Both the Washington Post and the Wall Street Journal report that President Obama’s proposal for deficit reduction, due out Monday, will not include any changes to Social Security. The reports are less certain about increasing the Medicare eligibility age, giving a definite “maybe” about that measure.
Here’s a sample of the WaPo report:
People close to the White House say Obama’s advisers have been debating whether the plan should include the changes to the Medicare eligibility age or a reduction in Social Security benefits.
Obama is unlikely to include the Social Security proposal, the sources say, and an administration official noted that Social Security is not contributing to the nation’s immediate deficit problem. The sources were less clear about whether Obama would recommend the change in the Medicare eligibility age.
The White House plan is likely to call for at least $340 billion in savings from Medicare and Medicaid, the low-income health insurance program, as part of a detailed proposal to overhaul entitlements.
The plan is also likely to call for at least $800 billion in tax increases and, according to a person familiar with the matter, include principles for redrawing the personal and corporate tax codes. Obama may also call for scaling back farm subsidies and requiring bigger contributions to civil pensions by federal employees.
A White House official said Wednesday that the plan is still being finalized. Aides say the president’s plan will be modeled after a series of proposals he made in April amid pressure from Republicans to show he was serious about curbing the growth of the nation’s debt.
You could get $800 billion in tax increases, depending on the baseline you use, simply by letting the Bush tax cuts over $250,000 expire. So that accounts for the whole tax piece. Of course, the American Jobs Act has a series of “pay-fors” on the tax side that add up to $467 billion. Those become a “tax trigger” for the Super Committee, under the legislation.
As for the April proposal, that didn’t include Social Security either, nor did it have any increases in the eligibility age for Medicare (all of the items were on the provider side, such as allowing Medicare to bargain for prescription drugs). That April proposal did include a “blended rate” for Medicaid and SCHIP, which would lower federal participation in the program and cost-shift to states. It could be that the President wants to create a sense of relief on some of the bigger safety-net programs while still pushing a plan of medium-term austerity and perhaps sneaking in something like the blended rate. For example, there’s talk of using chained CPI but excluding it for Social Security. That would hit things like food stamps and veteran’s benefits, and raise taxes regressively. But nothing has been finalized.
The WSJ says means testing for Medicare might be on the menu. Medicare ALREADY means-tests, in the sense that wealthier recipients pay higher premiums. Apparently the plan may goose that.
This paragraph kind of encapsulates the whole problem:
The decision to exclude Social Security, and discussions inside the White House about what to propose on Medicare, come as Mr. Obama and his top aides are trying to keep attention on his plan to create jobs, the top concern in voter surveys.
But next week, Mr. Obama will insert himself into the debate over long-term deficit reduction, a battle between the parties that damaged his standing this summer and is beginning anew. A new congressional supercommittee is looking for ways to cut deficits by at least $1.2 trillion over 10 years.
If the attempt here is to be the most reasonable guy in the room, all that did in July is crash the President’s approval ratings. All this does is drag us back to a deficit discussion, when the public has a clear preference for jobs, even after years of deficit fearmongering.
If we’re in a world where the only plan put forward by Democrats on Social Security is to raise the payroll tax cap (they’re using the “donut hole” formula where the cap is lifted only for those making over $250,000, meaning that income from $106,000 to $250,000 would still be untaxed), then that’s a good thing. But there has been serious damage from this debate, as Dave Weigel explains. An advantage has turned into a liability, at least in NY-09.
The party tried, and failed, to wound (Congressman-elect Bob) Turner by telling voters he’d provide one more Republican vote to weaken entitlements. That worked in New York’s 26th district, where Democrat Kathy Hochul tore pages out of the Ryan plan and made her Republican opponent eat them. In the 9th, Turner and his surrogates tried to neutralize the entitlement issue by promising not to cut entitlements. In two robocalls, Koch promised voters that Turner wouldn’t cut Medicare or Social Security. The weekend before the election, Hikind said the same thing, and bolstered his case by saying Democrats were risking the programs.
“The president of the United States is now a member of the Tea Party!” said Hikind. “He said, in his own words, that there won’t be Medicare and Social Security for my children and your children and my grandchildren unless we address Medicare!”
That’s not really a wedge issue – it’s the slow death of a wedge issue. It’s the start of a problem for Democrats, who have gone from attacking the Ryan plans for entitlement reform to vouching support for some undefined “everything on the table” entitlement reform. There might not be any way for Democrats to dodge this, and there’s no sign that they want to. And that leaves all of them in the position of Democrats in New York’s 9th. Their traditional base, weary of the recession, not sure what Democrats have to offer any more, are ready to be wedged.
A case in point: 30 Democratic and Republican Senators have a press conference today calling on the Super Committee to “go big” on deficit reduction. This Gang of 30 could come up with their own plan. If it includes cuts to the safety net, I’m sure you’ll hear the refrain “even President Obama believes…” The difference between the parties on this is gone in the minds of the public.




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It’s been clear for a while that Obama had no interest in helping Democrats who wanted to run using Kathy Hochul’s model because he’s pursuing his dream of “getting something big done.” He did it with his crappy health insurance bill in 2010 and he’ll send everyone to the slaughter in 2012. If the GOP takes the Senate in 2012, I hope they impeach him.
Kabuki. The real proposals will be discussed behind closed doors, transmitted to the GOPers on the Catfood Committee along with any Dems who have agreed in advance to fold. The proposals will NOT be atttributed to OBamaLLP, enabling them to keep their hands clean.
Boxturtle (Prove me wrong, Barry!)
Oh, changes will happen. They sent him to Washington for this job. Mr Change and Hope is The Hatchet Man.
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/15/AR2009011504114.html
Obama Pledges Reform of Social Security, Medicare Programs
By Michael D. Shear
Washington Post Staff Writer
Friday, January 16, 2009
President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare “bargain” with the American people, saying that the nation’s long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.
My hope is that after the internal polling comes back they’ll realize how insane they are for touching the third rail and back off.
Until the WH begins a serious discussion of a tobin tax, its interest in destroying the middle and working classes will continue unabated. Obama would rather harm seniors than Wall Street and that says it all.
Besides, by the end of this whole charade he and his crony Democrats will find a way to cut “entitlements” anyway.
Obama is a liar and a fraud.
Except, now, because of the Obama payroll tax holiday, it is.
And, of course, by cutting the payroll tax, the monsters ARE cutting Social Security funding. Soon you will here how Social Security is going to run out of money tomorrow or next week or next month and the fact that they cut funding to make it so will only be heard here. Kabuki again or still!
Not until people get in the streets with non violent protests.
Amazing how they change the narrative. Most people don’t even know they are getting duped. He who controls the narrative wins the war.
It will be too late IMO. Obama has already revealed too much of his aims for the safety net and its in print and soundbites “The GOP made me do it” just won’t fly.
Technically, they’re not cutting SS funding. They’re funding it from the General Funding instead of the 2% payroll taxes. So “on the books” SS is still fully being funded.
Ultimately the only thing tax cuts for working people accomplish is it permits the Corporates to continue to keep wages low. Not collecting the insurance premiums (SS/Medicare taxes) I agree is really just a back door way to end the programs..
You think?
But it is now part of General Revenue and it becomes part of the deficit.
David, David…I clicked onto your post full of hope in that “won’t include” bit – a nice firm locked box statement there was what I expected, but here’s what I got:
“Obama is UNLIKELY to include the Social Security proposal, the sources say, and an administration official noted that Social Security is not contributing to the nation’s IMMEDIATE deficit problem. “(My caps.)
Now, given this is the Washington Post telling of it, but nothing else in your piece gives me any more a secure feeling about what we are fundamentally entitled to feel secure about – Social Security.
More and more, I’m getting the impression that what Obama says no longer means anything to anybody. With the possible exception of the secret service and his immediate family.
“I’m the president, my words mean something” – B. Obama
“I’m the decider” – G.W. Bush
Boxturtle (“You’re both full of crap” – Boxturtle)
There are too many items missing in this discussion they are having in DC about SS/Medicare and Medicaid.
I still say that the citizens need a full investigation with accounting of the programs. I want to know how much money has been removed to use as operating for the government and how much has been returned. I want to see the real numbers and not a bunch of toad heads marching across the tv screen telling scare stories!
How can we the people get an outside/non-partisian investigation started?
Can we draft Dean Baker to do it for us?
LOL. Now I have it! The fact that Obama has said and put in print his intent is to re do the safety net won’t affect the vote — because everybody knows he never means what he says…. clever chess move :-)
Thanks for setting me straight Box Turtle.
Box Turtle,
Exactly right. Everything happens behind closed doors at the corporate wall street white house.
You’ve identified exactly why they’re getting Obama to do the dirty work to make it possible to touch this third rail, i.e. on opening the door to dismantling Social Security.
And this is what makes someone like Obama worse than Bush and so very dangerous.
Only Obama could do so much to the detriment of so many Americans.
retire BHO to the SPUD farm
The only redrawing of the coroprate tax code that we should accept is the elimination of the corporate tax code. Since corps are people, they should be made to use the same tax code as people. They should pay taxes on all of their income(gross sales). All business “expense” deductions should be eliminated accept for interest on real estate, and contributions to employee pensions and health care.
No more payroll expense. If I hire a kid to cut my grass I don’t get to deduct it.
No more deductions for capital expenditures. If I put a new bathroom in my house, I don’t get a deduction for that.
No more depreciation. I had to buy a new water heater, and furnace in the last three years. I don’t get to depreciate them.
Etc…
Have any democrats considered repealing the HC law? It would be interesting to see if the pukes would go along considering it would hurt big pharma’s profits.
Reducing Medicare would swamp the emergency rooms. Do they really want that?
First they came for the universities (think tanks);
Then they came for the media (Cronkite);
And lastly they came for the politicians (Reagan).
Our democracy has been stolen by the oligarchs. We want it back. A reckoning is coming.
I am mostly in agreement. Every ONE and every corporation should pay their fair share under the same rules.
I’m watching the republican candidates dog and pony show ( well not really WATCHING as that would give me diarrhea) but hearing what they’re saying so I can get good prediction of where Obama will be going after he wins in ’12.
Amazing to watch him implement EVERYTHING the Repubs were running on in ’08 like “Drill, baby, drill” um hmmm…and spill, baby spill.
So as Perry/Bachmann and their inhuman audiences opine, so will go Obama, you can count on GOD to be much more present in his second term.
If I could turn back eh hands of time, I would have WHIPPED for McCain/Palin in ’08, then at least the Democrats, who have to follow their leader wouldn’t be going off the cliff as he pipes them along.
Sinclair Lewis was right about everything, but my favorite is “When fascism comes to America, it will be wrapped in the flag and carrying a cross”
I am assuming the cross will be for burning heretics and even worse, non-submissive women.
Note Lewis DIDN’T say “IF” he said “When”
…….
They have plans for that…just close down the emergency rooms. Many hospitals are already demanding payment up front for their “services”
No more free ride for YOU you lazy poor people!
Or as the apes ( no offense, simians!) in the Republican audiences shout: “Let ‘em DIE!”
Nice country we have here.
The propaganda is finally sinking in to the bone after 20 years of Limbaugh and his ilk
I have a different approach. Eliminate the corporate tax and go like gangbusters for the people who profit from them. It should eliminate some, a lot?, of the corruption of corporate PACs and lobbyists or at least the being able to hide behind a corporation label. .
I have been laughing at all the outrage at calling SS a Ponzi scheme. Limbaugh has been calling it that for at least 20 years, along with all the other garbage that animates the “principled” right.
Feminazi springs to mind
It should be abundantly clear by now that a high priority for Obama & Co. all along has been to erode the social benefits programs (“entitlements”) – SS and Medicare in particular.
One would be quite stupid and/or naive to heave a sigh of relief here, that Obama is “only” targeting Medicare eligibility. Camel’s nose syndrome…
Obama is basically what used to be called a moderate-right Repug. The “progressive” left’s strategy of “lesser-evilism” (yuk) has finally led to this: Working people and the left have NO party that represents them.
bingo!
Yep another “good one.”
Perhaps we can renew the old slogan, “No taxation without representation.”
Worked last time.
That’s not a bad idea.
Thanks. The more I think on it, the more I like it too. So much of the corruption comes from those who work for corps manipulating for tax breaks. No tax. No breaks. Seems to me the “principled” free marketers should love it also.
Knox, I totally agree that preznit now is worse than Shrub was. But I don’t think “they’re getting Obama to do the dirty work,” any more than I think “they” put preznit into the job to carry out their nefarious plot. Preznit is the only one to blame for the filthy, cruel shit he is dumping on the middle class and the poor & aged. We are to blame for putting him into office.
We can’t pass the buck. It’s our fault preznit is in there now. But he did lie his ass off during the campaign, and only told the truth about his intent to gut Social Security, Medicare & Medicaid the minute he was sworn in.
Which is why I love the Dave Weigel excerpt so much, especially this:
I think we can tear pages out of preznit’s plans to gut these vital safety nets and jam them down his throat in November 2012. The momentary variations in the latest plans make no difference. The die is cast. Preznit will choke on this shit. No more years for preznit.
and that’s not a bad idea
Based on what I am reading here and elsewhere, the person you want to have as a president nowadays is the one who will do least damage. And that only person seems Ron Paul. I hate to use the words 3rd party, but he seems to have the most chance of being elected from outside of the 2 main parties. And he seems the most sane. It may not be the most savory option, but it might be all we have. And one thing you have to admit about the guy, at least he has been consistent through the years. You know where he stands. Otherwise, look at the material you have to work with. It is time for really earnest prayer for those that have believe in God, and I am not quite sure what to advise the atheists. It does not look good.
I’ll call “FastSigns” and get a bid.
Anybody who has been paying attention the past 3 years should be aware of the old saying, “There are no atheists in foxholes.” Lucky we have a song, “God Bless America” ‘cuz we need it right now.
These are some big numbers we need to be ready to explain. First, yesterday’s NYT (webdated 9/14), reported these numbers:
So, five percent (5%) of federal spending. That’s the top-line number for the health insurance safety nets’ share of the federal budget.
Then, there’s this big number from the same day’s NYT:
When you add the increase in Social Security over ten years to the increase in Medicare & Medicaid over ten years, you add the Social Security increase to 5% of the federal budget. Which gives you 5% of the whole economy (GDP). Five percent of GDP is, of course, much bigger than 5% of the federal budget. They are different, and they are both huge numbers.
Neither Times article reported the total spending in the federal budget or total GDP. The Congressional Budget Office (CBO), where Elmendorf is the boss, talked about GDP growth during the debt-ceiling circus. A little digging over at CBO(dot)Gov, for example here, turned up this nugget:
So, CBO thinks 5% of GDP is $750B, meaning 1% is $150B, meaning total GDP is 100 times that, or $15000B. Fifteen thousand Billion dollars is $15 Trillion dollars.
Now, using $15T as our big number for current GDP, we can translate these percentages from CBO into current dollars [which I added in bracketed italics, like this]:
Assuming NYT was using CBO’s historical data, if total federal spending (excluding interest) has been $2.8 Trillion, then the 23% of that going to Medicare & Medicaid would cost $638.2 Billion this year. If Social Security combined with Medicare & Medicaid currently costs $1.5 Trillion, then Social Security spending alone is about $861.8 Billion this year.
Here’s the punch line from the second NYT article:
Translation: if we were generating tax revenues according to our historical averages, we would have $405 billion more of tax revenue this year alone, two-thirds of all spending on Medicare & Medicaid. If Shrub’s tax cuts are finally allowed to expire, revenues will grow to 21% of GDP in ten years. Setting aside the obvious fact that GDP will be much larger in ten years, and just using our current GDP of $15 Trillion, repealing Shrub’s tax cuts would mean that tax revenues would total $3.150 TRILLION (not “extra,” but “total”).
Over Three Trillion in tax revenues, just using this year’s smaller GDP figure. More than twice as much as total spending on all three of Social Security, Medicare & Medicaid combined.
We do not need to cut the safety nets. Not now. Not 25 years from now. QED.
:-)
Great analysis. Thanks for doing the numbers. Our Democratic candidates and the pundits really need to have this kind of info. The GOPers just throw out outrageous numbers and descriptions and we all sit mute.
Even if this was really a true representation. On Medicare (no Medicaid) my medical expenses for insurance and outside coverage medications far exceeds 5% of my income ie “economy” If I were 60 or so on private insurance it would be higher than it is now.
So someone in the WH finally woke up and smelled the tea-party! So much as mention cutting SS and you lose the senior vote. If you’re truly running to get re-elected, why even bring it up? Guess what: the repugs will become the defenders of SS (what a joke, but true). Same thing with Medicare. Present a plan that cuts it, and guess what, the repugs will become the defenders of Medicate (again, a joke but true). Look at the 2010 election, slow pokes! Remember when POTUS proposed cutting the extras from Medicare, the repugs won the senior vote. Screw me once, shame on you; screw me twice, and duh, dunno.
Maybe Barry’s plan was to cut SS and Medicare long time ago. However, Reps refused to cooperate, and so now we are approaching the Pres. elections. He had to pull everything off the table, since all of this is now in front of the voters. But, have no fear, as soon as the elections are over, these will find their way back to the front of the line. “Good” ideas never die, they just get postponed. After all, this has bipartisan support. The timing is just wrong for now. If Obama is re-elected, he can bring it back after the election. If a Rep. president is elected, at least Democrats will try to tell us that they are against the cuts and try to show us the reason for their existence. But in the end they will capitulate, since how else are they going to keep collecting their payoffs.
We know for sure what Perry and Bachman, the maniac slashers, will do to SS. Romney grazes up against sanity, but he was a slasher in MA, so expect the same from him.