there is long-term potential to improve policy by incorporating chained CPI as a more accurate cost of living index. That said, the government shouldn't try to leverage the lack of understanding of it's citizens, efficient or not, and should instead work on educating the public about what the change means for them. In addition, the government needs to avoid a rush to adopt the index as a short-term fix without fully thinking through the logistics and distributional impact of its implementation.'

http://www.huffingtonpost.com/jodi-beggs/chained-cpi_b_2297631.html

[ProSense]

37. Sounds like rationalization

for cutting benefits.

What it doesn't explain is why a program that has nothing to do with the deficit is being forced into deficit negotiations.

Vice President Biden Speaks To Seniors About Retirement Security

<...>

While Social Security is projected to remain solvent through 2033, it will eventually face a shortfall. Some Congressional Republicans have suggested that we should address this shortfall entirely through deep benefit cuts that could cost a typical senior hundreds of dollars every month. We believe that Social Security can be preserved for future generations without slashing benefits and we will oppose any efforts to privatize or weaken the program.

http://www.whitehouse.gov/blog/2012/07/16/vice-president-biden-speaks-seniors-about-retirement-security

Stick to those points, and in context, the rumor makes no sense.

[FreeBC]

38. At this point, I'm going to trust Obama.

It's strange for a lot of us, since we are used to being smarter and more knowledgeable than the majority of our elected representatives.

But Obama continues to outsmart me. I've criticized him for several things and later on it turns out he was either right, or he was getting the best deal he could, or he was playing a long game that would work to our advantage in the long run.

We are privileged to be living in the time of one of the greatest presidents in our history. I think I'm going to try and sit back, hold my tongue, and just enjoy it a little more over the next four years.

[democrattotheend]

103. Trust but verify

I think he is doing the best he can to get the best deal he can, but I also think he is not committed enough to protecting the New Deal. Even though he believes in government providing a social safety net, and he has tried to shift the narrative to show that government can help people, he has shown too much willingness to give in on SS and Medicare. On the other hand, when people shouted down the Medicare age increase he listened (I hope - seems like that is off the table!)

So for the most part I trust him, and I believe this is the least bad offer so far, but the pressure still needs to be kept up.

I am not going to bash him or call him a closet Republican or a fraud if this ends up being the deal, but I really hope there is some way to avoid the chained CPI or at least tweak the formula to avoid hurting those most vulnerable.

[wilsonbooks]

41. http://www.washingtonpost.com/politics/obama-boehner-meet-as-debt-talks-intensify/2012/12/17/6b43c24

http://www.washingtonpost.com/politics/obama-boehner-meet-as-debt-talks-intensify/2012/12/17/6b43c24a-4868-11e2-b6f0-e851e741d196_story.html

[Hoyt]

42. I know I will get s**it for this, but I think the deal sounds

pretty good, considering (and I'm assuming it works out like this).

-No increase in Medicare age
-Significantly increased taxes on wealthy
-Significant defense cuts
-Extension of unemployment benefits
-Stimulus to improve economy
-No cuts in SS benefits other than some slow cuts that might occur through a chained CPI (and it ain't a slash, and it can be changed later) that might impact those at higher end of SS, not those at lower end.

I'm sorry, if I have read this correctly and things actually shake out this way, I'll take a slow cut through chained CPI and try to work an extra 5 hours a year in a booming economy to make up for what I just can't adjust to otherwise. Truthfully, with some of the changes in the ACA related to Medicare, the impact of an improving economy, etc., I don't think I'll need to work that 5 hours a year, but if it's necessary I will drag my tired old ass up and do it so that others who are a lot worse than me don't have to.

If this "deal" will protect seniors at lower end, improve economy for younger people who are also suffering, help the unemployed who are also suffering, begin readjusting our economy away from defense spending and war, I'm heaping praise on Obama.

I know it's not a done deal and the chained CPI is just an appeasement to the greedy, callous Republicans, but even Krugman says: "The point is that we shouldn’t be doing benefit cuts at all; but if benefit cuts are the price of a deal that is better than no deal, much better that they involve the CPI adjustment than the retirement age."

What have I read wrong in article, or are we just supposed to gripe no matter what?

[MannyGoldstein]

45. Do you know how much the chained CPI eventually cuts SS payments?

It ain't tiny.

[Hoyt]

50. Manny it's not much in early years, especially when inflation is low.

It is such small part of the overall package that I'm like Krugman. If this is the only cut that people at higher end of SS gets, I'll take it.

About 2% of what you have been scaring people with for at least two years appears it might actually happen.

Time to give Obama the credit he deserves.

Again, I'm assuming it happens as in the original article and that the lowest seniors, unemployed, youth, etc., benefit and they don't double-cross us (which us always a possibility).

[ProSense]

56. It should not be part of the deficit negotiations.

Social Security should be dealt with separately. What happened to raising the cap? The President has proposed that several times.

[Hoyt]

61. I'll bet my ass there is an increase in the cap too. You wait.

[MannyGoldstein]

62. currently, the average 65-year-old lives to 85

How much of a cut will that 85-year-old see?

[Hoyt]

73. Manny, if it gets bad they will do something in a few years ASSUMING the economy is doing well.

If economy is not doing well, you'll be looking at further cuts. If the economy is doing well, those elderly who have a small house will see it appreciate -- so a small reduction due to chained CPI won't hurt nearly as much. Those who must rent, will see the supply of rentals increase. There are changes in Medicare which will also help. And, of course, those on the lower end are supposedly going to be protected in all this.

You guys need to quit focusing on each little component and look at the big picture. As far as I'm concerned, if they make housing more affordable, health care better and affordable, provide better transportation, help younger folks get jobs so they pay into SS, etc., they can cut my SS by a bunch. I'll still be better off.

That is what Obama and Krugman are doing.

I think Krugman is right, and this is the right move at this time. Kudos to Obama if he pulls this off.

[MannyGoldstein]

75. There is zero need to make any cuts.

Zero.

Nada.

A 10% cut for 85 year olds is not a good thing, I think.

And it will hurt the broader economy as well. Social security payments get spent on things that create jobs. Tax cuts for the rich are spent on bidding up assets that have little effect on employment.

[Hoyt]

79. Thank God for Krugman to set us straight.

I basically believe that economically /fiscally there is no reason to make any cuts, except to get a deal and hurt as few people as possible, while helping others.

Besides, there may be some side deals - like rethugs not going after ACA hard, just a little posturing.

I'm comfortable with big picture, and I'm one who will take whatever actual "cut" might occur to SS. But we will he better in ways you aren't seeing.

[ProSense]

48. "and I'm assuming it works out like this" Nope,

more evidence that this is a fishing expedition by the right, an attempt to elicit exactly the kind of response you're offering.

That change would save about $225 billion over the next decade, about two-thirds of it through smaller cost-of-living increases for Social Security beneficiaries. Obama tentatively embraced the change in budget negotiations with Boehner in the summer of 2011. Since then, Senate Majority Leader Harry M. Reid (D-Nev.) and many other Democrats have rejected the proposal, insisting that the solvency of Social Security be addressed separately from the year-end negotiations.
http://www.washingtonpost.com/politics/obama-boehner-meet-as-debt-talks-intensify/2012/12/17/6b43c24a-4868-11e2-b6f0-e851e741d196_story.html

That is absolute bullshit. Social Security was never on the table. The rumor was that Medicare age increase was floated, but now WaPo is attempting a new evolution of that rumor.

Still, senior Democratic aides said they could probably muster the votes for the change if it was not applied to disability payments, known as SSI, and if very old seniors were protected through a bump-up in benefits at age 85.

WTF? When did this become the Social Security negotiations?

[Hoyt]

58. Sorry, I think you are wrong. If that's the deal, I'd take it and move on.

Lots of important things to do that will improve life for everyone. Heck, use that stimulus to build better mass transportation, and I'll use it to switch from owning a car to save toward the minor reduction in cost-of-living adjustment under chained CPI and be happy folks more screwed than me get a little extra.

I think Obama has done exactly what we reelected him to do. Again assuming it works out like those.

I think Krugman is right on.

[ProSense]

66. No, you're

"Sorry, I think you are wrong. If that's the deal, I'd take it and move on."

...wishing. I mean, "if"?

The media reports are all one-sided. First Politico reported the offer as a "major concession." (http://www.democraticunderground.com/1014338270#post4)

Then reports indicated that the President rejected that offer. Now it's being pushed as the President's offer. What have Republicans given up?

In his latest proposal, Boehner offered a one-year debt-limit increase. And Republicans have opposed more infrastructure spending and additional unemployment benefits.

Answer: Not a damn thing.

If this rumor is true, Democrats are back to negotiating with themselves. This is absurd.

Up until a few days ago, everyone projected that Obama would gain leverage after going over the cliff. Now people are groveling at reports pushing the GOP proposal as the best offer.

I mean, WTF?

[Hoyt]

71. So Krugman is a liar and tool of the right on this.

Obama did gain leverage.

I've got things to do. I'll try to check back tomorrow to see where Krugman is wrong too.

[ProSense]

72. Krugman:

But is this rumored deal better than no deal? I’m on the edge. It’s not clear that going over the cliff would yield something better; on the other hand, those benefit cuts are really bad, and you hate to see a Democratic president lending his name to something like that. There is a case for refusing to make this deal, and hoping for a popular backlash against the GOP that transforms the whole debate; but there’s also an argument that this might not work.

I want to see more — and also want to see whether the Republican crazies scuttle the whole thing before it even gets off the ground. If they don’t, there will be some serious agonizing for progressives, yours truly included.

[Hoyt]

74. And he also said chained CPI is a small price to pay for rest of deal, like no Medicare age increase

Gotta go.

[TheKentuckian]

82. What stimulus money do you even begin to think a new mass transit system there is?

You are off deep into magical thinking.

We need upward of five trillion dollars to just get our current mess up to code. Obama is begging for scraps to plug the worst holes in high use and probably some dicey "public-private" partnership schemes, a few tens of billions of dollars.

You are not even wildly approximating plugging in numbers to costs and politics isn't religion, sports, friends, or family. Faith is for the irresponsibly foolhardy in this arena, especially when it is right before your eyes.

[spanone]

47. R U M O R S.....we'll see

if social security loses a penny over any deal it's a crime.

[loyalkydem]

49. In the end it's up to us to put pressure on congress to say no if this is true.

[Uncle Joe]

54. Kicked and recommended.

Thanks for the thread, ProSense.

[humbled_opinion]

63. KILL TWO BIRDS WITH ONE STONE

Propose a 10K tax on the purchase of any firearm.

[Hoyt]

83. I'm darn sure for that.

[Rosa Luxemburg]

67. We need to cut at the top

why is it that if there are cuts to be it is always benefits?

[HiPointDem]

78. I think we should cut Congress. That would be a HUGE savings, in graft alone.

[cheapdate]

68. Go ahead and burn me at the stake

but I do not want to experience another recession -- no way, no how, not now. I'm trying to get a kid through college and I CANNOT be out of work again. If a deal with the house Republicans is the price, then so be it. I'll hope for the best deal possible. The house Republicans WILL OWN the cuts, I think Obama has made sure of that.

[Hoyt]

87. I agree, but only as long as lower income/wealth people aren't hurt.

Also assuming there is reality to protecting folks on low end, and some real stimulus, extention of unemployment.

But we'll all he much better off if economy improves, we can pull off health care, and some other things. When things actually get better, Congress can bump SS or at least something else that benefits seniors.

We can solve so many problems if we get out of current situation.

[TheKentuckian]

88. How do they own the cuts? They can't pass them.

No, who owns the cuts are the people at the bottom of the shitpile, eventually most of us that aren't there today and of course the entire economy as you bled out demand based on complete nonsense.

And if you don't think that the TeaPublKlans will be hanging the cuts on Democrats with their money spigot then you must be like a year old and not paying much attention then.
70% or so of the country wants no cuts so you think it is good politics to empower the fuckbags to do what they don't want to supposedly avoid a recession when you know one is coming because nothing has been done to resolve the structural issues that caused the last one, silly buggers are working their asses off to kill as much demand as possible, and all the movement is at the top and the wealth and income gaps grow.



What do you rationally expect to happen? Hell, looking at mainstreet, I'd say things aren't "recovered" (which is a case of amnesia of how fucked up it was for regular folks before the crashout) much anyway.

We are all trying to make it out here, you think most of us can absorb some more blows?

[adirondacker]

69. Much like the deficit reduction act of 2005...the poor and middle class will have less

to live out their lives with. Ludicrous!

At least we only had the republicans to blame for that one.

[HiPointDem]

77. seems like we're doing a hell of a lot of sacrificing while the bankster class's profits just keep

on growing.

[adirondacker]

95. I was hopeful that the Dems would repeal the act once in power....

Guess not.

[BrentWil]

81. Sounds like a decent deal that will prevent a recession

Not a bad job by the President. Especially if the debt ceiling is removed as a threat.

[ProSense]

89. I hope it's

"Not a bad job by the President."

...rumor. It's a horrible proposal, especially after the President and Democrats have stated unequivocally that Social Security has nothing to do with the deficit: http://www.democraticunderground.com/10022016846

[BrentWil]

91. Yes but changing the index does save money and isn't reasonable

It also sounds like it is means tested or some mechanism is in place to protect certain populations. This is better then going off the cliff into another recession.

[liberal N proud]

97. Good deal if you are never going to need Social Security or Medicare

Other than that, it is a very good deal.

As for those of us who will not win the lottery before we retire:

[Tierra_y_Libertad]

90. No problem. Obama will veto any bill that cuts SS, Medicare, or other social programs.

As a radical centrist he just has to.....doesn't he?

[BrentWil]

92. Dream on

Is thus is stopped it will because of the crazies on the right.

[Babel_17]

93. Hear, hear

More terrible negotiation? I thought we'd learned our lesson.

Force the republicans to get out there and advocate their case.

We'll win.

[Babel_17]

94. "Thank you for contacting the White House."

http://www.whitehouse.gov/contact/old

I read Paul Krugman's comments about the most recent, supposed, accommodation with the republicans regarding "the fiscal cliff".

I'm appalled that the administration would cave in so badly.

The people sent a message in re-electing the President and it wasn't this craven proposal.

For shame.

[datasuspect]

98. st. reagan smiles in hell

if this is true