This is what hit me first this morning:
President Barack Obama's offer to slow the growth of Social Security benefits would force fellow Democrats in Congress to abandon promises to shield the massive retirement and disability program from cuts as part of negotiations to avoid the year-end fiscal cliff.
Both Senate Majority Leader Harry Reid, D-Nev., and House Minority Leader Nancy Pelosi, D-Calif., pledged not to touch Social Security as part of deficit reduction talks. Now that Obama and House Speaker John Boehner, R-Ohio, have agreed to a new measure of inflation that would reduce annual cost-of-living adjustments, or COLAs, for Social Security and other government programs, Democrats are reluctant to call it a deal-breaker.
Umm -- I seem to remember a candidate up for re-election who insisted that Social Security was off the table in deficit reduction talks. And he's been insisting that Social Security has nothing to do with the deficit, which anyone who's been paying attention knows. Via e-mail from DailyKos:
This proposed benefit cut goes against previous statements from the White House which indicated that Social Security cuts would not be part of negotiations because Social Security is not the cause of or solution to our budget woes. On November 26, 2012, White House spokesperson Jay Carney stated, “Social Security is not currently a driver of the deficit. That's an economic fact.”
Gaius Publius has a couple of cogent posts on this at AmericaBlog. First, the cave, quoting WaPo:
President Barack Obama has agreed to curtail future cost-of-living increases for recipients of Social Security and softened his demand for higher taxes at upper income levels as part of accelerating talks with House Speaker John Boehner to avoid a “fiscal cliff,” people familiar with the talks said Monday.
Read GP's post -- he's got good detail on what's under attack (it's not just Social Security) and how bad it will be.
And here's his post on the "chained CPI" proposal. A good analysis from Salon:
The CPI, or cost of living index, is used to make sure benefits keep pace with inflation, but there are lots of different ways to calculate it. The current measure, called the CPI-W, is generally accepted to overestimate inflation, but the liberals say the proposed alternative, the chained CPI, is too stingy. The chained CPI assumes seniors will adjust their buying habits in response to price shifts (e.g., if the price of oranges goes up, they’ll buy more apples), so they should be able to afford to take a haircut on benefit checks. But liberals say that seniors often barely make ends meet with current benefit levels, so cutting them more would be devastating.
Democratic Rep. Keith Ellison, the chairman of the Congressional Progressive Caucus, noted that 102 House Democrats have already said that Social Security changes should be kept off the table in these negotiations. “Everyone has a grandparent, a friend or a neighbor who relies on the Social Security benefits they earned to pay for medical care, food and housing. A move towards chained CPI would be a long-term benefit cut for every single person who receives a Social Security check,” he said in a statement.
The chained CPI would cut about $6,000 worth of benefits in the first 15 years of retirement for the average 65-year-old, and $16,000 over 25 years.
For those who like pictures:
Here's another showing just how much the chained CPI would lower benefits compared to the current index:
Both images from StrengthenSocialSecurity.org.
I'm starting to wonder if maybe I should have voted for the robot instead of the snake. The result would have been the same, but at least we would have known what we were getting.
You know the drill -- call or write your reps and make a lot of noise. Maybe you should even write the president, just so he knows we're not as stupid as he thinks we are.
Update: Here's Matt Yglesias on the Chained CPI.