As far as half-measures go…

this isn’t too, too awful.

All at once, a “fiscal cliff” deal seems to be coming together. Speaker John Boehner’s latest offer doesn’t go quite far enough for the White House to agree, but it goes far enough that many think they can see the agreement taking shape.

Boehner offered to let tax rates rise for income over $1 million. The White House wanted to let tax rates rise for income over $250,000. The compromise will likely be somewhere in between. More revenue will come from limiting deductions, likely using some variant of the White House’s oft-proposed, oft-rejected idea for limiting itemized deductions to 28 percent. The total revenue raised by the two policies will likely be a bit north of $1 trillion. Congress will get instructions to use this new baseline to embark on tax reform next year. Importantly, if tax reform never happens, the revenue will already be locked in.

On the spending side, the Democrats’ headline concession will be accepting chained-CPI, which is to say, accepting a cut to Social Security benefits. Beyond that, the negotiators will agree to targets for spending cuts. Expect the final number here, too, to be in the neighborhood of $1 trillion, but also expect it to lack many specifics. Whether the cuts come from Medicare or Medicaid, whether they include raising the Medicare age, and many of the other contentious issues in the talks will be left up to Congress.

….

On stimulus, unemployment insurance will be extended, as will the refundable tax credits. Some amount of infrastructure spending is likely. Perversely, the payroll tax cut, one of the most stimulative policies in the fiscal cliff, will likely be allowed to lapse, which will deal a big blow to the economy.

I know folks will tell me the chained-CPI adjustment is a deal killer in their minds… but I have to admit, I don’t see the argument. The chained-CPI adjustment says that instead of just looking at a basket of good, you look at possible substitution effects when prices for one item rises. As a practical matter, this is actually how people make buying decisions, so it strikes me that a chained-CPI adjustment is not wildly problematic. Indeed, I’d go so far as to say that while I am not part of the “make grandma eat cat food” crowd, I will note that redistributional politics have tended to benefit the elderly at the expense of working poor for a generation now. So while this change would clearly hurt the elderly somewhat, I am not sure that in the grand scheme of things this is a particularly awful change in itself. And if it helps stave off changes in the Medicare retirement age, it would be a net plus even for the elderly.

The payroll tax issue, I think, is actually a good change. From my perspective the payroll tax holiday is a political liability, since it reduces revenue for Social Security and plays into right-wing fearmongering about Social Security being “insolvent.” (And yes, I know that by law the Social Security trust fund is reimbursed from general revenue.)

Still a couple of issues that worry me. I’m not seeing anything about the Estate Tax. This is a huge issue in terms of concentration of wealth, and hopefully Obama will press hard to ensure both limited exemptions and higher rates on this front.

But what really worries me is this:

The deal will lift the spending sequester, but it will be backed up by, yes, another sequester-like policy. I’m told that the details on this next sequester haven’t been worked out yet, but the governing theory is that it should be more reasonable than the current sequester. That is to say, if the two parties can’t agree on something better, then this should be a policy they’re willing to live with.

….

As for the debt ceiling, that will likely be lifted for a year, at least. In contrast to a week or so ago, when the White House was very intent on finishing the debt ceiling fight now, they’re sounding considerably less committed to securing a long-term increase in these negotiations. The argument winning converts, I’m told, is that since the White House won’t negotiate on the debt ceiling now and won’t negotiate on it later, there’s little reason to make it the sine qua non of a deal.

I am not sure I see the political logic here. Will the president’s hand be stronger in six month? In a year?

I understand why Obama might agree to something like this. He’s, you know, a decent guy, and he doesn’t want to see average Americans hurt as a result of political gridlock. In other words, he’s saying he’s willing to compromise because he’s concerned about the fate of the hostages… but in the long run, doesn’t this just continue to empower the hostage takers?

Maybe generational change will continue to come at a rapid rate, and maybe the GOP will shrink into complete irrelevance quickly enough that buying time makes sense strategically. But I dunno. It strikes me that this process is likely to take longer than we’d like, and that as a result we’re going to need to confront the hostage takers directly at some point rather than just kicking the can. What do you think?

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96 replies
  1. 1
    FoxinSocks says:

    I have to disagree on this. Reading this report left me livid. So livid in fact that I already called my senators to give them a piece of my mind.

    So Obama comprises by only raising tax rates on those making over $1 million? In return, Obama agrees to cut Social Security, further impoverishing thousands of elderly, and letting a very important tax cut for the middle class expire?

    How is this negotiating? It looks like in return for the Republicans giving a little bit of ground, Obama is screwing the middle class and the poor. No, really, what do we get in this deal? Nothing.

    This is what negotiating looks like… For example, in return for only raising tax rates on those making over $1 million, we keep our middle class tax cut, we get unemployment benefits extended, the Republicans raise the debt limit, we get infrastructure spending, AND the Republicans agree not to block Sandy relief. That’s how you do it.

  2. 2
    General Stuck says:

    If there are going to be enough right wing concessions on some kind of grand deal, or beyond just keeping the low income tax cuts, then I would favor means testing high income seniors as being the most progressive ideas floated. I have been against the CPI change for colas, but have read where the details of which are important, and could be made also progressive to those lowest income seniors. I don’t think the retirement age is really on the table, other than talk, and I would support none of this, and neither will Obama, unless we get not only losing the Bush tax cuts for the rich, but also a revamping of the tax codes, so the rich can chip in even more. I don’t think republicans in the House have the votes to pass any kind of affirmative vote for a tax hike. And Boehner would need likely all the dem votes to get anything that does much to SS and med bennies. It all is really a recipe for gridlock and nature having its way from doing nothing. Then pound the nutters next year for some new tax cuts for the middle class. I do suspect to be some give on dems side for at least some of the military sequester, that both sides would want. But that is about all in a lame duck.

    As far as the payroll tax holiday, we still have a sluggish economy, at that tax break for low income folks is highly progressive and likely the fastest stimulus money there is, not to mention helping out working folk right now. And it is but a drop in the bucket for overall solvency of SS. So I would support this a little while longer.

  3. 3
    RobertDSC-iPhone 4 says:

    No deal. Social Security has nothing to do with anything. Keep it out.

    Go over the cliff and take the Rethugs down.

  4. 4
    RobertDSC-iPhone 4 says:

    No deal. Social Security has nothing to do with anything. Keep it out.

    Go over the cliff and take the Rethugs down.

  5. 5
    Hill Dweller says:

    @FoxinSocks: I wouldn’t put the Sandy funding in the deal. Let that be a stand alone issue, giving Republicans lots of press for their insanity.

    Klein was wrong before on the medicare age being raised, and I’m hoping he is wrong on some of these newer details.

  6. 6
    Bernard Finel says:

    @FoxinSocks: Well, but the problem with income inequality really is about folks making more than $1 million a year. And to the extent that we can begin to divide the rich from the super rich in policy distinctions, I think it opens up more and better options in the future.

    Also too, the payroll tax cut has to be temporary. If you make it permanent, you add a credibility to right-wing claims about Social Security insolvency. The reality is Social Security was largely “fixed” in the 1980s. That should be the firebreak, and the payroll tax cut undermines that argument, IMHO.

  7. 7
    General Stuck says:

    I think Ezra is getting ahead of himself on his Fiscal Cliff analysis, probly getting cues from some staffers on the hill, or WH. I don’t think Obama will budge much from the 250 grand cutoff number, and I don’t think Obama or dems in congress will entertain any cuts to entitlement benefits under these conditions. There are so many moving parts to please this side or the other, I don’t think a lame duck deal is possible.

  8. 8
    Fred Fnord says:

    You have got to be fucking kidding me.

    Chained CPI means more seniors in poverty every single year. It means that your purchasing power goes down, the older (and sicker) you get. It means, specifically, that grandma, instead of having to get by on $22,000 a year (as she does when she’s 68), will have to get by on $19,800 (inflation-adjusted, of course) when she’s 88.

    In summary, fuck you. No.

  9. 9
    mainmati says:

    Just as the GOP will totally renege on making any changes in the tax code when it comes to, you know, actually legislatin’ so too the Democrats will (or should) go totally to the mat on the false issue of the debt ceiling blackmail. Because next year the Goopers will be back for yet more cuts to Social Security and all aspects of health care (Medicare, Medicaid, ACA).

    The payroll tax issue goes to the perception of solvency of Social Security. I know it is crazy but that’s the perverted world we live in.

  10. 10
    Baud says:

    Will the president’s hand be stronger in six month? In a year?

    Yes. The economy should be stronger then, and Republicans won’t crash it in an election year.

  11. 11
    Baud says:

    Will the president’s hand be stronger in six month? In a year?

    Yes. The economy should be stronger then, and Republicans won’t crash it in an election year.

  12. 12
    Robin says:

    Bernard, do you read Krugman, or Dean Baker? Perhaps you should read them as both have discussed why what you are suggesting is both unnecessary and terrible policy. And also this, it’s short enough, and concise enough that it ought to show you why linking benefits to Chained CPI is a horrible idea: http://www.washingtonpost.com/.....-one-post/

  13. 13
    MattR says:

    @Fred Fnord:

    It means, specifically, that grandma, instead of having to get by on $22,000 a year (as she does when she’s 68, will have to get by on $19,800 (inflation-adjusted, of course) when she’s 88.

    It also means that the $19,800 (inflation adjusted) that she receives at 88 will buy her the same or equivalent items that she was able to purchase for $22,000 when she was 68. At least that is the theory behind it. If it was able to truly and accurately do that, I would not object to its use. But I have major questions about the actual costs and availability of the substitutions it uses. I also think that we should be using an elderly specific basket of goods, but that will not happen since experiments doing this have found that CPI-W understates the inflation that seniors actually feel (From 1982 to 2009, elderly inflation was 3.2% while CPI-W was 2.9%)

  14. 14
    Davis X. Machina says:

    Unemployment benefits are part of the alleged deal.

    Presently they expire for 2 million people on December 29.

  15. 15
    FoxinSocks says:

    @Bernard Finel

    I have no problem with only raising taxes on those making over $1 million. The problem is, if we compromise, we should be getting something in return, not making further concessions. If this report is true, the Republicans are saying, “OK, we’ll get to keep rates the same for those making under $1 million. In return, you give us even more of what we want!”

    I understand there’s an optics issue with the payroll tax cut, but people need that tax cut to put food on the table and fuel economic growth. If the optics are that worrisome, then don’t call it a payroll tax cut anymore, say the money is coming out of general funds, but middle class tax cuts need to be a part of the final deal.

  16. 16
    Bernard Finel says:

    @Robin: Yes, I read both. And while I agree it is largely unnecessary, it is also quite clearly one of the least bad options on the table. As long as our side is going to make concessions, this is much better than, say, rising retirement age on Medicare.

    Also, we have to recognize that the poverty rate for the elderly has declined dramatically over the past 40 years and is now consistently lower than that of children. This is part of general generational wealth transfer system we have in place.

    In short, if we need to make any concessions, relatively minor ones like chained-CPI are better than most alternatives.

  17. 17
    Patricia Kayden says:

    Sorry Bernard, but sounds as if President Obama is caving. I don’t see how raising the age for Medicare entitlement is a good thing. Why is the President talking about cutting Social Security benefits when SS is not the problem?

    I hope the Democratic base in the Senate and House tell President Obama “no way”.

  18. 18
    Rosie Outlook says:

    I’m not in favor of Social Security cuts as the program is structured now, but I see nothing wrong with means testing. Why should rich folks draw a benefit they don’t need, one meant for those who do? I do not find the argument that they paid into it very persuasive, since it’s well known that they benefit disproportionately from public services.

  19. 19
    TooManyJens says:

    Wasn’t Ezra Klein telling us last week that “smart people in Washington” told him they were going to raise the Medicare eligibility age?

    Is he just the designated trial-balloon launcher, or what?

    God damn, I miss named sources.

  20. 20
    General Stuck says:

    @Patricia Kayden:

    Why is the President talking about cutting Social Security benefits when SS is not the problem?

    I haven’t heard him talk about cutting benefits/ Do you have a link where he did? otherwise, you’re statement is false.

  21. 21
    gnomedad says:

    I understand why Obama might agree to something like this. He’s, you know, a decent guy, and he doesn’t want to see average Americans hurt as a result of political gridlock. In other words, he’s saying he’s willing to compromise because he’s concerned about the fate of the hostages… but in the long run, doesn’t this just continue to empower the hostage takers?

    Any compromise will bring the wrath of the Teepers down on any Goopers who sign on. Hilarity will follow.

  22. 22
    Baud says:

    With all these “trial balloons,” leaks, whatever, one thing I have heard about is what they think will happen with defense spending, which is half the sequester in the fiscal cliff.

  23. 23
    NR says:

    @Bernard Finel:

    In short, if we need to make any concessions, relatively minor ones like chained-CPI are better than most alternatives.

    The chained CPI, spread out over many years, gets worse and worse each year, for those least able to afford reductions in their already-meager Social Security checks. This concession might be minor for you, but it won’t be for millions of elderly in the years ahead.

  24. 24
    jl says:

    The problem with the chained CPI adjustment is that the substitution effects it models are for average household, which are different than for most elderly households. So, consensus is, moving to the chained CPI will be significant cut in benefits over time.

    It might still be OK, IMHO, because it is something easy to reverse and serious damage will accumulate over time, so initial cuts will be small. In other words, it is a bad idea, a silly gimmick, probably won’t stick, and probably GOP knows it.

    If some GOP proposed deal overall is not totally awful, and Boehner can pass it with his precious (and cowardly, and self serving and chickenshit) can-pass-with GOP-votes-only policy, might be OK, since it easy to get rid off when convenient in near future. Not nearly as bad as very bad policy, counterproductive, and murderously immoral increase in Medicare eligibility.

    Seems to me that GOP is chickenshitting out, one little itty bitty step at a time. Question is when to say yes, and I am not sure when that will be. That assumes the GOP lunatics (Gohmert approved legal term) can hold themselves together to execute any plan or agreement at all, but that is out of any one else’s control.

  25. 25
    cat says:

    Substation goods for the elderly living below the poverty line is substituting hunger for food.

    SS has its own revenue stream unrelated to personal income tax. It shouldn’t even be on the table. This is a huge cave and WORSE then just falling of the cliff.

  26. 26
    jl says:

    @NR: True. That is the danger, that we cannot get rid of the stupid gimmick as soon as the time is right. But if the alternative is something worse, might be to throw the GOP that bone for now. But there is a risk, I admit that. I am glad stupid murderous garbage like increasing eligibility age seems to be off the table.

  27. 27
    Fred Fnord says:

    @MattR: Nobody even pretends that that is the case. Nobody is pretending that seniors are getting too much money, that they’re getting more prosperous as they get older.

    They are just saying, ‘look, if you want the government to keep functioning, everyone needs to sacrifice, even the seniors.’ Which is broken and stupid.

  28. 28
    Ellyn says:

    Are you kidding? That’s a horrible idea. First of all, Social Security doesn’t even contribute to the deficit. It has its own revenue stream and a $3trillion surplus which the government “borrowed” to pay for tax cuts for millionaires and unfunded wars. Many people who only get social security live on about $20,000/year. The CPI posits that if tunafish (canned) is too expensive, old people can buy cat tuna. The people who will be hardest his are elderly women who live longer than men. Is this a right wing blog? After stealing our Social Security they now want to steal more of it. Payroll taxes amount to about 45% of all revenus the Federal gov’t takes in and it has been using them in the general fund to keep the gov’t going. This is robbery of the old and the powerless and a violation of the contract we the people made with the gov’t for social insurance in our old age. http://wweek.com/portland/arti.....taxes.html

  29. 29
    Mnemosyne says:

    Here’s what seems to be the case with chained-CPI — it could work if it is also and simultaneously applied to tax brackets. Applying it solely to SS while leaving the tax brackets to change with regular CPI is a recipe for disaster.

  30. 30
    jl says:

    If I were prez, I would be publicly going for a face down now, see how strong my hand is with Congress and public. Not sure the GOP Congressional nuthouse can deliver anything anyway.

    Also, Obama said Social Security was off the table, for reasons some commmenters mentioned above. It is NOT part of the bogus debt problem. So touching Social Security at all is doubly bogus. Why is Obama not sticking with his word on that?

    Still, technical stuff like changing COLA adjustments is easier to fix than major things like changing eligibility age, so a small bit of progress if the latter is off the table.

    We can wipe out later the BS GOP symbolic swipe at Social Security through changing COLA, so might be OK to give in on that, for now.

  31. 31
    Bernard Finel says:

    @Ellyn: I didn’t say it was a good idea. I said it was one of the least bad.

    Tell me which concessions you’d prefer?

    If the answer is, “none,” then fine. I can live with that. But that means we go over the cliff, shutdown the government in Feb. etc. On the whole, I think we should embrace that as means to defang hostage taking… but I am under no illusions about the consequences. More people will suffer much more in the short run.

  32. 32
    MattR says:

    @Ellyn:

    The CPI posits that if tunafish (canned) is too expensive, old people can buy cat tuna.

    This sounds very much like an urban legend. Do you have anything that backs up this claim?

  33. 33
    Ellyn says:

    @General Stuck:
    Medicare has to remain an everyone in nobody out program because if it becomes a welfare program it will quickly disappear. Why should old people who paid their dues and were forced to pay into programs which have been very successful have to sacrifice themselves? I say eat the rich.

  34. 34
    JoyfulA says:

    I remember the Reagan-era discussions about “replacements” in CPI, with the prime example being those who couldn’t afford hamburger any longer could move to tuna. The question then concerned those now eating tuna. I suspect long memories like mine branded our more recent discussions as the Catfood Commission.

    The examples given now are worse. If the price of propane goes up, then the elderly person with an annual income of $17,000 is going to take out a big, fat loan to convert to all-electric? Or, worse, a loan to buy a wood-burning stove and learn how to chop wood?

  35. 35
    Percysowner says:

    @Rosie Outlook:

    I’m not in favor of Social Security cuts as the progra is structured now, but I see nothing wrong with means testing. Why should rich folks draw a benefit they don’t need, one meant for those who do? I do not find the argument that they paid into it very persuasive, since it’s well known that they benefit disproportionately from public services.

    Once you means test, Social Security becomes like welfare, only for “those people” who are poor and were too stupid, didn’t work hard enough, are unworthy etc., etc. The way to keep Social Security and Medicare is to make certain that the people receiving it can’t be stigmatized as “the others” in some way.

  36. 36
    Lojasmo says:

    Not buying this.

  37. 37
    The Tragically Flip says:

    The “substitution effect” is a nice neoliberal euphemism for “buying shit products because the ones you prefer are now unaffordable.”

    We can call it the “Let Them Eat I-Can’t-Believe-It’s-Not-Cake Act”

  38. 38
    Ruckus says:

    A chained CPI is a ponzi scheme. Which by itself is bad enough.llll
    It’s walmart pricing. (And wage levels- you don’t really need that second sweater even though you can’t afford heat)
    It is the stupidest thing because it means you are always going after the cheapest price which means that benefits are always going to be cut.
    Instead of figuring out ways to fuck over everyone of the in the bottom 90% why not figure out how to take a few billion out of the fucking defense budget and put it to good use? How about the fucking rich pay their due? How about we listen to the economists who have been right for the last 30 years instead of a bunch of ignorant assholes? Then the economy would be better and we would not be having a conversation on how to always cut. This cult of everyone in the bottom half of the economy being fucked over while the top 10% live in pretty massive excess has to end.

  39. 39
    Rosie Outlook says:

    @Percysowner: A point well taken. I will ponder the issue further. Thank you.

  40. 40
    Ruckus says:

    @Rosie Outlook:
    SS should not be means tested because the people who don’t need it paid into it as well. They earned it just like I did.
    Also what percysowner at 35 said.

  41. 41
    Quincy says:

    I’m with Bernard. I could live with something like this. The current Republican congress knows nothing about policy but is unmatched for stubborn brinksmanship. That makes them easy to exploit in complicated deals but dangerous to engage in a battle of wills. In a down to the wire fiscal cliff debt ceiling throwdown they absolutely could destroy the economy without knowing they are doing it. Whereas in past deals like this (2010 lame duck, 2011 budget cuts, 2011 debt ceiling sequester) they grasped at symbolic victories while Obama scored big on the details. I expect if something along these lines gets done it will again look much better for our side once the smoke clears. Probably some protections for poor seniors in the COLA adjustments and hidden tax hikes through the new inflation index as just two examples.

  42. 42
    The Tragically Flip says:

    The other thing about waiting for January to make a deal: Congress gets marginally more liberal. Whatever arm-twisting Boehner has to do to cut a deal now, he will have 8 fewer arms to twist.

    Instead of caving pre-emptively, perhaps liberals could insist on no deals until January. If you think this shitty deal is “ok” well it would get “more ok” in January.

  43. 43
    Ruckus says:

    @Bernard Finel:
    There are many ways to fix the problems. Some are good but probably impossible to get the rethugs to go along with. But we don’t need all of them to go along, we do however need to get them to bring it up for a vote.

    My standard is anything a rethug is for is bad for the country and will hurt the majority of it’s citizens. It is a standard that holds up to any scrutiny that you want to impose so I’m going with it here. They know nothing about proper governing, taxation, safety, military, foreign relations that doesn’t hurt the majority and most likely helps the 1%. Fuck them, play hardball. Otherwise we will be doing this till they all die off and that at best will be long after you are gone. Why make your life as miserable as possible for a very long time?
    BTW how do you know what your life will be like in 20 or 30 or 40 yrs? You don’t, you may think you do but you just don’t. You may need SS just to survive and if apply a chained CPI now it won’t be there when you need it. What will your kids do when they need it and it’s gone because you allowed them to screw with it for no good reason? It works, not great but it works. I’d be dumpster diving right now to survive if not for SS.

  44. 44
    Ellyn says:

    I pay a lot of attention to Digby and here’s Brian Beutler on the chained CPI via Digby:
    http://digbysblog.blogspot.com/

  45. 45
    penpen says:

    If Kevin Drum hates the CPI idea proposed it must be a real stinker.

  46. 46
    burnspbesq says:

    No, this is fucking horrible. This is worse than no deal.

    As I said in a comment at Krugman’s place last night, this offer should be rejected with extreme derision.

  47. 47
    Bernard Finel says:

    I hadn’t see Krugman’s piece on this today before I posted, but as it turns out, he and I agree. Just FYI.
    http://krugman.blogs.nytimes.c.....of-a-deal/

    And again, I don’t want to see the CPI adjustment made… but of all the bad options for a compromise, this is the least bad that has been floated thus far.

  48. 48
    burnspbesq says:

    At the risk of sounding like people I despise, this isn’t a compromise, this is capitulation. This is folding with pocket kings and a pair of aces on the board.

  49. 49
    kindness says:

    On the ride home tonight NPR was saying the new deal will raise taxes on those making more than $400K.

    WTF?!? Really? Why can’t the man I voted for 4 times (primaries included) take yes for an answer. The best solution is to let the fiscal cliff hit us in the ass and pass us by. The deficit shrinks by loads more. The Defense Dept will eat cuts (which no political group would allow if they could allow it) and shit would be a lot better.

    But no. Butthead has to be a big man an ‘bargain’ away stuff he already has. Moran!

  50. 50
    jl says:

    You could do a chained CPI adjustment for Social Security, specially tailored to model behavior of elderly. problem is, then would result in higher payments over time.

    Using average chained CPI estimated for everyone and applying to elderly is a chickenshit way of disguising a benefit cut. Which is probably why it is about only adjustment/cut/’entitlement reform’ the GOP is willing to propose.

    And means testing is bad, not only because of the political effect of gradually turning Social Security and Medicare/caid into a poverty programs, and thereby easier to kill. It is also incorrect way to look at social insurance programs that you start paying into in your late teens and twenties.

    From the perspective of a twenty something, did Bill Gates or Warren Buffet know they would be richer than rich later on? If you are rich person and you bought fire insurance for your house when you were a middle class person and a few years later your house burns down, should you receive fewer benefits just because you have a lot of money? If the answer to those questions is no, then means testing social insurance benefits make no sense.

    No means testing. Period. None. No how. Never. Forget it.

    I am willing to go along with a COLA change because I figure is it BS that can be erased very quickly, with GOP cooperation the next time they find it convenient politically to pretend to be protecting social insurance (like they really give a damn about the chump change from policy changes like this? They do not.).

    Otherwise, no on COLA BS adjustment either, and head on to the fiscal BS cliff.

  51. 51
    General Stuck says:

    @Ellyn:

    Medicare has to remain an everyone in nobody out program because if it becomes a welfare program it will quickly disappear.

    Yes, I know the dogma from the left, that is about as tight assed as the wingnuts are on any kind of compromise. I don’t buy the welfare argument for SS and medicare, as related to means testing. Both of these programs are woven securely into our national fabric, and means testing would not change the fact that everyone participates and pays in, so any calls for it being a welfare program due to means testing will fall flat with all the other schemes the right comes up with to attack entitlements.

    Here is the deal. We live in a democracy, and we do have some huge fiscal problems that are structural. I do not support cutting new deal programs benefits one iota, EXCEPT, if the cuts only effect the wealthy, and even possibly increase bennies for the not wealthy. That is progressism defined in a nutshell. It is not being as belligerent as the republicans on not giving up anything, ever. Progressives are either progressive, or they are ideologues, and the exact opposite of progressive. And being running scared of what republicans might do, is not a valid reason for not supporting progressive changes. I don’t care about the wealthy, and they really don’t need anyone to care for them. The republicans are there to pad their wealth, but either way, they don’t miss meals. So I am for anything that gives more benefit to the middle class and poor. Always. Period.

  52. 52
    Mnemosyne says:

    Also, given that Klein’s last round of speculation turned out to be a giant pile of doggy-doo, why exactly are we assuming this must be true?

  53. 53
    gnomedad says:

    @Percysowner:

    Once you means test, Social Security becomes like welfare, only for “those people” who are poor and were too stupid, didn’t work hard enough, are unworthy etc., etc.

    I’ve been “soft” on means-testing; you make an excellent point. Thanks.

  54. 54
    askew says:

    @Mnemosyne:

    Also, given that Klein’s last round of speculation turned out to be a giant pile of doggy-doo, why exactly are we assuming this must be true?

    THIS. Why is everyone treating this “deal” as fact and not more poorly sourced rumors? It seems so many on the left are just waiting to scream “sellout” at Obama that they are clinging to any rumor they get to do it. You’d think these lefties would be embarassed about their hysterics over unfounded rumors in the past and learn to not take these rumors seriously. Unfortunately, the left can’t seem to learn.

  55. 55
    Ed or Edna Dane Defender of Donuts says:

    Well if Bernard Finel thinks this deal is so orgasmic then that makes everything so much better …

    Wasn’t Bernard Finel Erick Erickson’s ghost writer until Erick decided not to pay him so Bernard decided to change his political affiliation just to spite?

  56. 56
    The Tragically Flip says:

    Means testing also doesn’t save any real money. The SS benefits paid to the rich really aren’t a big enough pool of money to even potentially be worth the risks others highlight in making SS into a welfare/charity program.

    SS benefits max out currently at about $30,000 per year. If you make the top 1% totally ineligible for SS, you save about $12B per year (based on 41M Americans over 65 today).

  57. 57
    The Tragically Flip says:

    @askew:

    You’d think these lefties would be embarassed about their hysterics over unfounded rumors in the past and learn to not take these rumors seriously. Unfortunately, the left can’t seem to learn.

    They call them “trial” balloons for a reason. Maybe you should learn that reason. Must we have this fucking point raised every time a bad policy idea is floated by well connected people as being under serious consideration?

    The fact that many of these things don’t happen is not proof they weren’t under consideration.

    Maybe you could explain what harm you see in liberals objecting to shitty ideas floated by villagers, and explain what good would come of us quietly waiting for a deal to be announced, at which point Obama will have put his name to it, and will find it doubly hard to back down?

  58. 58
    General Stuck says:

    @The Tragically Flip:

    Means testing also doesn’t save any real money.

    That’s not the point. It is as much a political bargaining chip as a money saving means. And it’s worth is measured for this progressive, on how much is gotten in return from the political process, and most of all, does it directly help or at least not hurt the poor and middle class. The only way I would be for means testing, or any of this other stuff, is for also getting the cap raised on payroll taxes, which I greatly suspect that Obama and dems are the same way. And why I think Ezra is simply full of shit, again, with this post on reading the fiscal cliff deal tea leaves.

  59. 59
    askew says:

    @The Tragically Flip:

    Oh please. This trial balloon nonsense was started by the left blogs to make themselves feel better about their irrational hysterical reactions to every unsourced rumor and to make them seem relevant. You have zero proof this is a trial balloon and not just some baseless rumor. It’s pathetic to see lefties continue this cycle of hair on fire screeds over every silly rumor. At what point will the blogs finally grow up and start learning from their countless mistakes?

  60. 60
    General Stuck says:

    The fact that many of these things don’t happen is not proof they weren’t under consideration.

    This is really beautiful, man. Elegant bullshit suitable for framing.

  61. 61
    TooManyJens says:

    @askew: Rumor or not, it’s worth contacting our members of Congress and saying “this BETTER just be a rumor.” It’s not worth acting like it’s already happened.

  62. 62
    The Tragically Flip says:

    Yes, the term “trial balloon” was invented by emoprogs on Jan 20, 2009. Could you two explain to the class how to identify real trial balloons from fake ones?

    I also asked that you explain the actual harm of reacting to shitty ideas that we know many villagers love. They’re shitty ideas and you seem to agree they’re shitty ideas so let’s bury them at every opportunity.

  63. 63
    Lojasmo says:

    @Ruckus:
    They pay in as a smaller percentage. You know that. you are a troll.

  64. 64
    The Tragically Flip says:

    FYI, it wouldn’t be a “trial balloon” if an Administration member put his or her name to it and let Ezra quote them by name. Then it’s an administration proposal, and if the reaction is poor Obama has to rebuff a member of his own staff in order to abandon the idea. The kind of thing resignation letters are made from.

    This isn’t even politics 101, this is shit covered in the West Wing.

  65. 65
    General Stuck says:

    @Lojasmo:

    The rich do pay in like everyone else, up to 100,000 smackers, they slide on the next eleventy million. So really, what we have is an inverted ponzi scheme that is about as regressive as it gets. But let’s keep it. Cuz, the wingnuts will call it welfare. It is welfare now, for the rich.

  66. 66
    askew says:

    @The Tragically Flip:

    The problem with reacting with hair on fire hysterics about rumors is that it fuels the “Obama is a sellout” narrative that hurt us in 2010 midterms. Leftie blogs and most of MSNBC spent all of their damn time discussing “trial balloons” about how at any moment Obama will be selling us out that they never talked about what Obama did right. So, the narrative going into the 2010 election was that Obama was a do nothing failure. Lefties need to learn to stop creating this cycle. It does no good to constantly assume Obama is our enemy.

  67. 67
    General Stuck says:

    The problem with reacting with hair on fire hysterics about rumors is that it fuels the “Obama is a sellout” narrative

    tis click gold for the up and coming lefty pundit.

    And I still love Ezra. His sins are not all his own design, for surviving in the world he makes a living at. He is a better wonk than pol pundit though, and he isn’t the only one in the ivory tower like that.

  68. 68
    jamick6000 says:

    Bernard, I like most of your writing but quit being such a Obot. The beginning of this post made me google something atrios wrote a while ago:

    Often the left political internet seems to go something like this:

    Firebagger: Obama’s going to do something bad!

    Obot: No he’s not, but it would be ok if he did anyway but please stop saying he’s going to because he’s not shutupshutupshutupshutup

    Don’t give me this, “oh it’s not so bad” bs. The commerce department has an experimental inflation index of items most commonly bought by the elderly. It actually shows a higher inflation rate than the CPI.

    Since the benefit decrease from the “chained CPI” (~.3 percent per year) compounds, the proposed change would hit the very oldest the hardest. Already, over 15 percent of seniors live in poverty. So we’re going to trade real harm to the very oldest for a 4 percent increase on incomes over $1 million?

    Fuck that.

  69. 69
    The Tragically Flip says:

    @askew:

    The problem with reacting with hair on fire hysterics about rumors is that it fuels the “Obama is a sellout” narrative that hurt us in 2010 midterms.

    Citation needed. I’ve looked at this general topic, and found no evidence that progressive angst had anything to do with the 2010 rout. Liberals voted in 2010 in the same proportion of the electorate they were in 2006 and 2008. They voted for Democrats even more strongly than they did in 2006, the previous mid-term.

  70. 70
    Lojasmo says:

    @kindness:

    fcuk yuorself

  71. 71
    General Stuck says:

    @jamick6000:

    The Obot was right.

  72. 72
    Yutsano says:

    Calling it now: we’re going over the cliff. Boehner is throwing out a bunch of shit with zero guarantees that he can get his Kaucus of Krazies to go along with any of it. Not to mention the Teatards will compromise with THAT ONE when pigs are expert aviators. It will get worse before it get better, I just hope I can get enough money stashed away before it all goes boom.

  73. 73
    The Tragically Flip says:

    On the other hand, there’s this:

    I recently heard an interesting anecdote about the 1993 budget fight. While it is probably the most progressive piece of sizable legislation to pass into law in two decades, it was a grueling fight–passing both branches of Congress by a single vote–and it still could have been better. At the signing ceremony, President Clinton found then Representative Bernie Sanders, and told Sanders that he, Sanders, should have made a much bigger public display of how he, Clinton, wasn’t giving enough to liberals in the new budget. Such a public display would have provided Clinton more room to maneuver on the left.

    Yes, yes, unverified anecdote but the principle is plausible and certainly works for the right when they do it to their political leaders.

    It can only help Obama to be able to say, truthfully, in the room with Boehner and whomever else “I can’t take that deal, my base won’t go for it. Go look at their reaction to even the suggestion of it.”

  74. 74
    General Stuck says:

    @Yutsano:

    seconded

  75. 75
    FormerSwingVoter says:

    You guys realize that going over the fiscal cliff would be bad, right? Even though it would make Republicans look like assholes?

  76. 76
    catclub says:

    Wouldn’t an honest (ha, ha, I kill myself)
    approach be 1. Apply the senior Citizen CPI, since by coincidence, almost all of the SS recipients are seniors,
    and 2. Then apply the chained CPI to that?

    of course, since the senior citizen CPI is still going through the roof (healthcare deductibles and co-pays), that is untenable.

  77. 77
    jamick6000 says:

    @Bernard Finel:

    Also, we have to recognize that the poverty rate for the elderly has declined dramatically over the past 40 years and is now consistently lower than that of children. This is part of general generational wealth transfer system we have in place.

    What the fuck does this mean? Social Security is contributing to child poverty? Explain that. Were the children better off before SS? Of course that’s ridiculous. The real wealth transfer has been going up the income ladder; that’s also the one increasing child poverty.

    As people who actually care about child poverty understand, this change would also affect SSI, which benefits poor children, those with disabilities, etc.

  78. 78
    Yutsano says:

    @FormerSwingVoter: It will suck for me probably more than most on here, as if we go over the cliff that means the debt ceiling will be a helluva fight and I’ll have an unplanned vacation come February. But I don’t see much in the way of meeting of minds here, Actual Orange Satan is proposing same old shit in prettier packaging.

  79. 79
    RobertDSC-PowerMac 466 says:

    The biggest driver of our deficit and debt are the Bush tax cuts. All of them need to expire. The cliff will do that. Come back with a different Congress and start fresh. Don’t deal with these fuckups anymore.

  80. 80
    catclub says:

    @The Tragically Flip: “Means testing also doesn’t save any real money.”

    I think I am agreeing with you that the amount of money is totally not the point. Consider ‘Foreign aid’ or NPR or Planned parenthood. FAR FAR smaller amounts than the $12B are suddenly worth dying for, or making a huge stink over.

    The funny part seems to me:
    Republicans say that the extra amount raised by increased taxes does not solve the entire deficit problem, so it should not even be bothered with, but cutting of NPR ( I think it is under $1B) is crucial every year. The amount raised by the extra taxes on the 1%? A whole heckuva lot more than $1B.

  81. 81
    Mnemosyne says:

    @The Tragically Flip:

    I also asked that you explain the actual harm of reacting to shitty ideas that we know many villagers love.

    It depends on how you react. If your reaction is, “That’s a really shitty idea — what kind of idiot would support something that stupid?” that’s a helpful reaction that defuses the Village narrative.

    If your reaction is, “OMG OBAMA SOLD US OUT I ALWAYS TOLD YOU THIS WOULD HAPPEN!” that’s not a helpful reaction, because it feeds the Village narrative that Even Liberals Hate Obama, which is one of their favorite and most-used narratives.

  82. 82
    FormerSwingVoter says:

    @Yutsano: Not quite – the stimulus would help offset much of the spending cuts from the sequester, and if the sequester gets pushed off to mid-year it’ll really help out.

    Maybe my perspective is skewed because I’ve believed for a while that chained CPI is the most accurate measure of inflation. And I’d certainly prefer it if we got our way on everything instead of having to give ground on some things. But I don’t look at this as a worse deal than the status quo, because the stimulus means this would be better for the short-run economy than full sequester plus raising taxes on income over $250k.

    EDIT: It helps that the CPI change would be designed so as to not affect the most vulnerable, and the debt limit would get bumped up for two years instead of one:

    http://news.yahoo.com/hopes-ri.....iness.html

  83. 83
    JS says:

    @catclub:

    Republicans say that the extra amount raised by increased taxes does not solve the entire deficit problem, so it should not even be bothered with, but cutting of NPR ( I think it is under $1B) is crucial every year.

    Per Wonkblog, $445 million in 2012. And that’s for all public broadcasting, NPR, PBS, Big Bird and the lot.

  84. 84
    burnspbesq says:

    @Yutsano:

    Actual Orange Satan is proposing same old shit in prettier packaging.

    Pretty much. Eight pounds of shit in an eight-pound bag is not materially different from eight pounds of shit in a five-pound bag.

  85. 85
    Ruckus says:

    @Lojasmo:
    First of all asshole, I’m not trolling.

    Second, sure they pay in a smaller percentage of their total earnings but they pay in the same percentage up to the max. And they are limited to the max return. It’s a fucking insurance program and they get the same percentage of return as I do per the amount paid in.

    Third. I have no idea about this but have never heard how many rich fuckers even take their SS benefits. I would imagine being rich cocksuckers that they would take all they can but I don’t know if they are. That might be a nice thing to find out, are they even taking them?

  86. 86
    NR says:

    @askew: I was wondering when the apologists were going to show up.

    The reason that now is the time to complain is that because once the deal is struck, you and the rest of the apologists will be out in force screaming that the chained CPI isn’t so bad, that it’s only small cuts that no one will notice, and thank God that Obama was able to protect us from bigger cuts.

    Then, when the Republicans retake the Senate in 2014 as a result of this deal, you and the rest of the apologists will once again blame liberals for staying home, and scream once again that Obama was betrayed by disloyal liberals who created a harmful narrative about him because they just couldn’t see how awesome he was for selling out the poor and the elderly.

    Lather, rinse, repeat.

  87. 87
    dollared says:

    @Fred Fnord: this. Thanks for saying it better n me.

    For 30 years the Democrats have cowered in fear as the rich have stolen all the fruits of the most productive workers in the world, and then cut their own taxes -with the complicity of some Democrats. And now the Obama administration wants to cast that theft in stone by cutting Social Security to pay for Republican deficits.

  88. 88
    dollared says:

    @Bernard Finel: @Ruckus: They take every fucking penny. The percent that don’t take SS is infinitesmal.

  89. 89
    Ruckus says:

    @dollared:
    Pretty sure you are correct, when hasn’t a rich cocksucker taken all they can, earned or not, but it would be nice to know if numbers exist.

  90. 90
    Cthulhu says:

    SS and Medicare didn’t have FA to do with getting us INTO debt, that would be the two credit card wars, and the unpaid Medicare Part D.

    So putting Medicare or SS or both “on the table” is ridiculous.

    It wasn’t the lower and middle class that crashed the economy, it was the Republicans. Why should we clean up their mess?

    Not that I have any hope of it, but the President has to stand firm and tell the Rethugs to pound sand. Letting the tax rates of the rich return to the Clinton era levels isn’t a “Tax Raise”. Obama should start there, and start raising them every time Boehnor balks, until they are at FDR levels. Maybe he’ll get the idea.

    Don’t budge President Obama. It’s time the Rethugs paid the price for their adventurism and catering to the rich, not us little people.

  91. 91
    k55f says:

    “And if it helps stave off changes in the Medicare retirement age, it would be a net plus even for the elderly”
    Let’s see… we lose cost-of-living, and medicare stays the same.
    How is that a “net plus”? 2+2=5?

  92. 92
    Humble Lurker says:

    @NR:
    Let me ask you something: have you ever been right about anything here? I’m being sincere here.

  93. 93
    SeniorD says:

    Another take on this is that The taxes will have to be RAISED especially on the Ultra Wealthy, since they are the only ones that can (will be able to in the future) afford it.

    With the COLA now officially at 1.7% it means all those on Social Security are now being left by the side of the Fiscal Highway.

    How about those looking forward to retiring “soon,” if the retirement age gets increased then each of these folks will be “TAXED” about $13,000 because of the delay in receiving their SS benefit (~$1,000+ per month).

    If access to Medicare is raised to 67 instead of 65 all these same people will have to self insure their own health instead of being to access Medicare benefits.

    Who is left to tax beside the younger workers that now have much less benefits and job security than “our parents did,” so they will vote for increased taxing of, you guessed it, the rich instead of themselves!

    The GOP better take a good look into their fiscal crystal ball and start making a much higher percentage of voters see things their way or they will continue to lose elections, except in States where the “machine” still controls election outcomes, there the poor will get much poorer!

  94. 94
    SeniorD says:

    If President Obama thinks he is helping the majority of Americans, I challenge him to ask for the TOTAL amount of LOSS to the middle class by his cave-in to the Ultra Wealthy in order to make a deal that will be trivial to the Ultra Wealthy and a huge reduction to the fiscal well being of the majority of Americans from now on

  95. 95
    SeniorD says:

    Tip for President Obama

    Do what is BEST for those still left in the middle class and below because if you don’t then America as we now know it will fail to exist.

    Each day that goes by ever more once proud middle class people become part of the New Poor, thanks to the foot dragging GOP…

    You have given far too much to the Wealthy already and if your advisors continue to persuade you to keep yielding to the Ultra Wealthy, you will be known as THE President that sold THE Middle Class into SLAVERY!

  96. 96
    SeniorD says:

    Social Security, Medicare, and Medicaid programs are ONLY 6% of the 2013 Recommended Discretionary Spending, while the Military budget is OVER 60% (and that does not add in all the secret or “Black” programs)! If we “just” reduced our Military to about 40% it would be at 2002 levels, were we in greater danger then than now? http://www.OneMinuteForPeace.org

    The Gov’t needs to end the Wars (including the War on Drugs) we are not winning and get back into making things better in the USA by rebuilding our infrastructure ASAP, before China buys all the Earths raw materials needed to do it with.

    Articles attacking Social Security, Medicare and Medicaid are nothing but a cheap shot at all those that have the least ability to defend themselves. aka GOP Bully Politics

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