Obama's Unwise, Unnecessary Concessions

AP Photo/ Evan Vucci

President Barack Obama talks about the fiscal-cliff negotiations during a news conference yesterday.

Why is the president back to making premature and unnecessary concessions to Republicans?

Two central issues in the 2012 presidential election were whether the Bush tax cuts should be ended for people earning over $250,000, and whether Social Security and Medicare should be protected from future budget cuts.

The president said yes to both. Republicans said no. Obama won.

But apparently Obama is now offering to continue to Bush tax cuts for people earning between $250,000 and $400,000, and to cut Social Security by reducing annual cost-of-living adjustments.

These concessions aren’t necessary. If the nation goes over the so-called “fiscal cliff” and tax rates return to what they were under Bill Clinton, Democrats can then introduce a tax cut for everyone earning under $250,000 and make it retroactive to the start of the year.

They can combine it with a spending bill that makes up for most of the cuts scheduled to go into effect in January. Republicans would be hard-pressed not to sign on.

Social Security should not be part of any such deal anyway. By law, it can’t contribute to the budget deficit. It’s only permitted to spend money from the Social Security trust fund.

Besides, the president’s proposed reduction in annual Social Security cost-of-living adjustments would save only $122 billion over ten years. Yet it would significantly harm the elderly.

It defies logic and fairness to give more tax cuts to the wealthy while cutting benefits for the near-poor.

The median income of Americans over 65 is less than $20,000 a year. Nearly 70 percent of them depend on Social Security for more than half of this. The average Social Security benefit is less than $15,000 a year.

Even Social Security’s current cost-of-living adjustment understates the true impact of inflation on elderly recipients, who spend far more on health care than anyone else – including annual increases in Medicare premiums.

Hands off Social Security. If the Republicans are willing to raise tax rates on high earners but demand more spending cuts in return, the president should offer larger cuts in defense spending and corporate welfare.

Comments

surely some will tell Obama how simple his choice has become. let's call the GOP bluff and "go over the fiscal 'cliff'" knowing that the crisis is a confabulation and that what the GOP still wants is unreasonable.

While I appreciate Bob's solicitude for low income elderly, the chained CPI, if applied to the 2013 benefit increase would be 1.5% rather than 1.7% Using Bob's average of $15,000 in benefits, this is a difference of $30 per year or $2.50 per month. This seems like a pretty trivial benefit cut especially compared with other things on the table like further raising the retirement age. The idea that there is a political possibility for fully funding Social Security only with more payroll tax increases is surely folly. If we get away with doing only this, it will be an incredible victory.

The Social Security trust fund, together with payroll taxes, is sufficient to cover program benefits for more than the next 20 years. Moreover, assuming no additional funding, currently scheduled payroll taxes can provide benefits equal to those now provided, even adjusted for inflation, for the indefinite future. Given all the real economic problems we truly must address now, there is no legitimate argument for even considering Social Security modifications until the economy is fully back on its feet and long-term costs and revenues can be more accurately projected.

let everybody pay at the same rate. across the board. SS in the black for another century. there is no problem with SS. and veterans served their country and cutting their benefits is cruel. worse than cruel.

I think you err by assuming that Obama, like you and your readers, truly believes that cutting benefits for 85-year-old widows who depend on Social Security for the bulk of their retirement income is both cruel and unnecessary. He is a right wing Democrat whose ability to stand up for progressive policies has been shown to be weak. The Republicans know this and take full advantage. Obama gets rescued repeatedly by the ideological crazies in the Republican Congressional delegation who simply refuse any compromise whatever. It's a sad day that we have to depend on a weak reed like Obama to preserve social justice in this country.

obama has basically the same feelings towards the poor and powerless and persecuted that the GOP does. he admires Ronald Reagan as a better president than Roosevelt. believes in his soul that the poor are lazy. Romney light.

Annual income of $15,000 may be close to the average, but here are many women who are living on a few hundred dollars a month because they earned less during their working lives due to discrimination in the workplace, or, if they worked in the home raising their children, they only get a widows pension which is also very small. For these women, who are barely getting by now, even $2.50 a month is a hardship. It is outrageous to financially squeeze these women even more.

he has proven again and again that he gets his biggest jollies from betraying his friends and getting stiffed by his enemies. he loves seeing his friends stiffed more than anything else. he lusts at seeing us getting stiffed without KY. he adores his powerful wall street friends and salivates at what they do to the poor powerless and persecuted. like his attitude towards CIA torture, drones killing children, IDF starving gaza children to death, watching working families thrown out of their homes by white men living in mansions with multiple vacation homes. the most anti-worker president since coolidge.

Not exactly, isafakir. Obama is very good to his real friends. It's those he ingenuously appeals to as "his friends" and who give votes instead of lobbying gratuities whom he is stiffing. Obama's real friends (as you note) are the banks, Wall Street, and the pharmaceutical industry that loves Obamacare -- new customers for drug companies overpriced and often useless or counterproductive products, at the public expense! -- and loathes marijuana legalization. Also, apparently, the defense industry, since no real cuts have been been proposed that even approach those that Obama would levy on the retired and disabled. I never got my ballot, being out of the country at the time, and couldn't vote. No loss, there were no real choices between center-right and far-right. There never will be again pending common Americans getting their dander up. But we are a crushed people.

PS Don't forget: He's a Harvard Man. Acquired elitism.

Obama continues to play (or be) Weak President. I'm not hearing from a spine - stiffening Congressional Progressive Caucus telling Obama it will not vote to approve any cuts to Social Security, Medicare, etc.

I fear this "cliff" will turn into Jobs Hostage crisis. They go over the "cliff," nearly a million people start losing unemployment comp., then government contractors start laying off hundreds of thousands of workers. And then the Democrats, claiming they are forced to, agree to make significant cuts to Soc. Sec., Medicare, etc.

Possible, but not a given. "Over the cliff" means savings in spending that can be redirected elsewhere. It's just a matter of how you see it, what your priorities are.

Better to ride out the "cliff" and have the money in hand, then decide how to spend it, than to hand it over a priori to the plutocrats and their minions in hastily concocted tax and public-service reduction plans.

I am exhausted from wonder why Robert Reich is not at the right hand of the President giving him the sound and accurate advice that Robert Reich so clearly gives in his site and articles. I am left to only hope and prayer that the President is reading his articles.
Yes, since "discovering" Robert Reich's website, articles, and books over 9 months ago, he continues to be a clear beacon of light in this madness. Would the world please listen to him! As an active progressive 60 yr old gay Dem in Sonoma, the 2nd bluest county in CA, I continually evoke his name and thoughts to everyone. Thank God, that Robert Reich is here now at this most critical time in American events. Please Mr. President start actively using his thoughts and advice.

Look, guys,
Everybody is going to have to pay more. The only real question is, can Obama and Congress cut/generate $400 billion every year for the next ten years? To do that, every body's tax cuts are going to expire, including the 2% .

ex animo
davidfarrar

Jane Hamsher makes a good point at http://fdlaction.firedoglake.com/2012/12/19/can-we-please-stop-pretending-obama-is-capitulating-on-social-security/. This is something Obama has wanted to do and has been open about since before his inauguration. We still don't know why he believes this is something he must do. Why does Pete Peterson believe Social Security must be destroyed? Has anyone ever straight out asked them?eiful

White House petition to end corporate welfare here: http://wh.gov/Qa6f

Corruption translates into human suffering, with poor families being extorted for bribes to see doctors or to get access to clean drinking water. It leads to failure in the delivery of basic services like education or healthcare. It derails the building of essential infrastructure, as corrupt leaders skim funds. Corruption amounts to a dirty tax, and the poor and most vulnerable are its primary victims.
buying instagram followers | followers instagram

Social Security benefits used to actually make the program a good investment, in terms of the return on investment, as most people would get more than they paid in. However, that isn't always true anymore. Big problem with Social Security today is the money that Congress borrowed and never paid back. Those were good faith money paid by workers and their employers to be paid to workers at their retirement. This way workers had a retirement to carry them through the golden years without having to depend on their children to provide for them.
More here, http://personalmoneynetwork.com

You need to be logged in to comment.
(If there's one thing we know about comment trolls, it's that they're lazy)

Connect
, after login or registration your account will be connected.
Advertisement