Nel's New Day

April 13, 2013

Chained CPI Cuts Benefits

Filed under: Uncategorized — trp2011 @ 8:12 PM
Tags: , , ,

When the president released his 2014 budget earlier this week, the media immediately focused on his Social Security position. Conservative Republicans tried to complain about how President Obama wants to increase taxes on the wealthy and corporations, but the difference of opinion between Reps. Greg Walden (R-OR), NRRC chair, and John Boehner (R-OH), House Speaker, took center stage when Walden complained about the president ripping off seniors.

The president’s horrifying proposal links Social Security cost-of-living-adjustments (COLAs) to “chained CPI” (chained consumer price index). Each year, the Social Security gods decide whether there will be a slight increase in benefits based on inflation in one quarter’s Consumer Price Index. In the past three years, there was no COLA for two separate years in Social Security benefits. Yet the new way of determining the level of inflation gives an even more unfair method of establishing future benefits.

“Chained” connects the way that people buy cheaper stuff when costs rise. If they do that, according to the government, then they aren’t spending any more so there is no inflation. No inflation, no increase in benefits. The problem with this for many seniors is that they can’t buy cheaper because they are buying as cheap as they can. Also, the chained CPI isn’t the same for seniors as for others. Serious inflation for that age group comes from health care, but costs for this are skyrocketing.

Defenders of this proposal claim that it isn’t a cut–just a slowdown in the rate of  increases. It’s a cut! People get less money.

The government can get $122 billion during the next ten years in a variety of ways that doesn’t hurt the vulnerable:

  • Close capital gains loopholes: $174 billion.
  • End the Bush tax cuts at Obama’s original $250,000 level, rather than the compromise $400,000 number: $183 billion.
  • Cut overseas military bases by 20 percent: $200 billion.
  • Negotiate with drug companies: $220 billion.
  • Enact “Defense-friendly” Pentagon cuts: $519 billion.
  • End corporate tax loopholes (without being “revenue neutral,” as the President’s proposing): $1.24 trillion.
  • Enact a financial transaction tax on the folks who ruined our economy: $1.8 trillion.
  • And more!

In addition, cutting the Social Security doesn’t reduce the deficit because Social Security is separately funded. In fact, law forbids Social Security from contributing to the deficit.

Implementing the chained CPI for Social Security also means cuts for more than 4 million children because one or both of their parents are disabled, retired, or deceased. For some of them, like Rep. Paul Ryan (R-WI), benefits mean a college education. Social Security keeps 21 million people above the poverty line; about one-third of these are under retirement age, and 1.1 million are under the age of 18.

Bob Cesca gives a series of myths—lies that Washington lawmakers have been spreading so that they can give more money to the wealthy and corporations:

Social Security is broke. This is the first thing that they say about Social Security because the GOP wants to get rid of Social Security. Nobody involved in Social Security thinks that Social Security is going broke: the trustees say that without any changes, the program can keep paying for the next 20 years and may even run a surplus until 2033. No other government program is running a surplus, but conservatives want to get rid of this one.

Social Security increases the deficit. So does the inflated tax cuts and subsidies of the wealthy and the corporations, but no conservative asks them to “sacrifice”—to pay an extra small percentage of their millions and billions. They have the lobbying power; the poor don’t. And Social Security isn’t attached to the deficit; it’s a separate program.

The U.S. can’t survive without cutting the deficit. The deficit is already shrinking. As a percentage of the GDP, it’s dropped by nearly 48 percent since President Obama first took office. In raw numbers, the deficit has gone down from its top of $1.4 trillion in 2009 (the hangover of the Bush years) to a projected $845 billion by the end of this year. The CBO projects that by the end of 2016, the deficit will have dropped to $433 billion, for a total of nearly a trillion dollars in deficit reduction in six years. This can continue if lawmakers don’t force austerity on the United States to slow the economy. A better economy results in more taxes from the 99 percent which then further reduces the deficit. More jobs create more jobs that create more jobs ad infinitum.

Raising the payroll tax rate or lifting the income cap is impossible. Raising the income cap on the payroll tax from $113,000 to $200,000 wouldn’t affect the bottom 80 percent of the population. A person making $200,000 would pay less than $5,000 if the cap were raised. And if it were eliminated, Social Security could pay full benefits until 2087. Republicans have raised the income cap before: in 1983, President Reagan signed Social Security reform legislation that increased the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees.

The deficit has no relationship to the nation’s economic problems. The GOP lawmakers that 2010 swept into Congress and onto state legislatures had campaigned on getting jobs for people in the United States. They failed. If they had worried about expanding growth instead of breaking unions, the country would have wage growth, consumer confidence, financial security for the elderly and disabled (which means increasing Social Security). Increased Social Security can help do all this because the poor will spend their money and create more jobs. The wealthy will just stash their money out of the country. Austerity will automatically increase the deficit.

The supreme advantage of Walden objecting to the chained CPI is that it gives the president a perfect reason for dropping the idea from his budget proposal. “I thought Republicans wanted this policy,” he could say. “But if they consider this ‘a shocking attack on seniors,’ I’ll gladly drop the idea.”

Following is the letter than I received from Sen. Jeff Merkley (D-OR) about Social Security. He makes sense.

“I see Social Security and Medicare as a covenant with seniors.  People work their whole lives with the understanding and expectation that they can rely on these programs when they retire. That’s why I was so distressed that the President’s proposed 2014 budget included the idea of applying the so-called ‘chained CPI’ to Social Security. ‘Chained CPI’ is DC-speak for cutting the hard-earned benefits of seniors who have worked their whole lives.

“This new way of calculating inflation would mean a smaller annual cost-of-living adjustment (COLA) for Social Security, but seniors already get less than they need to keep up with the inflation they face.  In fact, in two of the last four years, there was no COLA at all.

“There seems to be a view among some in Washington that we have been too generous to our seniors. They are simply wrong. Seniors receive an average of $1,230 a month from Social Security.  For more than half of our seniors Social Security constitutes a majority of their income. For a third, it’s nearly 90 percent of their income.

“There’s no crisis facing Social Security–it’s going to pay full benefits for a generation before the trust fund starts running short.  We do need to address the long-term financing, but not by making seniors close to the edge already cut back even further.  And it’s important to note that Social Security has not increased our debt or deficits by one dime. If the goal is to lower our debt and deficits, there are plenty of ways to do so that will not affect seniors living on fixed incomes: ending the war in Afghanistan, closing loopholes in the tax code that mainly benefit the wealthy and well-connected, and stopping handouts of wasteful subsidies to big agriculture companies through direct payments.

The implementation of chained CPI will pull at least $12.2 billion out of circulation each year. That’s $12.2 billion that could employ people because people who get Social Security use their money to buy food, shelter, medical needs, and other necessary expenditures. The wealthy would just take that money and send it offshore.

April 12, 2013

Lawmakers Represent GOP Positions

The primary GOP strategies of 2013 were made obvious during this last week by three high-profile Republican legislators: (1) attack when caught in planning slimy attacks on opponents; (2) outrageously pander and lie to minorities; and (3) disagree with anything that President Obama suggests even if was originally the GOP position.

Item #1: The first fool of the week is Senate Minority Leader Mitch McConnell (R-KY) who, with his 37 percent popularity rating, is fighting for re-election in 2014. Caught on tape approving his campaigners’ suggestions to destroy potential opponent Ashley Judd, McConnell immediately called the FBI, an odd reaction for someone who wants “small government.”

On February 2, McConnell met with staff in Louisville (KY) and told them, “I assume most of you have played the, the game Whac-A-Mole? This is the Whac-A-Mole period of the campaign…when anybody sticks their head up, do them out.”

Campaigners took McConnell at this word. They began their discussion with her progressive positions and then moved on to find ways to show that she is mentally unfit for McConnell’s position:

“She’s clearly, this sounds extreme, but she is emotionally unbalanced. I mean it’s been documented. Jesse can go in chapter and verse from her autobiography about, you know, she’s suffered some suicidal tendencies. She was hospitalized for 42 days when she had a mental breakdown in the ’90s.”

McConnell went into full-blown hysteria when Mother Jones released the tape of this meeting. He didn’t negate their underhanded tactics; he just tried to guess who had made the recording. First it was the “far-left” organization called ProgressKY and then “the liberal media.” He had the room swept for bugs and declared that the episode was “Nixonian,” ignoring the fact that Watergate was caused by a Republican, before he used the incident for raising funds.

Campaign manager Jesse Benton described the matter as “an ongoing criminal investigation” and described the taping as “Gestapo king of scare tactics” on Mike Huckabee’s radio show. “Obviously a recording device of some kind was placed in Senator McConnell’s campaign office without consent,” she said.

McConnell should have stuck to his accusation that ProgressKY, a fundraising group, was responsible for the recording of the meeting. Shawn Reilly, head of the PAC, is cooperating with the FBI in witnessing the recording. And Benton was wrong about a “recording device” in McConnell’s “office.” The taping was done in the hallway outside the office.

After McConnell asked for the FBI to investigate the taping, the Citizens for Responsibility and Ethics in Washington (CREW) asked both the FBI and the Senate ethics committee and the FBI to determine whether there was a violation of the law. “Using taxpayer-funded resources to pay staffers to dig up dirt on political opponents isn’t just an ethics violation, it’s a federal crime,” said CREW Executive Director Melanie Sloan. Another ethics question is whether someone from Karl Rove’s American Crossroads SuperPAC led the group just five days before their hit piece on Judd.

Item #2: Rand Paul, riding high after his win at CPAC for top conservative presidential candidate, has started with reaching out to black voters at Howard University. Unfortunately for him, it wasn’t an overwhelming success.

Words cannot describe the painful visual delivery of his presentation as he touted the strong Republican support for minorities—before the Civil Rights Movement of the 1960s. While doing so, he queried his audience to see if they knew that Republicans had overcome slavery and started the NAACP, information that his college-educated black audience well knew. They even had to correct him when he referred to Sen. Edward William Brooke III, “the first [elected] black U.S. senator” as “Edwin Brooks.”

He told his audience that the GOP lost their votes because Democrats began offering “unlimited federal assistance,” while Republicans offered something “less tangible–the promise of equalizing opportunity through free markets,” a repeat of Mitt Romney’s statement that the Democrats won in the last election because they gave the 47-percenters “stuff.”

Worse was his attempt to persuade the audience that declaring voter ID laws discriminatory is “demeaning” to the history of segregation. Paul hadn’t done his NAACP homework on this one: the organization’s president, Benjamin Jealous, said that voter ID laws are “pushing more voters out of the ballot box than any point since Jim Crow.”

The saddest part of Paul’s misguided attempt to woo black voters was his lie about his earlier position on the Civil Rights Act. “I’ve never wavered in my support for civil rights or the Civil Rights Act,” he stated. A member of the audience pointed out, “This [opposition] was on tape.” Early in Paul’s campaign for Senate in 2010 was that he disagreed with the Act’s ban on discrimination in private businesses such as restaurants. He later switched his position during the campaign, most likely because it didn’t play well, but his statement about never wavering is completely wrong.

Item #3: Rep. Greg Walden’s (R-OR) position to President Obama’s support of incorporating the “chained CPI” into Social Security’s COLA has caused him—and the GOP—a lot of trouble. Following the typical GOP caucus response of “disagree with anything this Democratic president says,” Walden, chair of the National Republican Congressional Committee that determines next year’s House campaigns, said that reducing this vital source of income was “a shocking attack on seniors” and “trying to balance this budget on the backs of seniors.” In fact, it’s just what the GOP wants: cut benefits to senior citizens.

In the past, Republicans have rejected their own proposals–cap-and-trade, Dream Act, EITC, payroll tax cut, etc.—whenever President Obama agreed with them. But disagreeing with the chained CPI seemed to go too far. House Speaker John Boehner (R-OH) said, “I’ve made it clear that I disagree with what Chairman Walden said.”

Press secretary Jay Carney dived into the fray, saying that this proposal comes from GOP leaders:

“This is a Republican proposal. And cynical attempts to make it otherwise by some represent, I think, dissonance within the Republican Party, and we’ve seen plenty of condemnation from conservatives and Republicans of that sort of flagrantly ridiculous and cynical attempt to disown a proposal that emanated from Republican leaders.”

From the other side, the far-right Club for Growth announced it will find a farther-right candidate for the 2014 primary because of Walden’s statements. Walden’s district covers two-thirds of eastern Oregon, and he knows it well, having represented it for 14 years. With a disproportionate percentage of seniors, the area, relying on farming and ranching, was one of the hardest hit by Bush’s recession. Typical of many rural areas, they hate outside agitators.

Good luck to the Washington, D.C. pressure group! The best thing that could happen to Democrats in this district is a far-right candidate in the general election who doesn’t want benefits for seniors.

As for finding someone more conservative, you can check out his record. He got 0 percent from FAIR on immigration, CAF on energy independence, ARA in senior benefits, and AU in separation of church and state; 13 percent from the AFL-CIO and ACLU; 20 percent from the National Educational Association; 30 percent from NARAL; and 96 percent from the U.S. Chamber of Commerce.

I’m guessing that all three of these legislators will stay in Congress, but I don’t give Rand much of a chance for becoming president.

December 26, 2012

Fixing the Economy Again

Filed under: Uncategorized — trp2011 @ 8:52 PM
Tags: , , , , ,

Last week, House Speaker John Boehner (R-OH) shut off the lights and left town because he couldn’t manage his Republicans. The Tea Party members refused to consider any compromise, and the House couldn’t pass a budget proposal without them. Today President Obama returned to Washington from his holiday vacation in Hawaii, but Boehner is nowhere to be seen.

Yesterday I provided a fantasy approach of income equality that would solve the country’s deficit problem. Richard Eskow has a more pragmatic approach that might get passed.  The most important part of Eskow’s positions is to do away with what is called the “chained CPI” or “chained Consumer Price Index,” a strange approach to figure out a cost-of-living revision for Social Security.

At this time, Social Security payments are tied to the cost of living increases, meaning that it goes up based on how much prices go up. But the chained CPI has a peculiar twist. The higher the prices, the less people can afford to buy things so the lower the cost of living because they can’t afford these purchases.

For example, if the price of gasoline triples from $3.33 to $10 per gallon, then this is a 200-percent increase. But not with the chained CPI. Because people can’t afford $10 per gallon, they would buy less, which means that the cost of living increase is less than 200 percent because people aren’t buying it. Thus people get poorer and poorer, swelling from $1.4 billion in the first year to $122 billion by the tenth year.

If prices of anything goes up and people buy less, then there’s no inflation, according to chained CPI, because people don’t spend more. For example, if seniors eat pet food because they can’t afford the rising prices of chicken, then the government will pretend that seniors are doing fine because they can still buy food.

Tell the president and your House representatives to forget the chained CPI and do these instead. Notice how much more than the $122 billion from the Social Security “savings” that the country can put against the deficit.

  • Close multiple loopholes in the capital gains law – $174.2 billion: These include the “carried interest” loophole, which taxes hedge fund managers’ service fees at the low “investors’” rate; the ‘blended rate,’ which taxes some quick derivatives trades as if they were long-term investments; the ability to ‘gift’ capital gains to avoid taxation; a dodge for bartering capital gains; and the ability to ‘defer’ gains to future years.
  • Eliminate the capital gains altogether – $900 billion in savings.
  • Keep the president’s $250,000 figure for increased taxation – $183 billion: Changing this figure to $400,000 would reduce the deficit reduction impact by $183 billion.
  • Reduce the budget for U.S. overseas military bases by 20 percent – $200 billion: Dropping 702 of 4,471 military ‘installations’ in 63 foreign countries wouldn’t include bases in Iraq and Afghanistan, just those in nations such as Germany, South Korea, and Japan. The ten-year cost for these 4,471 bases is approximately $1 trillion. The waste in the Department of Defense is also high. For example, armed forces has 963 generals and admirals, 100 more than 9/11 when the Pentagon’s budget was half what it is now. A retired U.S. Army Colonel and military analyst said that the military needs only one-third of these high-ranking officers. The rest of them operate as lobbyists for the Pentagon while they have private jet rides and huge personal staffs that costs over $1 million—per general, totaling  $100 million just for those officials. U.S. taxpayers spend billions of dollars a year for  other luxuries. The Pentagon, for example, runs 234 golf courses around the world at an undisclosed cost. DoD’s Sungnam golf course in the Republic of Korea, meanwhile, is reportedly valued at $26 million. The military ski lodge and resort in the Bavarian Alps, which opened in 2004, cost $80 million. Marching bands also cost $500 million annually.
  • Allow the government to negotiate with drug companies – $220 billion: Current law specifically forbids the government from negotiating for lower rates for Medicare prescriptions  although the government paid for much of the research to develop the drugs.
  • Enact DoD-friendly cuts to military budget – $519 billion: Experts in the defense community came up with options that balanced short-term readiness with long-term preparation.
  • Enact Rep. Jan Schakowsky’s ‘Fairness in Taxation Act’ for very high earners – $872.5 billion: This solves the current tax structure that “fails to distinguish the merely ‘well-off’ from the ‘super-duper rich.’” It also taxes capital gains and dividend income as ordinary income for taxpayers with income over $1 million. Brackets would be as follows: $1-10 million: 45%; $10-20 million: 46%; $20-100 million: 47%; $100 million to $1 billion: 48%; $1 billion and over: 49%. The very wealthy would still pay much less than under Republican President Dwight D. Eisenhower, when the top rate was 91 percent as well as less than under most American presidents of the last century.
  • Eliminate corporate tax loopholes – $1.24 trillion: A 2007 Treasury Department report during George W. Bush’s second term concluded that “corporate tax preferences” (aka loopholes) lost $1,241,000,000,000 over a ten-year period.
  • Create a financial transactions tax for high-volume Wall Street trading – $1.8 trillion: The UK tax is 0.25 of each transaction, levied on both parties. Beyond the fiscal advantage, this might discourage the massive volume of ultra-high-speed computer-driven transactions that have turned the stock market into both an imperceptible “black box” and a real-time mega-casino operating in nanoseconds. “Algorithmic trading” doesn’t build economic value or encourage wise investment; instead it helped cause the 2008 recession.More than 200 economists have signed a letter supporting the concept of a financial transaction tax.

These solutions would bring in over $6 trillion in ten years rather than the $122 billion that cutting back Social Security would. The poor and middle class didn’t cause the problems with the economy; they shouldn’t have to pay for solving the problem. And people paid into Social Security. The money still exists; it’s just that George W. Bush took it to cover how high the deficit was becoming after he lowered taxes and started two wars.

Appropriations are something to watch during the next term. Sen. Barbara Mikulski (D-MD) will chair that chamber’s Appropriations Committee after the death of Sen. Daniel Inouye (D-HI. The position gives her power in setting the agenda for domestic spending, including policies that benefit women and families.

© blogfactory

Genuine news

Civil Rights Advocacy

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has. -- Margaret Mead

AGR Daily 60 Second News

Transformational News; What Works For Seven Future Generations Without Causing Harm?


Res ipsa loquitur - The thing itself speaks

Jennifer Hofmann

Inspiration for soul-divers, seekers, and activists.

Occupy Democrats

Progressive political commentary/book reviews for youth and adults

V e t P o l i t i c s

politics from a liberal veteran's perspective

Margaret and Helen

Best Friends for Sixty Years and Counting...

Rainbow round table news

Official News Outlet for the Rainbow Round Table of the American Library Association

The Extinction Protocol

Geologic and Earthchange News events

Central Oregon Coast NOW

The Central Oregon Coast Chapter of the National Organization for Women (NOW)

Social Justice For All

Working towards global equity and equality

Over the Rainbow Books

A Book List from Gay, Lesbian, Bisexual, and Transgender Round Table of the American Library Association

The Blog

The latest news on and the WordPress community.

%d bloggers like this: