On Contradiction, Or, Will Obama Lose An Argument With Himself?

by: fake consultant

Sun Jan 16, 2011 at 17:20

(A preview of coming attractions.  Quite a bit more about Social Security to come between now & the State of the Union - promoted by Paul Rosenberg)

There have been many unlikely things that have happened this past month or so: some of them appearing as legislation, some of them appearing in the form of Republicans who set new records for running away from the words they used to get elected-and some of them appearing in the markets, where, believe it or not, many Europeans finds themselves wishing for our economic situation right about now.

There are even improbable sports stories: our frequently hapless Seattle Seahawks, the only team to ever make the NFL Playoffs with a losing record, are today preparing to knock the Chicago Bears out of their bid to play in the Super Bowl, having crushed the defending holders of the Lombardi Trophy just last week before the 12th Man in Seattle.

But as improbable as all that is, the one thing I never thought I would see is Barack Obama getting into a political argument with himself over Social Security-and then losing the argument.

Even more improbably, it looks like there's just about a week left for him to come to a decision...and it looks like you're going to have to help him make up his mind.

fake consultant :: On Contradiction, Or, Will Obama Lose An Argument With Himself?
"He who was prepared to help the escaping murderer or to embrace the impenitent thief, found, to the overthrow of all his logic, that he objected to the use of dynamite"

--From "The Dynamiter", by Robert Louis Stevenson and Fanny Van De Grift Stevenson

So we'll keep this all just between you and me, but I've been hearing a few things this past week, and I figured we'd start by filling you in on the inside dirt:

The State of the Union address is coming up fast (January 25th, in fact); obviously Social Security could become a hot topic during the speech. If it does, here's what's potentially going to occur:

--The President will announce a spirited defense of the program, and tell the world that he will not support any cuts in your benefits, and that we'll clear up the funding issues by raising the cap on the payroll tax.

--He'll announce that he has decided to support cutting your benefits by backing proposals that would again raise the retirement age and would cause the annual cost-of-living adjustment (COLA) to go up by less than the actual cost of living...which is just another way of sneaking in a cut to your eventual benefits.

I'm told that option number one is the least likely of the two...which is something you might not expect-especially if you were paying attention to what Obama was saying about Social Security when he was out looking for our votes in 2007 and 2008.

Here's a good example: in November of 2007 he appeared on "Meet the Press"

"...and when you look at, how we should approach Social Security, I believe, that, uh, cutting retire--, uh, cutting benefits, is not the right answer...I meet too many seniors all across the country who are struggling with the limited Social Security benefits that they have...that raising the retirement age is not the best option, particularly when we've got people who ware [sic] still in manufacturing..."

There's more: Candidate Obama wrote an op-ed piece ("Fixed-income seniors can expect a tax cut") in September of 2007 for the Quad City Times that was designed to influence the way Iowa voters thought about his chances of being President one day. Here's what he had to say then:

"Second, I do not want to cut benefits or raise the retirement age. I believe there are a number of ways we can make Social Security solvent that do not involve placing these added burdens on our seniors. One possible option, for example, is to raise the cap on the amount of income subject to the Social Security tax. If we kept the payroll tax rate exactly the same but applied it to all earnings and not just the first $97,500, we could virtually eliminate the entire Social Security shortfall."

This is what he told the American Association of Retired Persons (AARP) on the occasion of the group's 50th anniversary, just about two months before the '08 election:

"...but John McCain's campaign has gone even further, suggesting that the best answer for the growing pressures on Social Security might be to cut...cost of living adjustments or raise the retirement age. Now let me be clear: I will not do either.

...I think that's why the best way forward is to first look to adjust the cap on the payroll tax. 97% of Americans will see absolutely no change in their taxes under my proposal. 97%. What it does allow us to do is to extend the life of Social Security without cutting benefits or raising the retirement age."

Naturally, if you looked at all this and said: "Well, what's the big deal, exactly?" you'd be making a reasonable point...but the problem, from what "background" conversations are suggesting, is that there is an effort afoot to get the President to agree to these cuts as part of a "Grand Bargain" that might include an extension of the debt ceiling, which is going to have to be voted on before March, and possibly other elements of dealmaking as well.  

And naturally, if you watched how the President negotiated issues like the "public option" and the tax cuts last December...well, a reasonable person might worry that the same kind of deal is about to be made right now.

To make things worse, there are stories afoot that suggest this President is looking to cement a legacy here-and a legacy that consists of "I rescued Social Security" would be a fine narrative for the '12 campaign...as long as the "rescue" isn't accomplished on the backs of those who can afford cuts the least.

"But what I'm going to continue to insist on is that the reason we need to fix it now is precisely to protect our senior citizens and maintain not only Social Security as a social insurance program, but also make sure that the benefits are sufficient so that we don't have seniors in need."

--Barack Obama, on "Meet the Press", November 11, 2007

So what's to be done?

As you can imagine, this is the time to start flooding the White House switchboard (202 456 1212) to let them know that you want the President to listen to his own best arguments and stick with raising the payroll tax cap.

This is also the time to get your Members of Congress and Senators on the phone-and whether they're Republicans or Democrats, it's not going to be hard to remind them that if they screw this one up...they're going to make permanent enemies out of...millions of registered voters.

So get to it.

We have about a week-and if you want to save your own Social Security future...you better get up and make it happen.  

best single fix for social security?
raise retirement age
"means testing"
raise income tax cap
reduce cost-of-living increases
move to private accounts


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the politics favor our side... (4.00 / 1)
...but we have to apply the pressure now...

Thanks for this nice compilation (4.00 / 3)
of Obama's campaign promises on Social Security. Now is the time for us to put strong pressure on the Obama administration to not mess with SS benefits and to do what Obama promised and raise the SS tax cap. The tax cap would fix SS forever and is extremely popular. To get it, all we need is strong leadership from President Obama. But from all I've heard, Obama will be trying to lead the opposite direction. So we'll have to lead and force him to follow us.

If the people lead, the leaders will follow. (Check out Ben Harper's song lyrics)

i think you have it exactly right: (0.00 / 0)
we have to create a situation where obama cannot afford to be on the wrong side of this--and i would suggest that there's about a week to really make the point.

and then, in the runup to the debt ceiling negotiations, i expect we'll be having this fight again.

in fact, i expect a big part of the story of the 112th congress is that this sort of fight will have to happen, several times, on several different issues we care about.

[ Parent ]
As An Aside (4.00 / 1)
That was serious balls, publicly predicting that the 'Hawks would route the Chicago Bears.

I wish it were true.

hey... (0.00 / 0)
...we may not be in a situation like that again for some time--and if there's one thing we know from living in a place where it rains 225 days a year...it's that you better get out in the sun when it shines.  

[ Parent ]
Any of those "fixes" cedes the argument (4.00 / 2)
to anti-social security forces.  I don't intend to call the White House demanding that they dig a small passageway through the barricades as opposed to burning them down. Even if raising the cap is a reasonable thing to do in another time and place, in this time and place we need to reject the idea that entitlements are the cause of our financial problems.

Or did I miss a joke? (4.00 / 1)
I'm beginning to think yes.

[ Parent ]
Or rather, a warning. Duh. (4.00 / 1)

[ Parent ]
so here's the thing: (0.00 / 0)
it is indeed true that there is money available to pay 100% of benefits through 2037, and that we do not have to make any fix today, or for, potentially, a decade or more, if we don't want to.

but that said, it appears that the politics here may not follow the path of "we don't have to...", and the effort is on, right now, to bump the retirement age and "disconnect the cola".

so doing nothing is not the most likely outcome...and it's a tough political sell as well, to be frank...but it is possible to make a very good case that raising the tax cap makes a whole lot more sense than adjusting retirement ages and making it harder for older folks to keep up with the cost of living, just to save a tax break for rich folks.

when you put all that together, it seems to add up to something like: "i think we are going to be forced into this fight--but we're in a position to win, if we tell our story well".

[ Parent ]
Uh huh. So we ignore that story and tell another one (4.00 / 1)
loudly enough to drown out Dem social security concern trolls.  The one about how regulatory capture, regressive taxation, capital-friendly trade agreements, privatization of public services, war, etc. are responsible for the ill-health of the nation. Well, if anything will force Democrats onto the offensive, I guess social security is it. I hope.

[ Parent ]
i have never been able to figure out... (4.00 / 1)
...why so few democrats "get" the potential of fighting for something, and how being seen as someone who is out there fighting for voters creates political capital.

as long as i can remember (well, since '68, anyway), the history of "professional" democrats has been some insurgency toppling an ossified establishment "party management organ" (the dccc is an example), only to immediately become the very thing they fought to change--and without trying to personalize things too much, every time i see donna brazile out somewhere "surrogate" speaking for the obama administration i want to slap my forehead and go "why why why why why?".

you and me, if we lost a bunch of elections in a row, we might ask, "what should we change?"--but i live in seattle, and we lived through about 15 years of the horrible product that was the supersonics...and the parallel here is that i think both groups represented an attitude that you could sum up by saying: "hey...we're the only game in town--so deal with it".

of course, that can only work for so long, which seems to explain the insurgencies--and the fact the the 'sonics are now in the nba version of the witness protection program, living in oklahoma city, under an assumed name.

[ Parent ]
Real causes (4.00 / 3)
1.  The Bush tax cuts (average cost = $400 billion per year)
2.  The wars in Iraq and Afghanistan and bloated military spending (perhaps $200-$300 billion per year)
3.  The rotten economy
4.  Low tax rates on the wealthy and corporations compared to the higher growth past.
5.  Cut backs on IRS enforcement and audits of corporations and the super wealthy due to Republican insistence.
6. Medicare (and not "waste" and "fraud")
7.  $3 Trillion bailouts of banks and Wall Street while letting Main Street perish on the vine.
8.  The Fed has, for a very long time, ignored one of its two mandates "full employment."

The deficit commission should never have been formed.  It should never have been stacked with middle-class cutters and pro-corporates.  The Democrats should have been anti Bush tax cut and anti military not looking to end the home mortgage deduction and permanently ruin Social Security.  The blame lies squarely on the back of Barack Hoover Obama.

[ Parent ]
just for the record... (4.00 / 1)
...let's disconnect debt and deficit and social security for a moment...which is something the debt commission should have done.

(i can't speak to whether that was something they did on their own or "under orders", and there is a seperate issue related to "stacking the deck"...but for now, i'll leave that to the realm of things about which i can only speculate.)

as i see it you are correct to note how we went from surplus and paying down debt to deficit and growing debt...but the "gap" in social security funding has a different cause:

in the 1990s, we were taxing about 92% of wages for social security purposes, and today that number is about 83%.

the reason this is occurring is because more and more taxable income is being concentrated in fewer hands--and as those folks accumulate income above the tax cap, the proportion of exempt income grows.

removing the tax cap is intended to get at this math issue--and it does. if you limit benefits at an inflation-adjusted $2500 or so (2010 dollars--and that's about what the top benefit is today) and remove the tax cap, you get to 115% of what you need to get solvent through 2084.

that means you can lower the payroll tax rate by .3% (from 12.6% to 12.3% for all employees and employers) and still remain 100% solvent.  

as i noted above, there is no immediate need to make this change, although it won't hurt to do it now...but timing is not something we're going to be able to choose, as the fight is already on for the folks on the other side; at this point we may be looking at more of a rescue mission than the beginning of a reasoned policy discussion, i'm afraid.

[ Parent ]
What about eliminating the cap? (4.00 / 2)
I like that option even better than raising the income cap on SS taxes. Let's eliminate the cap altogether.

More liberal media at The Sideshow

i'm all for removing the cap... (0.00 / 0)
...but there is a politics issue here for the obama administration: during the '08 campaign, he promised not to raise taxes on those earning less than $250,000, and it appears that he's trying not to say or do anything that would put that promise in jeopardy.

[ Parent ]
So, this was an argument made by CAF's Richard Eskow, (0.00 / 0)
who is a good guy, but I can't agree with him.

i didn't exactly understand... (0.00 / 0)
...where you were going with this comment, and i wonder if you could fill me in just a bit more as to which argument of his you were referencing?

[ Parent ]
Sorry, this post of Eskow's paralleled the argument made in your post. (4.00 / 1)
I generally admire his writing and was dismayed to see him adding to the perception that something had to be done about social security NOW. If Obama can be pressured by the general public at all, "don't touch social security" is a more effective message than "okay, fix it, but this way, not that way." It was easier to keep people from wading into this thicket while Bush was in office.

Before He Cuts Social Security, I Hope the President Listens To This "Obama" Guy
By Richard (RJ) Eskow
The Candidate was right: We can protect Social Security benefits - which are too low, if anything - and fix future financial problems (scheduled to occur in 2037) by raising the cap. That would be smart policy and smart politics. It would also send the message that Candidate Obama and President Obama are one and the same person - a person who keeps his promises.


[ Parent ]
i just saw the post myself... (0.00 / 0)
...and although i can't confirm it, based on the path taken by his story i would assume he was taking part in the same conference call that i was last thursday--and in fact, there's a caf/greenberg poll that was released today that i'm going to walk through next that assesses the politics more deeply than we did in this story.

[ Parent ]
i should add to this: (0.00 / 0)
if my understanding is correct, obama sees "fixing" social security as a legacy accomplishment that would set him up for '12 in a very powerful way.

if that's true, and the rs are also pushing for a "fix", then whether it should or shouldn't be done now may be a moot point (although, as i've said before, removing the payroll tax income cap now would be fine by me, as it does no significant actuarial or economic harm; in fact, it's actuarially favorable to make that change now).

and if that's true, then i'm here to suggest that we have to have a presence in the debate.

i do not think "do nothing now, and fix it later" is going to be an argument that wins in this environment...and if that's true, then i would suggest we need to make the argument for removing the income cap, as it is a far better "sell" then what the administration and house might want to do without the application of outside pressure.

[ Parent ]

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