Jon Walker already mentioned this push by President Obama for changes to Medicare and Social Security in his town hall meetings in rural areas this week. It’s actually worse than that. Walker highlighted comments from the stump speech. Look closer at the question and answer session.
Twice this week, the President was asked specifically about Social Security, in particular the COLA adjustment. The last two years, recipients were denied a COLA, because it’s based on an inflation index that didn’t show any rise in inflation. The President explained this pretty ably on Wednesday at a town hall in Illinois.
THE PRESIDENT: Well, let me talk to you about Social Security. It is very likely that she will see a COLA, a cost-of-living increase next year, because inflation actually rose this year. The reason that there were a couple of years where she did not get a cost-of-living increase was because even though she probably felt like the cost of food and gas and groceries were going up, the overall inflation index actually did not go up. There was a period there where we actually had what’s called deflation, where the costs were a little bit lower than they had been comparable to the previous year.
So all that is done automatically. It’s not something that I make a decision about each year. And I promise you when folks don’t get their COLA, they all write to me and say, Mr. President, why — you didn’t give us a cost of living, and don’t you care about senior citizens. And I have to write back and explain to them, no, that’s not something I did. These things just happen automatically based on estimates of what inflation is going to be.
Indeed, Social Security recipients are expected to get a 3% increase at the end of the year. And yes, that’s an automatic process.
What the President isn’t telling people is that he offered an alteration to that automatic COLA process, by going to chained CPI, that would result in a slower increase in benefits, and a de facto cut. So at the same time the President is explaining that the COLA is not in his control, he is hiding the fact that he wants to change the metric upon which it is based. In fact, he slipped and actually did mention chained CPI, in a roundabout way, at a second town hall in Alpha, Illinois. The President was asked about the payroll tax cap, and he answered that and went right to this “here’s why grandma didn’t get a COLA” talking point that he was obviously instructed to say, but he slipped and included a telling line:
Well, first—this is a very well-informed young man here. (Laughter.) You’re exactly right that the way the Social Security system works, there’s what’s called—there’s basically a cap on your Social Security, which there isn’t, by the way, on Medicare. But Social Security, it only goes up to the first $107,000; and you’re right, somebody who makes—who has net assets of $250 million and are making maybe $5 million a year just on interest or capital gains or something, just a fraction of it’s going to Social Security. I think there’s a way for us to make adjustments on the Social Security tax that would be fairer than the system that we use right now.
I do think, in terms of how we calculate inflation, that’s important as well. By the way, seniors — a bunch of them were upset over the last couple years because some of — because seniors didn’t get a cost-of-living adjustment. I got a lot of letters — “Mr. President, how come I didn’t get a COLA this year for my Social Security?” And I answered this question at the previous town hall; I figured I’d clear something up now. The way the system works is you automatically get a cost-of-living adjustment based on the inflation rate. The President doesn’t make that decision; it’s based on a formula.
But the President does make decisions on the formula, in consultation with Congress, and he tells you right here, he wants to change the formula for how inflation is calculated. Over time, that would become a net benefit cut of up to $1,000 a year for older Americans. With any luck it won’t go any further. But the President has a clear interest in it.
Let’s pause to acknowledge Rick Perlstein on how Democrats win:
Two years later, Nixon thought he had another one in the bag — the 1970 elections, in which he campaigned tirelessly for Republican candidates, then gave an election-eve TV speech blaming Democrats for the “thugs and hoodlums” in the streets. Only he made a terrible mistake: he sounded just as frantic and ugly as the forces he claimed the GOP would subdue.
In contrast, the Democrats ran a response to Nixon’s hysterical election-eve address from Edmund Muskie, the calm, quiet Senator from Maine, who sat in an armchair and asked Americans to vote against a “politics of fear” that insists “you are encircled by monstrous dangers” and instead choose a “politics of trust.”
You might say Muskie’s was a very Barack Obama sort of speech — but with a difference. It was overwhelmingly partisan. It excoriated Republicans for the way they “cut back on health and education for the many … while expanding subsidies and special favors for the few.” In other words, it was just the kind of speech Obama will not give.
That year, the GOP went bust at the polls. Then, in 1972, the Democrats ran a candidate whose speeches were more frantic than any in history. George McGovern, following a then fashionable theory that the middle class was prosperous enough to take care of itself and that unions were pretty much irrelevant, spoke to working-class concerns less than any Democrat had before. He lost 49 states.
McGovern didn’t give what Lyndon B. Johnson used to call “Democratic” speeches — LBJ’s shorthand for talking about which party gave the people Social Security, Medicare and the Tennessee Valley Authority and which one was willing to toss them over the side. LBJ gave such speeches all the time in 1964 — and he won 60% of the popular vote.
In contrast, you have advice like this from the President’s advisers, which is very practical and reasonable, but first of all irrelevant (Emanuel wants to say that Medicare needs changes to make it more efficient, but so many of them are already part of the Affordable Care Act, so this work is already happening) and second of all terrible, terrible politics. And the President is reflecting that as well.