Voters who cast their ballot for Barack Obama in November have a right to be angry. After criticizing Mitt Romney as a “reverse Robin Hood” and deriding Paul Ryan’s budget plan as “social Darwinism” (a plan which would privatize Medicare, costing the average senior an extra $6,350 in out-of-pocket medical expenses), the president has proposed a “compromise” budget that would take the ax to Social Security.
“Disguised as [a] deficit reduction plan, it’s really an attempt to impose a radical vision on our country. It’s nothing but thinly-veiled Social Darwinism. It’s antithetical to our entire history as a land of opportunity and upward mobility for everyone who’s willing to work for it — a place where prosperity doesn’t trickle down from the top, but grows outward from the heart of the middle class. And by gutting the very things we need to grow an economy that’s built to last — education and training; research and development — it’s a prescription for decline,” the president described Paul Ryan’s budget during the campaign.
Now the president takes his own swing at social Darwinism. Politicians in Washington have found a nice new term for cuts to Social Security. They call it “chained CPI“, which would reduce cost of living adjustments (COLA) to less than inflation. The chart below reflects different COLA projections: blue represents a more generous COLA for the elderly due to higher health costs, red is the current model, and green represents chained CPI.
The president pretended to be a defender of the poor and middle class in the campaign, declaring that “no current beneficiaries should see their basic benefits reduced” and “the administration will not accept an approach that slashes benefits for future generations.” Now that he has won re-election on a mandate to preserve both Social Security and Medicare, the president has reversed course and is looking to strike a “grand bargain” with Congressional Republicans on deficit reduction. The problem is that he plans on doing so not by addressing the main drivers of our deficit – the bloated military budget which is rapidly approaching an unsustainable trillion dollars a year or historically low tax rates – but instead by targeting the very program that defines the modern Democratic Party.
Forty-four percent of seniors would live in poverty if Social Security were not in existence today. It is a vital program for the well-being of this nation’s most vulnerable citizens. It has greatly reduced the incidences of homelessness and premature death.
Any tampering of the Social Security system should keep these facts at the forefront of discussion. But in Washington, the impact that cuts have is often one of the least concerns. Many politicians, especially on the right, see Social Security as just another line on the federal budget.
This is a problem for a number of reasons. Social Security is a program that is fully financed by beneficiaries. Social Security is a retirement insurance program that you pay into your entire life. It is a guaranteed benefit, a social contract that our government has had since the New Deal.
Second, a quick look at the budget will show that Social Security does not contribute to the budget deficit and has not for decades. In fact, the federal government has raided the Social Security Trust Fund to pay for things such as wars, tax cuts and stimulus measures. Amazingly, $2.7 trillion was owed by the federal government to the Social Security Trust Fund in 2011, according to a Trustee report.
In other words, the government has taken your retirement money to pay for its pet projects. The Afghanistan and Iraq wars, for instance, are estimated to cost a stunningly high $4 to $6 trillion over the long haul due to veteran medical costs and interest on the debt. Now politicians in Washington want to add insult to injury by cutting benefits to retirees after they blew their life’s savings on everything except for Social Security.
As is typical in Washington parlance, instead of calling chained CPI what it is – a benefit cut – they are instead referring to it as “savings”. And for his part, President Obama says that his proposed budget is a “compromise” which includes chained CPI as a component to deficit reduction.
The problem is that Congressional Republicans weren’t even at the bargaining table. Speaker Boehner rejected the plan out of hand on the basis that it includes any tax increases at all. In fact, it’s a remarkably generous proposal that offers $2 in spending cuts (to Social Security and other cherished programs of Democrats) for $1 in tax increases.
“If the president believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes. That’s no way to lead and move the country forward,” Boehner said.
Once again, the president has negotiated with himself. Boehner can now turn around and say that Obama’s “compromise budget” is the starting point for negotiations and we end up near the Ryan budget as an end point. This is not how a negotiation is supposed to work.
The president has failed voters who believed in his message of fairness. He has thrown seniors and future retirees under the bus in favor of an ever-elusive “grand bargain”. Let the Republicans be the ones to call for cuts to a program that is vitally important for seniors. They’ve been doing it since the program was founded nearly a hundred years ago. We’re Democrats. We believe in strengthening Social Security, not leaving seniors at the mercy of overzealous bean counters who harp about the deficit but ignore its true causes. President Obama, we deserve better.