In debt talks, Obama offers Social Security cuts

President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue.

At a meeting with top House and Senate leaders set for Thursday morning, Obama plans to argue that a rare consensus has emerged about the size and scope of the nation’s budget problems and that policymakers should seize the moment to take dramatic action.

As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.

”œObviously, there will be some Democrats who don’t believe we need to do entitlement reform. But there seems to be some hunger to do something of some significance,” said a Democratic official familiar with the administration’s thinking. ”œThese moments come along at most once a decade. And it would be a real mistake if we let it pass us by.”


President Looks for Broader Deal on Deficit Cuts

New York Times, By Carl Hulse & Mark Landler, July 6

WASHINGTON ”” Heading into a crucial negotiating session on a budget deal on Thursday, President Obama has raised his sights and wants to strike a far-reaching agreement on cutting the federal deficit as Speaker John A. Boehner has signaled new willingness to bargain on revenues.

Mr. Obama, who is to meet at the White House with the bipartisan leadership of Congress in an effort to work out an agreement to raise the federal debt limit, wants to move well beyond the $2 trillion in savings sought in earlier negotiations and seek perhaps twice as much over the next decade, Democratic officials briefed on the negotiations said Wednesday.

The president’s renewed efforts follow what knowledgeable officials said was an overture from Mr. Boehner, who met secretly with Mr. Obama last weekend, to consider as much as $1 trillion in unspecified new revenues as part of an overhaul of tax laws in exchange for an agreement that made substantial spending cuts, including in such social programs as Medicare and Medicaid and Social Security ”” programs that had been off the table.

[...]

Aides to Mr. Boehner said that no tax increases were on the table and that he had not agreed to the expiration of any tax cuts.

26 comments to In debt talks, Obama offers Social Security cuts

  • yogi-one

    How does Goldman Sachs make money off this? Without knowing where they come inside this “bargain” it’s hard to say what it is, actually.

    And how does it screw the middle class and channel more money to the top 1/2 percenters?

    These are the kinds of questions that should be asked.

    Didn’t see these questions on the presidential tweeters tonight…wondering how come?

  • Romberry

    Earlier, in response to this news, this is part of what I posted on another blog:

    Social Security is self funding and paid up to the tune of trillions of dollars for decades in advance. Any cuts to benefits are tantamount to theft.

    In 2008 on multiple blogs and on (the now defunct) Table Talk at Salon, I absolutely predicted that Obama would do these kinds of things if he became president. His intentions were there to see, right out in the open for anyone who parsed his words carefully.* The way I put it then was “It took Nixon to go to China. It will take a Democrat to cut Social Security. Obama is that Democrat.” With the benefit of hindsight, I’d edit that to add “And Obama is the Democrat who will make the Bush agenda bipartisan consensus.”

    The man is a disaster for the Democratic Party. Worse, he is a disaster for America. But for Republicans? He’s a godsend.

    Even though he is no liberal, Barack Obama has succeeded in discrediting liberalism…even as he seeks to continue tearing down what is left of the New Deal.

    [snip]

    Obama must go. And Democrats must be the ones to take him down. The future of the Democratic Party and liberalism depends on it. Failure to remove this president from office is not an option. Disapproval must be such that he declines to even run. We must replace the head of the party with an actual Democrat. We must.

    *For the sin of parsing Obama’s words carefully, I was labeled everything from PUMA to racist. It was an astounding example of the madness of frenzied crowds.

    That post contains my bottom line: Obama must go. And Democrats must be the ones to take him down. The future of the Democratic Party and liberalism depends on it. Failure to remove this president from office is not an option.

  • creativelcro

    Sigh… I want my money back.

  • creativelcro

    “wants to cut up to $4 trillion in a decade a move that would mean putting Social Security and Medicare on the table”
    $4 trillion? Isn’t that the cost of the bogus wars?

  • JustPlainDave

    …synonym for “buyer’s remorse”.

    “For the most part, when people discuss international law they are using it as a tool in a broader policy debate…. Very few people, it turns out, care about international law for its own sake.” ~ David Bosco

  • Bolo

    that will be withdrawn by the government from our pockets. At the level of the national economy, a spending cut is the same as a tax increase from a monetary flow perspective. Whether our money is taxed away or cut away, the government is telling us that it is the only, monopolistic source of money and that it is withholding its money from the rest of us.

    That is $4 trillion that we won’t have access to over the next decade or so. Assuming a US population of 310,000,000, that amounts to $12,000 per person, or $1200 per person per year. I didn’t factor inflation or pop. growth into that, plus I’m sure that the distribution of that money would be rather lopsided across the population, but…

    It would be amazing if the media actually portrayed these cuts as a $1200 tax per person per year for the next decade.

    Edit: Corrected my math.

  • jawbone2

    But, in all honesty, I might have voted for him had I lived in at state where the election might have gone to McCain. I had the luxury of not voting for him.

    Altho’ during the general election I predicted that Dems would be unable to fight aginst Obama’s conservative actions and if McCain were president they would stick to their principles and fight for the people.

    (You might ask, “What principles,” since we have not seen them have much effect on DC Dems since Obama was elected…. What a horror show this president has turned out to be. He wants to destroy the social safety nets, and he will destory the Dem Party in doing so. But, then, that’s what we get with a stealth Republican running as a Dem, and for president at that!)

  • jawbone2

    65/62 and over demographic, that will be a disproportionate cut in income for the elderly. A huge percentage of those people already spend every penny thay have coming in, as for many they have mostly –or ONLY– SocSec. It will mean people losing their homes, either houses they can no longer afford to pay taxes on or apartments. Housing prices will continue to go down, as more come on the market; so, even when they sell out, they will get less than expected as of right now.

    This will mean even less money available for seniors to purchase food. They’ll be buying cheaper, possibly less nutritious types of food. They’ll probably have to give up buying vitamin supplements,as Medicare RX doesn’t cover that. I imagine there will be effects I haven’t thought of yet. Oh, yeah, heat. Gas. Other transportation.

    This will be a big hit to the economy, but, I guess Obama figures with less health care seniors will die off earlier and faster, and that will also cut the need for Medicare expenditures and SocSec outlays. Hey, it’s a Plan!

    My, what a view for an ostensible Democrat to hold! But I always figured he didn’t really think of himself as a Democrat; he ran under that banner because as a black man that was how to get elected in Chicago and then Illinois, and for sure how to be elected president. A flag of convenience, were he a ship.

    Damn, a Dem who believes in Cheap Labor and Hurry Up and Die! Sounds like a Republican to me. And, just like a Republican, Obama will probably go with the COLA “adjustment,” since he probably does believe seniors get too much already, and they need to get a “haircut” on those cost of living increases. And it’s sneaky enough, he can lie about it to the voters.

    Note that Obama’s doing this just in time for the Baby Boomers to start receivng SocSec and Medicare. Since the O’Neill/St. Ronnie “Grand Bargain,” everyone has been paying forward on their SocSec, to ensure there was enough money to cover the bulge. Now, these Baby Boomer payers are going to get cuts to their payments. For those close to or now on SocSec, it means they’ve also probably lost in savings due to the banksters playing around with Credit Default financial gambling. Or have used savings to live on since they were downsized or forced into early retirement…. Nice, huh?

    We wuz robbed — of the opportunity to have a Democrastic president during a period of severe economic turmoil. Of the chance to remedy some of the most egregious wrongs with out financial system. Of a chance for single payer health CARE.

    We wuz robbed. Ah, maybe that’s part of living in an Oligarchic Kleptocracy.

    As Buffett said, there is class warfare and his class has won. Big time, as Cheney might say.

  • HongPong

    Bad news, accurate and early. Just one reason i love this site :)

    Hongpong.com

  • Tina

    feminazi extraordinare :D

  • JustPlainDave

    …and fresh. Now that it’s not, well, an awful lot more folks unhappy about it now than were. Hence: buyer’s remorse.

    “Posit: A key challenge for the international security system is keeping the American populace from allowing their government to slam handy countries up against the wall in response to terror attacks in the homeland. ~ me”

  • jawbone2

    For email, this is the WH contact page:
    http://www.whitehouse.gov/contact

    I just sent an email to:
    president@wh.gov

    No rejection as of yet. I like having a record of my fruitless attempts to affect the actions of our presidents. I had a long and unsuccessful email interaction with Bush and the computerized replies, since lost to a deal, unbacked up PC. Maybe historians will read them some day. Of course, Bush did a lot of deleting….

  • Tina

    happy they came around, however it didn’t seem to make anyone think a little harder about bombing other countries.

  • JustPlainDave

    My view, it’s a lot less an issue of folks “coming around” than it is finding out things are more expensive than they thought they were. This would be consistent with why they don’t think particularly hard about dropping ordnance on people – it’s cheap and risk free.

    Me, I think that maneuvering oneself into a situation where military options are one has in the instruments of national power cupboard isn’t particularly smart. That said, I have little patience for much of the most vocal critique, which seems to consist mainly of an aversion to the military options with an unwillingness to do the work of building the other options – essentially saying that there should be nothing in that cupboard.

    “The fact that every young American student of Arabic and Persian that I’ve met in the last three or four years has intended to go into the intelligence or military spheres speaks volumes. (Or maybe I don’t get out enough…)” ~ me

  • JustPlainDave

    …aimed at, or tomorrow’s? Call me crazy, but I think it’s the latter – and that also explains the heat and immediacy of the opposition. (The righteousness of the issue looks a little different when looked at from the perspective of a generation that never expected to receive the good deals received by those who preceded us.)

    “For the most part, when people discuss international law they are using it as a tool in a broader policy debate…. Very few people, it turns out, care about international law for its own sake.” ~ David Bosco

  • Bolo

    $400,000,000,000 per year is a lot of money. It will be missed by a lot of people.

    But some arbitrary debt ceiling is apparently more important than people’s lives to the ruling classes. God forbid some number indicative of total US spending in excess of taxes reach some arbitrary threshold or another! Let’s take medical care away from the elderly and food away from the poor to try and bring that number down!

  • OregonJohn

    I called, took about two minutes on hold but I got someone to share my comment with. I told them I didn’t want the President to cut social security to pay for wars.

  • jawbone2

    living increases; all receiving it in the future will start out at a lower base rate.

    There was no reason for SocSec to “not be there” for future generations, except Repub desires to destroy SocSec. And now Obama is here to do it for them and put the blame on the Dems.

    Smart move, reactionaries.

  • jawbone2

    Obama can propose and implement nationwide Soylent Green factories.

    It probably has to be a government program due to the possibility of lawsuits against private entrepreneurs (You did what to my depressed kid?), so it’s a JOBS program while also providing low cost PROTEIN for the masses and the elderly poor. With the cuts, a low cost food source will be absolutely necessary. Same for the having that huge pool of unemployed serving as the reserve employee pool.

    Now is surely the time for such an endeavor. If not now, when? We must bring down the debt and bring down the number of people needing government assistance.

    Hey, win-win-win: Jobs, food, and a way for the poor to sacrifice themselves to the greater good.

    Orin Hatch* did say on the floor of the Senate that the poor need to sacrifice more, so, given they don’t have much money, why not let them, indeed urge them, to sacrifice themselves entirely? Body and soul? Hearts and minds?

    And there’s more! Burial costs are avoided and cemeteries won’t fill up as fast! Maybe some job losses for gravediggers, profits lost to funeral homes, but what an upside: Jobs, low cost protein, and, maybe, profits the government can apply to the national debt. And there must be some side products, such as fertilizer, some minerals, tallow, etc., which can also be sold. It’s win-win-win-win! OMG, I forgot about organ harvesting! Hey, another profit ccenter!

    C’mon, Obama, what’s not to like? You totally screwed up with your way too small “stimulus” package, and you totally fucked up by extending the Bush tax cuts. Now here’s a way to regain momentum, dude! Make some good use of all those poor folks you kicked under the bus. Leave a long term legacy with your Obama Soylent Green Program. It’ll outlast those piker programs by FDR and LBJ you want to get rid of. This will really change the conversation, way more than that Twitter fest.

    *Thank you for your inspiring words, Sen. Hatch. Republicans ought to love this scheme: It will mostly lower the number of Dem voters. Hey, for Repubs it’s win-win-win-win-Big Win (electorally).

    I called the WH comment line with this suggestion. The woman taking my call merely said she would relay my suggestion to the president. Heh.

  • Tina

    I think, the only reason for him to do that is to shame the Republican leadership for their cowardice..

    Booman arghhhhhhhhhhh

    ….
    For whatever reason, this is what the administration wanted people talking about when they sat down this morning with their Republican counterparts. This is how they wanted to control the political environment. Naturally, rumors that the president wants to cut entitlement programs, including Social Security, are going to make Democrats foam at the mouth with rage. But that’s apparently something the president doesn’t mind because he thinks he’ll get something valuable in return.

    Leaving aside the prospect that the president might actually sign a bill with cuts to Medicare, Medicaid, and Social Security, he wants to leave that impression this morning. He wants his base angry and calling for his head.

    And, I think, the only reason for him to do that is to shame the Republican leadership for their cowardice. Now, is this something that the administration sprung on Boehner at the last minute, or an announcement culminating from their private negotiations?

    I can’t say. So, I won’t overreact.What I know for certain is that the Republican are getting wobbly on their anti-tax pledge, and this will make it even harder for them to maintain their position.

    What’s missing is a ton of detail. Most importantly, what unannounced goodies would come with such a package? How would it be sweetened for Democrats? And what’s the long-game and short-game?

    There’s too much we simply don’t know.

    feminazi extraordinare :D

  • Anonymous

    Salon.com, By Glenn Greenwald, July 7

    For months, the standard narrative among progressive commentators was that Republicans were outrageously exploiting the debt ceiling deadline to impose drastic entitlement cuts on a resisting and victimized Democratic President (he’s weak in negotiations!), but The Post article makes clear that the driving force behind these cuts is the President himself, who is pushing for even larger spending cuts than the GOP was ready to accept:

    President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue. . . . As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.

    This morning’s New York Times article similarly makes clear that it is the President who is demanding an even larger “deficit reduction” package than has previously been discussed. Headlined “Obama to Push for Wider Deal With G.O.P. on Deficit Cuts,” the article reports that “President Obama has raised his sights and wants to strike a far-reaching agreement on cutting the federal deficit” and that he “wants to move well beyond the $2 trillion in savings sought in earlier negotiations and seek perhaps twice as much over the next decade.” This is all in pursuit of “an agreement that ma[kes] substantial spending cuts, including in such social programs as Medicare and Medicaid and Social Security — programs that had been off the table.” The President, as part of the package, is reportedly seeking some elimination of modest tax “loopholes” that benefit wealthy Americans to claim, absurdly, that there is “balanced” sacrifice.

    It’s true that these articles rely upon anonymous sources, though multiple such sources close to the negotiations — from both parties — are cited in consensus about what is taking place, and there are numerous other reports entirely consistent with these. It’s been bleedingly obvious for some time that the bipartisan D.C. political class and the economic factions that own it have been intent on massive cuts to Social Security and Medicare — see George Carlin’s 2007 video explanation below — but the combination of deficit hysteria (repeatedly bolstered by Obama) and the manufactured debt ceiling deadline has, by design, created the perfect pretext to enable this now. As one “Democratic official” told the Post: “These moments come along at most once a decade. And it would be a real mistake if we let it pass us by.” Naomi Klein’s Shock Doctrine is not a GOP-exclusive dynamic.


    Frank Rich Blasts Obama For Letting Wall Street Off the Hook

    Taibblog, By Matt Taibbi, July 6

    A lot of people are talking about Frank Rich’s explosive new article in New York magazine. I think it is a remarkable thing, the latest and maybe the most comprehensive in an increasingly lengthy series of articles and investigations into the Obama administration’s failure to properly investigate the causes of the financial crisis.

    By now this is not quite a mainstream media drumbeat, but it’s coming close: between the reporting of Louise Story and Gretchen Morgenson at the New York Times to the recent not-terribly-laudatory piece on New York Southern District U.S. Attorney Preet Bharara by the New Yorker’s George Packer, to Eliot Spitzer’s bitter commentary on the subject on CNN, to my own bleatings, and now this Rich broadside, it seems quite clear that the Obama administration’s failure to clean up Wall Street is becoming a matter of some fascination with the few investigative journalists who are not covering the Casey Anthony case.


    Obama’s Original Sin

    New York Magazine, By Frank Rich, July 3, 2011

    After 9/11, Rudy Giuliani went on Saturday Night Live to give New Yorkers permission to laugh again. But Mayor Bloomberg never did tell us when we could resume conspicuous consumption after the crash of 2008. And so, as we stumble through the second year of the official “recovery,” it’s been an improvisational return to high-end carousing in Manhattan.

    A case in point was the late-May celebration of the centennial rededication of the New York Public Library. Surely no civic institution could be a more unimpeachable beard for a blowout. The dress code—no black tie—was egalitarian. The Abyssinian Baptist Church Gospel Choir, the New York City Gay Men’s Chorus, and that cute chorus from P.S. 22 in Staten Island—Glee diversity on steroids—were in the house along with some 900 invited guests, marquee names included (Toni Morrison, Jonathan Franzen). Bloomberg delivered a pre-dinner benediction from an altarlike perch on the main reading room’s balcony. “Free and open access to information may be the single most important component of any democratic society,” he said.

    But it was impossible to banish toxic trace memories of the financial meltdown. Some two weeks earlier, the mayor had restricted the “free and open access” he now extolled. His fiscal 2012 budget called for slashing $40 million from the library system, a cut that would have mandated four-day weeks and the shutdown of a dozen branches.

    Ugh – I forgot about Rich being such an apologist…


    One owes respect to the living. To the dead, one owes only the truth.

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