Thursday, December 20, 2012

Even Some "Liberal" Journalists Are Losing Their Bearings on Obama's Social Security Sellout

Published on Alternet (

AlterNet [1] / By Laura Gottesdiener [2]

Even Some "Liberal" Journalists Are Losing Their Bearings on Obama's Social Security Sellout

December 19, 2012

Earlier this week, after more than a month of apocalyptic warnings about the impending fiscal cliff, news broke that the White House and the House Speaker John Boehner are incrementally negotiating a deal. How's it looking, you might ask? If you're looking for answers from the perspective of what is best for popular interests, unfortunately a swelling number of "liberal" opinions are losing their bearings on Social Security, buying into a backdoor approach that could take out over $100 billion in payments to the neediest people -- we're talking widowed grandmas over 90 -- out of the system even though it makes no sense from a policy standpoint.

Since it’s easy to get distracted when talking about the fiscal cliff and the deficit, it’s worth saying upfront: Social Security right now has nothing to do with the deficit. The program is already paid for up through at least 2033, and right now boasts a staggering $1.7 trillion surplus.

Okay, that often-obscured reality out of the way, here’s some more background. The White House appears to be willing to accept a deal that will change the way Social Security's inflation rate is calculated -- a complicated way of making massive cuts to the program without saying so. The Washington Post's Ezra Klein wrote [3]last week, "Here is a sentence you won’t hear politicians or policy wonks saying in the next few weeks: 'We should pay Social Security beneficiaries less in the future and push a lot of people into higher tax brackets.' Here is a sentence you almost certainly will hear: “Let’s adopt chained CPI.” Welcome to the dark art of obscurantist deficit reduction."

This "dark art" works by switching the inflation adjustment calculation from one that increases the benefit payments to keep up with the increasing costs of basic necessities such as food (this one is called Consumer Price Index-Urban, or CPI-U) to another calculation, one that assumes that if prices skyrocket people will make substitution in their spending (called Chained CPI). Switching to the chained CPI calculation would dramatically decrease the Social Security benefits as seniors age; as one study shows, it will cut the benefits of a 95-year-old by 9.2 percent,decreasing their annual benefit by $1,611. [4]

The problem with this decrease -- and with calculating Social security using chained CPI in general -- is that seniors often can't and don't make spending substitutes. Moreover, these cuts get worse as people age, so changing to Chained CPI is essentially taking money away from the oldest women in country -- and it will affect not only future Social security recipients, but those currently using its benefits. The public overwhelming opposes changing the inflation calculation; according to one poll, 60 percent of Americans think the switch is "unacceptable."

But a good number of liberal opinion writers are accepting the concession anyway, following Paul Krugman's lead and using squeamish and defeatist language --classic Krugman [5]: "as of last night I was marginally positive, right now marginally negative" -- that tacitly lends their approval to this plan (it wouldn't if the vociferously opposed it and called it a sellout). Here are five prominent writers who have lost their moral bearings on this issue:

1. The Washington Post's Greg Sargent

The Washington Post's Greg Sargent -- whose blog's tag line itself is "Greg Sargent's take from a liberal perspective -- is surprisingly optimistic about the contours of this deal. On Tuesday,he wrote: [6]

"The big picture: With this deal Obama will have broken the GOP’s fundamentalist opposition to raising tax rates on the rich (albeit only on income over $400,000) something that would have been deemed very unlikely a year ago. He will have held the line against the GOP demand for two years of Medicare — a victory. Debt ceiling hostage taking will have been deferred for two years, meaning it won’t get tied up in the next elections. He will have obtained stimulus spending — on infrastructure, and in the form of an extension of unemployment benefits — and as Paul Krugman notes, that wouldn’t happen if we go over the cliff. (I’m told the talks have not focused on the exact sum of stimulus spending the White House wants.) The price: The expiration of the payroll tax cut and the cut in Social Security benefits. That’s bad, but the damage could be limited, if the White House insists on it."

The White House could limit the damage, as Sargent explains, by increasing Social Security benefits for the oldest Americans in order to offset the benefit reduction caused by switching to the chained calculation. Okay, but there's no indication that the White House will win any type of Social Security benefit increase--especially when it's already accepting a vast cut. Sargent probably knows that, but he's saying otherwise.

2. Talking Point Memo's Brian Beutler

Brian Beutler doesn't like the idea of slashing Social Security benefits by changing the inflation calculation. But, in his mind, it's the "least-bad entitlement benefit cut." [7]Translation: It's awful, but Beutler is going to use the double-negative to try to give it a positive spin.

He continues: "Progressive activists and members of Congress have taken a hard line against cutting Social Security benefits (or any major social insurance program benefits) in fiscal cliff negotiations. But as Obama and Boehner zeroed in on a deal, some are asking whether it would be an acceptable concession if Obama walks away with higher taxes on the wealthy and some new stimulus next year." Again, a translation: Beutler is asking whether it would be an acceptable concession--and his conclusion is, essentially, yes, it is acceptable. After all, it's the "least-bad" one out there.

3. Mother Jones' Kevin Drum

Similar to Beutler, Kevin Drum also doesn't like the Social Security cuts.As he accurately writes [8], "Social Security is a separate program, and if a deal is going to be made, compromises should be made within the program. It's one thing to hammer out an agreement to raise revenues and cut benefits that affect only Social Security, but it's quite another to cut Social Security benefits in return for general fund tax increases. I don't like that, and I don't like the idea that Obama is setting a precedent to do that kind of thing again in the future."

But, despite the fact that Drum is "not excited" about the proposed plan, he's not all that unhappy with it either. "Overall, this doesn't sound like it's the worst deal in the world," he writes. "So far, though, I'm with Krugman: it doesn't sound all that great either, and it's not clear if it's better than what Obama could get if he simply waited a bit and went over the cliff."

The level of Drum's resignation is surprising. Essentially he's saying: Yes, it's bad. Yes, it sets a bad precedent. Yes, the President could probably get a better deal by continuing to fight. But, no, "it's not theworst deal in the world." Well, of course, it's not the worst deal in the world, but has that become the Left's new benchmark now that Obama has been re-elected?

4. The New Republic's Jonathan Cohn

Jonathan Cohn essentially thinks that Democrats have these negotiations in the bag.As he writes, [9] "I've assumed (and written) that the Democrats have enormous leverage—that they can basically get their way on taxes, the automatic spending cuts, and maybe even the debt ceiling—no matter what House Republicans want."

But, despite believing that President Obama has extraordinary leverage, he appears fairly comfortable with the cuts to Social Security. As he writes, "Changing the formula for Social Security cost-of-living adjustments will reduce benefits, as my colleague Timothy Noah has noted. It makes a lot more sense in the context of a broader Social Security reform package, one that includes new revenue dedicated to the Trust Fund. But if it’s a choice between that change and raising the Medicare age, or further slashing discretionary spending, the Social Security benefits alteration is probably preferable—particularly if the deal includes modifications, outlined by the Center on Budget and Policy Priorities, that would protect the poor and older retirees."

Given that he thinks the White House can "basically get their way" in this negotiation, it's unclear why there's a choice between cutting Social Security in making other safety net cuts at all. Yet, rather than argue against making this choice, he's with Drum: slashing Social Security is the "least-bad" option out there.

5. Salon’s Alex Seitz-Wald

Seitz-Wald has gone one step further than the rest, not just implicitly saying that the CPI switch isn’t a deal-breaker, but actually spending time laying out a positive argument for it.As he writes: [10]

"The case against moving to the chained CPI is easy to make: It represents a real cut to seniors’ Social Security benefits, which has so far been a non-starter. Even advocates of the switch acknowledge this. But since we may have to swallow it, it’s worth laying out the best progressive argument possible in favor of the chained CPI. We’re not saying it’s right, but it’s a case that should be made."

He comes to the same conclusions that everyone else does, which is that the “only acceptable way to shift to the chained CPI is to include exemptions for some of the most vulnerable groups.” President Obama has indicated that he’ll fight for these exceptions, but there’s no saying whether or not he’ll win them.

Seitz-Wald concludes, “Since the chained CPI may become a reality, liberals should at least begin thinking critically about it, even if just to decide once again that it is unacceptable.”

But not all progressive economics writers have thrown in the towel just yet. Read RJ Eskow's "8 Tips on How We Could Cut the Deficit, Since Slashing Social Security Benefits Won't Help [11]"

See more stories tagged with:

fiscal cliff [12],

social security [13],

inflation [14],

liberal writers [15]


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