The American Bear

Sunshine/Lollipops

You will be hearing lots of convincing-sounding rhetoric on this topic in upcoming weeks –often from Democrats – including the notion that we should be means-testing Social Security for longevity among high-income earners. That plan plays into the mythology that the program is somehow broken and needs to be ‘fixed.’ It also plays into the game of fiscal conservatives who know full well that means testing will diminish support, which is why they have been ardently pushing it for 50 years. It’s yet another red herring. Social Security is not contributing to the deficit, and if — and that’s a big if — a tweak is needed down the road, we can easily accomplish that by raising the cap on payroll taxes, which stands just above $100K. In reality, there is absolutely no sound justification for doing anything now. The bottom line is that raising the retirement age and making changes based on longevity does not pass the test of morality, logic, or sound economics. Lynn Parramore, The Giant Lie Trotted Out by Fiscal Conservatives Trying to Shred Social Security

The Giant Lie Trotted Out by Fiscal Conservatives Trying to Shred Social Security | Lynn Parramore

Trying to convince the public to cut America’s best-loved and most successful program requires a lot of creativity and persistence. Social Security is fiscally fit, prudently managed and does not add to the deficit because by law it must be completely detached from the federal operating budget. Obviously, it is needed more than ever in a time of increasing job insecurity and disappearing pensions. It helps our economy thrive and boosts the productivity of working Americans. And yet the sharks are in a frenzy to shred it in the upcoming “fiscal cliff” discussions.

The most popular red herring Social Security hustlers have unleashed into the waters of public discourse has grown into such a massive whale of a lie that liberals frequently subscribe to it. The idea goes like this: We need to somehow “fix” Social Security because people are living longer – “fix” in this context being code for “cut.” Two groups stand to benefit in the short-term from such a scheme: the greedy rich, who do not want to pay their share in taxes, and financiers, who want to move towards privatizing retirement accounts so they can collect fees. As for the masses of hard-working people who have rightfully earned their retirement, the only “fix” is the fix they will be in if already modest benefits are further reduced.

Here are five clear reasons why the life expectancy argument is nonsensical, counterproductive and based on a pack of lies. [must read]

Thrown off the austerity cliff

amodernmanifesto:

THE WALL Street crowd that tried to foist Mitt Romney on working people is now pushing hard for a budget deal that targets Social Security and Medicare—and President Barack Obama is meeting them more than halfway.

Never mind that millions of people turned out in the election with the expressed wish of stopping Romney and the Republicans from carrying out these kinds of attacks. The cuts are coming anyway, ushered in by Obama—unless working people organize through their unions, communities and organizations to demand that the bankers and business executives who caused this crisis pay for it.

To be sure, the president met with labor leaders November 12 to assure them that he’s determined to hold the line on defense of so-called entitlements—programs that the overwhelming working people are eligible for as they age. Labor leaders emerged from the meeting saying that that president supported their calls to defend Social Security and Medicare.

But business had the last word—literally. The day after union officials cleared out of the White House, an all-star lineup of CEOs descended on Obama to push their plan for budget cuts intended to slash even more of what remains of the U.S. social safety net.

Duncan Niederauer, CEO of NYSE Euronext, the operator of the New York Stock Exchange, said that business wanted things done its way—or else. “We simply won’t be investing in the United States,” he told a reporter. “We will be investing elsewhere where we have more certainty of the outcome.”

OK. Leave. Go somewhere else, but you’ll miss out on this:
Corporate Profits Just Hit An All-Time High, Wages Just Hit An All-Time Low

Man, SS and Medicare are such a drag …

(via wozziebear)

Sunday Grand Bargain Alert! Woodward Leak--Obama-Boehner "Grand Bargain" Agreement | Corrente

[Hat Tip to Mr. Alexa for tipping me off to this leak.]

White House Grand Bargain offer to Speaker Boehner
Obtained by Bob Woodward Sun Nov 11, 2012 11:58 AM EST

Below are documents obtained by the Washington Post’s Bob Woodward that show a grand bargain proposal the White House was prepared to make in July 2011, in order to reach agreement with the House Republicans last year. This is how Woodward described the documents on Meet the Press this morning:

“This is a confidential document, last offer the president — the White House made last year to Speaker Boehner to try to reach this $4 trillion grand bargain. And it’s long and it’s tedious and it’s got budget jargon in it. But what it shows is a willingness to cut all kinds of things, like TRICARE, which is the sacred health insurance program for the military, for military retirees; to cut Social Security; to cut Medicare. And there are some lines in there about, “We want to get tax rates down, not only for individuals but for businesses. ”So Obama and the White House were willing to go quite far.”

Unfortunately, I am unable to “copy and paste” the actual document, only the notes by NBC regarding Woodward’s appearance on Meet the Press. Here’s the link to the NBC news release containing the Obama-Boehner proposed agreement.

This document specifically mentions enacting the least deep of the three recommended cuts—the change in the CPI-Index to the Superlative CPI, which lowers Social Security (and all transfer programs) Cost of Living Allowance (COLA).

But it also ominously agrees to a .07% reduction (including the Superlative CPI) as a percentage of taxable payroll, with a balanced package of tax and benefit “changes.” This is where one or both of the two deeper cuts could come into play—raising the retirement age to 69 (or 70), and/or “means testing,” the most draconian cut of all.

See also:
Against Means Testing by Peter Frase

America didn’t vote for a “grand bargain” | Rick Perlstein

[…] This reelection troubles me. It troubles me because of the signal it may send to some of the people running the Democratic Party, and to Barack Obama, a signal that may threaten the long-term health of the Democratic Party itself.

I heard Dick Durbin, the Illinois senator who is close to Obama, on the radio the next morning boasting that he was one of the Democrats on the Simpson-Bowles Commission to vote for its recommendations — recommendations that included, in addition to changes in the tax code meant to increase revenue (while also cutting tax rates), diminishing eligibility and benefits for Medicare and Social Security. Though the commission failed to reach consensus, making its proposals moot, it was aiming at just the sort of “grand bargain” that Obama has consistently and quietly spoken about as his sort of beau ideal for what a successful presidency would look like. Durbin went on to say he hoped a grand bargain might be wrapped up in the next calendar year, before congressmen and senators became preoccupied with reelection. And maybe it will. As the blogger Lambert Strether impishly put it on Election Day: “I’m betting the Ds, who wouldn’t abolish the filibuster for health care or the stimulus, will abolish it if that’s what it takes to kick the hippies and gut Social Security.”

… [L]et’s hope not. Please, please, please, let’s hope not. [READ]

Wall Street Urges Obama to Commit the Great Betrayal | Bill Black

One of the most important reasons that more Americans support the Democratic Party than the Republican Party is that the Democratic Party is viewed as the Party that created and guards the safety net. The elements of the safety net are the crown jewels of Democratic Party policy successes.

Only a Democrat can make it politically safe [think ‘Nixon-Goes-To-China’ but with parties reversed, ed.] for Republicans who hate the safety net to unravel it (a process that would occur over a number of years) by legitimizing the claim that the safety net must be cut. Obama may not intend to unravel the safety net. He may have been convinced by Wall Street that it is necessary to begin to unravel the safety net in order to save it. But the result would be to declare open season on the safety net by legitimizing the false Republican memes that the safety net is unsustainable and harms the nation. The Republican Party’s and Wall Street’s greatest frustration is that they have been unable to unravel or discredit the safety net. The Democratic Party has its Wall Street wing, but the Republican Party has been Wall Street’s principal representative for decades. The Republican Party has been unable to deliver Wall Street’s unholy grail – privatizing Social Security.

Wall Street salivates at the prospect of any privatization of social security. This would lead to them being able to charge tens of billions of dollars in fees annually and the banks that administered the privatized program would be systemically dangerous institutions (SDIs) because the consequences of allowing bank failures to cause tens of millions of Americans to lose their retirement savings would require either that all such deposits be federally insured or that the failing banks be bailed out by the federal government. Privatization, therefore, is a convenient fiction. The banks’ profits will be private; any catastrophic losses will be borne by the public. The SDIs’ already massive political power, often exerted through front groups like Third Way, will burgeon. [++]

The Great Betrayal – and the Cynicism of Calling it a Grand Bargain | Bill Black

[…] The Republican Party’s approach to convincing Obama to commit the Great Betrayal cleverly exploits three human weaknesses. First, Obama wants to be considered a “centrist.” Second, Obama yearns to be considered “bipartisan.” These first two weaknesses are forms of vanity. The siren song is “do this and you will become known as the President who acted as a statesman to cut across Party and ideological divides and make the hard choices essential to allowing America to continue to be a great nation – while ‘saving’ the safety net.”

The third weakness that the Republicans seek to exploit is fear – and the death of alternatives. The mantra of European austerity proponents is “there is no alternative.” The only choice is between austerity and collapse, and that means there is no real choice. The Republican strategy is to create a series of “moral panics.” As the name implies, this involves the creation of a special form of panic falsely premised on immorality. (Think: “Reefer Madness” or Professor Hill causing River City, Iowans to believe that the arrival of pool hall demonstrated the imminent moral collapse of their children.) The Great Betrayal can only occur if Obama succumbs to mindless (and innumerate) panic.

The Democratic wing of the Democratic Party has to lead the effort to save America from the Great Betrayal. It is essential to focus on the self-destructive nature of austerity. The irony is that a proponent of austerity has just handed us a coup. Becky Quick, co-host of one of CNBC’s business entertainment program, recently wrote a column intended to discredit Paul Krugman. Quick solicited a written statement from former President Bill Clinton to use in her attack on Krugman (who had criticized Quick and her co-host’s stream of “zombie facts” when he appeared on their program). Quick reveled in her success in obtaining ammunition from Clinton to attack Krugman, asserting that it constituted a “damning retort to Krugman” and proved the need to adopt austerity. In fact, Clinton’s statement voiced his agreement with Krugman:

[I]t’s important not to impose austerity now before a growth trend is clearly established, because as the austerity policies in the eurozone and the U.S. show, that will slow the economy, cut jobs, and increase deficits….

Clinton is a leader within the Rubin-wing of the Democratic Party that has been seeking to create the moral panic, but even he admits that “austerity now” “will slow the economy, cut jobs, and increase deficits.” The Great Betrayal of the safety net will begin if Obama is able to deliver the “grand bargain” imposing austerity that would “slow the economy, cut jobs, and increase deficits” and unravel the safety nets – the four horsemen of the economic apocalypse.

Obama is telling the media that the Great Betrayal is his first, and overarching, priority should he be re-elected. We are forewarned and we must act now to make clear that we will block the Great Betrayal and crush at the polls any member of Congress who supports it.

Do not concede the phrase “grand bargain” to the proponents of the betrayal. We should heed Camus’ warning that it is essential to call a plague by its real name if one is to resist it – and it is essential to resist the pestilence. “[W]hen you see the suffering and pain that it brings, you have to be mad, blind or a coward to resign yourself to the plague.” We must refuse to resign ourselves to being betrayed by Democratic leaders. Our actions must make it clear that we are not mad, blind, or cowards. We refuse to fall for their faux moral panics. It is our leaders who are all too often mad, blind, and cowards.

Against Means Testing | Peter Frase

[…] [M]eans testing of public benefits is little more than a trap set for progressives by those whose ultimate goal is the total destruction of these programs. Universal social rights are politically defensible, while particularist benefits are not. This lesson is, I think, supported by the work of Political Scientist Paul Pierson; as Joshua Tucker explains at the Monkey Cage, Pierson “explained how difficult it would be for governments to consolidate or retrench existing social policy programs, because these policies (pensions being the best example) create their own support coalition that reaches far beyond the left-wing electorate.”

There is, however, an additional reason to support universalistic rather than targeted public programs, and this is a matter of principle rather than politics. The problem with means-tested benefits is not only that they are politically untenable, but that they inevitably put the state in the business of judging the worth and deservingness of applicants–and thus, by extension, judging the way in which they lead their lives. If, for example, welfare benefits are made contingent on performing work of some kind, then the state must decide what counts as a legitimate form of work. Does, for example, a mother’s time spent raising a child count? Does getting a college education count? If it does, are all majors equally acceptable?

The fact that the state must adjudicate these issues–and must do so continually over time, since a person’s status is constantly subject to change–means that benefit recipients are constantly subject to arbitrary bureaucratic domination. Universal benefits, on the other hand, require relatively little meddling in people’s lives: in a country with universal health care, the only consideration for the state is whether or not you are a citizen. One should not, of course, understate the extremely fraught and contentious politics of citizenship itself, which may turn out to be the Achilles’ heel of social democracy in the 21st century. Nevertheless, I regard it as a major step forward if we are arguing over who has the rights of citizenship rather than attempting to judge what makes a person deserving of some particular benefit.  I think that ultimately, means tested benefits tend to make the poor less free and less autonomous than the affluent. This is precisely the opposite of the goal we should be aiming at in thinking about the welfare state, which should be about enhancing human freedom and facilitating human flourishing.

This line of argument is, in a certain sense, in sympathy with critiques of the welfare state that have been offered from libertarian, anarchist, and Foucauldian perspectives. Unfortunately, discussion of these arguments tends to become bogged down in a narrow debate over whether one is “for” or “against” the welfare state. By now, however, we should all understand that there is not one welfare state but many, and that different institutional configurations can have very different implications for people’s lives. Thus my goal as a writer and researcher is to promote a vision of the welfare state that enables individual autonomy and freedom by guaranteeing a basic standard of living as a human right, while simutaneously critiquing the idea that public benefits are special supports provided only to the deserving poor, and only in those instances where the private capitalist marketplace has “failed”. [++]

What Paul Ryan Has and Obama Wants | David Swanson

[Read] this from the New York Times: “The news media have played a crucial role in Mr. Obama’s career, helping to make him a national star not long after he had been an anonymous state legislator. As president, however, he has come to believe the news media have had a role in frustrating his ambitions to change the terms of the country’s political discussion. He particularly believes that Democrats do not receive enough credit for their willingness to accept cuts in Medicare and Social Security, while Republicans oppose almost any tax increase to reduce the deficit.”

So Obama too is willing to take the political risk of cutting the popular programs called Medicare and Social Security. In fact, what Obama wants is not to protect these programs from cuts, but rather to receive appropriate credit from the media corporations for his willingness to cut them. This, we are about to be told endlessly, is in stark contrast to Romney-Ryan’s willingness to cut Medicare and Social Security. But the biggest contrast seems to be that the media gives Romney and Ryan the credit that Obama covets.

Oh no, Obama supporters will reply, there’s a big difference. Romney wants to cut these programs, while Obama is willing to cut them. Romney is evil, while Obama is noble and gracious in his appeasing of evil. I’m sorry, but won’t the catfood that grandma lives on taste as bitter regardless of whether her income was removed maliciously or accommodatingly?

[While] government generally turns a blind eye to the tens of billions of dollars in exorbitant interest that businesses charge the poor, it is notably chary with public benefits for the poor. Temporary Assistance to Needy Families, for example, our sole remaining nationwide welfare program, gets only $26 billion a year in state and federal funds. The impression is left of a public sector that’s gone totally schizoid: on the one hand, offering safety-net programs for the poor; on the other, enabling large-scale private sector theft from the very people it is supposedly trying to help. Barbara Ehrenreich, Looting the Lives of the Poor

230,000 Unemployed Will Lose Benefits This Weekend | David Dayen

The deal to extend the payroll tax cut through the end of the year included a deal to “extend” unemployment benefits. I put “extend” in sarcasm quotes because the bill actually reduced that extension gradually. Instead of 99 weeks of unemployment to jobless workers in hard-hit states, the bill gradually backed that off to 79 weeks or less. This hurt the most vulnerable population in the labor force, the long-term unemployed, sadly a fast-growing sector even during this modest recovery.

Evidence of this comes this week, as eight states will see jobless benefits cut:

More than 230,000 jobless Americans will lose their unemployment insurance by this weekend as reductions in the federal program that provides extended benefits to the long-term unemployed take broader effect.

The new round of reductions is hitting eight states this month, meaning that about 400,000 long-term unemployed Americans in 27 states will have been cut off of the federal government’s extended unemployment benefits program this year, according to an analysis by the National Employment Law Project, which advocates for the unemployed […]

Most states provide 26 weeks of benefits, and the federal government provides the rest, partially through a complicated formula that requires jobless rates to be both high and increasing to reach the benefit limit.

But the nation’s jobless rate has been steadily declining — from 9.1 percent in August, to 8.1 percent last month — causing the maximum benefit period to contract in most states. The extended benefits were reauthorized in February, but efforts by some Democratic lawmakers to adjust the formula in a way that would have kept the 99-week limit intact were unsuccessful.

The states are California, Texas, Pennsylvania, Florida, Illinois, North Carolina, Colorado and Connecticut. It’s based on the “look-back” in the bill. Jobless rates in these states are now below what they were three years ago, though in some cases above where they were four years ago. But Congress did not extend the look-back to take this into account. As a result, hundreds of thousands will lose benefits.

Not only is this a tragedy for the long-term unemployed in these states, it’s a legitimate hit to the economy. Unemployment benefits are among the best stimulative programs we have, with one of the highest economic multipliers. Taking these benefits away means perhaps billions of dollars in economic activity going away.

The point is not to extend 99 weeks or more of unemployment benefits forever, but it’s to recognize that the recovery has not arrived for a significant subset of unemployed Americans, and that now is not the time to leave them behind.

House GOP pits Pentagon vs. poor | Steve Benen

Even by the standards of House Republicans, this was a rather extraordinary vote.

The House voted Thursday to override steep cuts to the Pentagon’s budget mandated by last summer’s debt deal and replace them with spending reductions to food stamps and other mandatory social programs.

While doomed in the Senate and opposed by the White House, the legislation, which would reduce the deficit by $243 billion, is a Republican marker for post-election budget talks with the White House.

Zero Democrats voted for the bill, and the proposal went too far for 16 House Republicans, who broke ranks and voted with Dems.

[…]

House Republicans proposed major cuts to the Defense budget as part of the debt-ceiling fiasco from last summer. They didn’t want the cuts, but they proposed the military reductions as a way to create an incentive for themselves to reach a bipartisan debt-reduction deal. But then GOP policymakers ran into a different problem: they didn’t want a bipartisan debt-reduction deal and they didn’t want their own proposed punishment.

Which leads us to this new proposal. To offset the Pentagon cuts Republicans proposed by no longer support, the House GOP voted to find all of the savings by taking from programs that benefit struggling workers and families. Today’s measure is nothing short of brutal, slashing food stamps, nearly eliminating job-training programs, eliminating health care subsidies, slashing the child tax credit, and taking school meals from 200,000 low-income children.

And all of this would come on top of the spending cuts Democrats already agreed to as part of the same debt-ceiling deal.

Congress Returns to Cut Safety Net Spending to Save Defense Contractors | David Dayen

[What does Congress] have planned for the next few days?

Well, in the House, Republicans will try to pass a part of their budget that would substitute cuts for the poor for planned cuts to the military. That certainly sounds like the first order of government – first, do no harm to defense contractors, and be sure to comfort the afflicted with the knowledge that we have more guns and bombs than the rest of the world, rather than actual, you know, comfort.

Republican leaders are planning to bring up a $260 billion measure to slash the budget gap and replace across-the-board spending cuts set to take effect in 2013.

The bill, known as a “reconciliation” proposal, is the product of six House committees and will be combined into one piece of legislation by the House Budget Committee. Democrats have already panned it as an extension of the House GOP proposal that “reflects the wrong priorities” by protecting tax cuts for the wealthy and cutting programs for the poor […]

Principally, the GOP measure would replace $78 billion in sequestered cuts resulting from the failure of the congressional “supercommittee” to strike a bipartisan deficit deal last fall. Both Republican leaders and the Pentagon have warned against what they say are arbitrary cuts to defense spending.

In addition to the $78 billion in sequester replacement, the bill contains an additional $180 billion in cuts aimed at reducing the deficit. Among the federal programs hit are food stamps, funding for the 2010 healthcare and financial regulatory laws and the refundable child tax credit.

Wow, the child tax credit? I didn’t even see that one coming. “Pro-family” legislators have promoted the child tax credit for years as a way to encourage traditional marriage. But defense contractors need their blow-shit-up money, so that’s done, surely with some rejoinder that poor people are having babies for the tax credit (because babies cost no money to raise these days).

The reconciliation bill is a vehicle for any replacement of the trigger cuts down the road, probably in the lame duck session. So far, House Republicans will only reach a goal of generating headlines that make them look like cruel slaves to industry. I’m not sure what else they get out of it. [++]

Ending Dependency As We Know It: How Bill Clinton Decreased Freedom | Corey Robin

When Bill Clinton signed welfare reform into law in 1996, many hailed it as a necessary step toward ending the dependency of the poor.  Dependence on the state, that is.  Barack Obama praised the bill during his presidential campaign, and in fact made a point of noting that he had helped cut the welfare rolls when he was in the Illinois state legislature.  Rick Santorum has said it gives the poor “something dependency doesn’t give: hope.”

But as Jason DeParle points out in this must-read piece, thanks to welfare reform and the terrible state of the economy, poor people are doing worse today than they have in years.  Even in this recession, states like Arizona continue to cut the welfare rolls.  So what do poor people do now that they can’t turn to the state?

The poor people who were dropped from cash assistance here, mostly single mothers, talk with surprising openness about the desperate, and sometimes illegal, ways they make ends meet. They have sold food stamps, sold blood, skipped meals, shoplifted, doubled up with friends, scavenged trash bins for bottles and cans and returned to relationships with violent partners — all with children in tow.

Esmeralda Murillo, a 21-year-old mother of two, lost her welfare check, landed in a shelter and then returned to a boyfriend whose violent temper had driven her away. “You don’t know who to turn to,” she said.

The economic effects of welfare reform are obvious and catastrophic.  But welfare reform has also decreased freedom.  That lost government support doesn’t just increase poverty. It actually drives vulnerable people—almost always women—back into the repressive hold of coercive forms of power: in this case, the coercive power of abusive husbands and boyfriends. Welfare reform doesn’t decrease dependency; it increases coercion.

[…]

[When] we talk about ending the dependency of the poor, let’s be clear what we’re talking about.  We’re not talking about emancipating the poor or any such thing.  We’re talking about returning them to the repressive hold of their private governors.[++]