Thursday Open Thread [4.11.13]

Filed in National by on April 11, 2013

John Dickerson is right: “The Obama strategy relies on theater. There is nothing substantively new about Obama’s budget plan. He has offered versions of the same plan (i.e. Chained CPI) privately to Republican leaders, but now he’s trying to go around those leaders. One requirement for building trust with Republican senators is putting these offers on paper. This is meant to show individual senators that he is making good on the promises he has made in private conversations, but it also offers them the cover they need with their constituents. If senators are going to flirt with tax increases, they have to show their voters that they purchased something in return. Now they can point to the president’s public effort on entitlements. But wait, how do we know that Obama is really making a sacrifice? Just look at how upset his supporters are.”

So you progressives and liberals and Democrats who are mad as hell and are screaming at the top of your lungs: keep doing it. It is what Obama wants you to do. You are doing your part in this theater.

Meanwhile, Greg Sargent explains why Obama wants a Grand Bargain in the first place and details his strategy to that underlies the current maneuverings over the budget.

…here is my understanding of White House thinking on why a Grand Bargain is a good outcome.
Obama and his advisers don’t necessarily view Chained CPI [which is included in Obama’s budget] as good policy. But they think a Grand Bargain is ultimately a better outcome than continued sequestration, and the only way to the former is to peel off individual Republicans who are open to new revenues. They believe a Grand Bargain is good for Democrats in general, because it essentially would lock in a medium-term agreement over core disputes — about the safety net and about the size of government, and who should pay for it — that have produced a debilitating stalemate in Washington.

Yes, Republicans would continue railing about government spending, the thinking goes, but no one would listen, since they would have already endorsed a deal stabilizing the deficit. This would deprive Republicans of the ability to focus attention on one of their core targets — Big Government — as a way to avoid grappling with other issues, such as jobs and long-term middle class economic security, immigration, guns, and perhaps even climate change. Reaching a deal on the deficit will force Republicans to confront those problems more directly and to choose between real cooperation on them or continue to calcify as a hidebound, reactionary party incapable of addressing major challenges facing the country.

Liberals will point out that it’s folly to offer Republicans so much up front, because they’ll only denounce the offer as “unserious” and demand more, shifting the debate further in their direction. But officials insist the White House has no intention of budging on its demand for new revenues or allowing Republicans to pull Obama further towards them. (This doesn’t mean liberals shouldn’t make it clear that any further concessions on revenues are unacceptable.) [Del Dem: This goes to Dickerson’s point above]. The offer in the budget, the thinking goes, will drive home that Obama is the one who occupies the compromise middle ground, and if Republicans refuse to deal, it will be crystal clear in the public mind who is to blame for continued austerity. The White House doesn’t worry about putting its fingerprints on entitlements cuts, because Obama has long proposed them himself.

I’m not defending this thinking; I’m simply detailing it. In my view, it’s not clear yet that the sequester will shape up as enough of a political liability to force Republicans back to the table.

Liberals…need to start thinking right now about how to answer this question: Which is worse, a Grand Bargain, or continued sequestration? It’s unclear to me that there is any other likely outcome. Either Republicans will decide to weather sequestration or they will agree to some kind of a deal to replace it. So liberals need a good policy answer to that question.

I thing Greg is right. Either we get a Grand Bargain, or sequestration continues until at least after the 2014 election. Assuming the Democrats win the House by comfortable margins and increase their lead in the Senate, then we liberals can do what we want with the Budget. But recognize that both assumptions are highly unlikely at this moment. The likeliest outcome is that we will have at least a Republican House until 2017. So if your choice is Grand Bargain with chained CPI but the closing of tax loopholes and more revenue or continued sequestration and four more years of continued resolutions and no budget, what do you choose?

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  1. Jason330 says:

    Yes, Greg Sargent, a Grand Bargain is terrific – because Republicans will be reasonable and cool once a Grand Bargain is struck.

    Give me a break. An agreement with Republicans will not “…deprive Republicans of the ability to focus attention on one of their core targets — Big Government” because their issue with “big government” isn’t rooted in reality. It is as much connected to the size of the government as Social Security is connected to the debt.

    Am I really this much smarter than Greg Sargent?

  2. Delaware Dem says:

    No, Jason. You are that much smarter than Obama. Sargent was just explaining Obama’s strategy, not defending it, as he said:

    I’m not defending this thinking; I’m simply detailing it. In my view, it’s not clear yet that the sequester will shape up as enough of a political liability to force Republicans back to the table.

  3. puck says:

    Heard on late night TV:

    After hearing Obama joking with Kamala Harris, Michelle Obama said “That’s pretty good. I’ve got a joke too – What’s black and white and sleeps on the couch?”

  4. puck says:

    Corporate profits at all-time high BECAUSE wages are at all-time low

    Or as the author put it, “The economy is actually doing quite nicely as long as you aren’t paid in wages… Corporations are doing great, better than ever. Humans, on the other hand, look pretty screwed.”

  5. John Kowalko III says:

    If anyone was interested, I thought I might share that liberal legislator, and life-long Democrat, John Atkins has posted on his Facebook that he does not believe that the U.S. ever went to the moon. He has done some “research, reading, and critical thinking” and come to the conclusion that there are just too many unanswered questions.

    These are the types of people elected to office. Many of them obviously spend very little time connected to reality at all, and not just when it comes to the budget or the size of government.

    But maybe John Atkins’s disconnect from reality explains how he can call himself a Democrat while saying things such as “Do you realize I was the only Legislator that received an A+ rating from the NRA? I have fought EVERYDAY for conservative values, against gun control, for the death penalty, lower taxes.”

    At least the House leadership is generous enough to still make this “Democrat” who fights “everyday for conservative values” the Chair of a committee and the Vice Chair of another. Hopefully Schwartzkopf will continue to make Atkins feel comfortable enough that Atkins will remain a Democrat for many years to come. I mean, it’s only what is best for the party.

  6. John Kowalko says:

    I”m not sure I get the point here (in this post) but if my protests voiced regarding this unconscionable proposal by the President looks like it furthers his bluff or will put the opposition at a disadvantage or advantage then you and the President are totally missing the point. I have never been a single issue voter but if this President proceeds down this high-risk adventurous path I will absolutely work against and vote against any purported democrat who supports it.
    Last summer I attended the NCSL (National Council of State Legislators)summit. This bi-partisan group of State Legislators from all 50 states and U.S. territories crafts resolutions to be sent to Congress and the President. NCSL lobbies on behalf of these resolutions representing them as what they are, policies supported by all 50 state + territory that we unanimously support. These summits are attended by many hundred individual legislators almost equally bi-partisan and these resolutions cannot pass without a 3/4 majority vote of all the states and territories in attendance. At this recent summit I authored and submitted, for consideration, a policy amendment which very bluntly stated that Congress and/or the Administration should not cut or lessen Social Security benefits in any way. This amendment passed unanimously and is now part of NCSL policy. There were no mixed signals or nuanced language and a bi-partisan group representing 50 states and territories spoke as one voice. No excuse, no game of chicken, no grandstanding gestures, no attempts to compromise on this one very specific program (not entitlement) paid for by the American people and past and present generations of taxpayers. There is no ambiguity or tolerance of interpretation. No cuts to Social Security beneficiaries Mr. President, none and that’s not a negotiation position that’s a demand.

    On a personal note, President Obama, you have and have had an opportunity given you by circumstances and this particular moment in history. You have an opportunity for greatness but you’ll never achieve that if you forget that you must represent the most vulnerable Americans and their families. I hope you see that opportunity unfolding and do not squander the moment.

    Respectfully,
    John Kowalko

  7. Jason330 says:

    Mr. Gilligan and the district’s voters are guilty in equal measure.

  8. cassandra_m says:

    Really people, you should go see this and the resulting conversation. Someone thinks that it is a fake because he’s looked at the space capsule and it looks like something he would build in his garage. It’s like saying that you’ve seen the Kalmar Nykel and there’s no way Swedes came here on that boat because it isn’t as big or comfy as the ship that took you to Jamaica.

    Shame that Atkins and his Tin Foil Hat Crew can’t recognize real achievement. When the moon project was on, there were fins on cars and I’m not sure there were computers that had the capacity of what sits on most of our desks. American ingenuity and accomplishment used to be something we were proud of.

  9. puck says:

    Buzz Aldrin went to the moon and he said he couldn’t believe some of the crap John Atkins pulled.

  10. Jason330 says:

    Since the NRCC chair made that statement – the Club for Growth has denounced him as a RINO and is calling for him to get primaried.

  11. John Kowalko III says:

    I hope people will see a connection between my father’s post and mine. Although entirely coincidental that we both posted on DL today, I think the posts have a common theme: the disconnect of politicians from reality and the allowance of conservatives (whether Obama or Atkins) into our party. We have allowed people into our party who undermine the ideological basis on which our party stands, and we too frequently go and support them.

    There is a broader issue here about Democrats not forcefully standing up against the increasing dissolution of the values that have made our party so great. I hope that we can all keep that in mind as we fight against this specific issue, and I hope that we all fight loud and hard against Obama’s proposed cuts to Social Security.

  12. Delaware Dem says:

    Alright, I have to issue a “You’ve gone too far” alert. Obama is no progressive firebrand. He is a moderate to liberal pragmatist who will occasionally infuriate us. But he is no conservative, John, and to compare him to Atkins, who is a conservative Republican and not a Democrat, is simply false.

  13. John Kowalko III says:

    Liberal pragmatist? You’re insane. Foreign policy, economic policy, trade policy, environmental policy, healthcare policy, marijuana policy, immigration policy, and then how he deals with peace activists and government whistleblowers. On all these issues he has been conservative (even if not as conservative as the Republicans. Remember, ACA was a Heritage Foundation idea, that Republicans supported before Obama took it as an issue). I do not think that a few outliers in his social policy qualify him as a “liberal pragmatist” when the overwhelming policy supported and implemented by his administration has been moderately conservative to conservative. If you think that “liberal” is a term that is anyway appropriate for Obama, then you have some serious and fundamental misunderstandings about either the term or Obama’s policies.

  14. cassandra_m says:

    Obama is about as liberal as the Congress he has to work with will allow him be and still get some governing done. Frankly, Delaware has an entire Congressional delegation who will happily vote for chained CPI and whatever else is there and pretend it is about shared sacrifice. If a blue state’s Congressional delegation isn’t going to be firmly in the liberal camp, you are working on the wrong primary target.

  15. pandora says:

    Exactly, Cassandra.

    I’m not happy with all of Obama’s positions, but I’ve come to terms with the fact that I’m not the majority.

  16. Delaware Dem says:

    John, I said “moderate to liberal.” Some of his policies are moderate. Some are liberal.

    If you think he is a conservative, it is you who are insane. Clinically insane.

  17. Delaware Dem says:

    This whole conversations reminds me that sometimes Progressive Purists can act just like the teabaggers.

  18. Dave says:

    If Atkins actually was capable of critical thinking he would have come to a different conclusion. If one cannot count to 10, then 1+1 can’t equal 2 because they have no concept of 2.

    Look I know Sussex County is a rural area. I get it. In fact I like it. But really, are people really that dumb here? They went to school. Many to college. Didn’t anyone tell them books were for reading not jacking up their cars?

    If I had been living here a long time, I would be embarassed about my fellow Sussec Countians. Right now I’m just amused.

  19. cassandra_m says:

    In the Kids Do the Darnedest Things category: an anti-choice student group distributed little rubber fetuses to their classmates one day. Teenaged foolishness ensues. The school asks the anti-choice group to leave their rubber fetuses home and the anti-choice kids go like ZOMG and sue that their First Amendment rights were infringed. The 10th Circuit tells the kids to sit their butts down.

    Seriously the description of what the kids did to the rubber fetuses is pretty funny.

  20. puck says:

    DD – it’s not about purity, it’s about self-interest. Some of his economic policies are conservative. Very conservative. I think you are engaging in apology when you call them moderate.

    In a sense most of us are single-issue voters. Everybody gives each issue a different weight. Where you stand depends on where you sit.

    If you are economically secure and have the luxury of caring more about gay marriage or gun control (for example) than the economy, you might think Obama is liberal/moderate.

    But if you are unemployed or underpaid, and attaining economic security is more important to you than gay marriage or gun control, you might think Obama is moderate/conservative. Or more accurately, socially liberal but economically conservative.

    And people nearing retirement age would be freaking out if they could think far enough ahead to know what was about to hit them, and understood what “chained CPI” meant. This might be one issue where FOX News would be useful in waking them up.

  21. cassandra_m says:

    This is pretty choice from someone who was mad as hell that Obama made a compromise to extend the Bush tax cuts in return for unemployment benefits and other stimulus measures for people who really needed those things.

  22. John Kowalko III says:

    Unfortunately, puck, Fox News is corporatist before conservative, and the chained CPI is exactly what the corporate interests want. I doubt Roger Ailes will be recommending disdain for it in his daily memos.

    (Also, Obama has hardly been a social liberal – a social moderate at best. What did he do for gay marriage or gun control in his first term? He didn’t support gay marriage his entire career until Biden basically forced his hand. And he still does not believe that DOMA should be repealed on moral grounds, but only on federalism grounds, because he believes gay marriage should be decided by the states individually. And as for gun control, just look at what he has been doing to the international arms treaty. I do not think his meager positive proposals at home offset his other actions with regards to the issue.)

  23. puck says:

    Cassandra, it is especially cruel to this generation to say that the highest Democratic priority is to execute bad deals to give them handouts instead of jobs. But I suppose that to be expected from someone who still holds a grudge against Clinton for giving people jobs instead of welfare.

    Cruel, because we remember in living memory when we had broadly shared prosperity at every economic bracket, and plenty of jobs. It was painful to watch Obama shunning the policies that created that prosperity, even when handed to him on a platter.

    Now people are coming of age thinking a 9% unemployment rate and 5-6 applicants for every job opening is normal, which will have a corrosive impact on our politics as nobody remembers what a good economy feels like anymore.

  24. cassandra_m says:

    You did not advocate any policies that would have changed prosperity in the 2 year window that these people were still unemployed. None. And yet here we have another bit of two-facedness from you. The economy was trashed but good by the Bush era GOP (with an assist from Bill Clinton) and it was NEVER going to bounce back quickly. It still isn’t. But it was not a bad thing to make sure that people had it a little easier while the economy slowly came back, even if it meant a dreaded compromise.

  25. puck says:

    “The economy was trashed but good by the Bush era GOP (with an assist from Bill Clinton)”

    I’ve only felt betrayed by Bill Clinton twice. The first time was when he said “I did not have sex with that woman” and I believed him.

    The second time was when he came to Delaware and told me to my face to stop pushing for more progressive HCR (i.e., public option) and support whatever Obama came up with. Now I have to tell my children the story and leave it to them to “fix it later.”

  26. John Kowalko says:

    Dear Del Dem,
    With all due respect and utter dismay at your inability to see clearly the very nose in front of your face, if you think that it requires “progressive purity” to see the horribly unconscionable behavior of this President in risking and suggesting to cut Social Security benefits, (an immoral act never before perpetrated by a sitting Democratic President) and to compare the legitimate reaction of people of good conscience with “teabaggery” than I would suggest you look within yourself as regards “sanity” or “insanity” of conscience. And I suggest you try to understand the distinct difference between “progressive PURITY” and “progressive HONESTY” It’s never been a matter of definition it has always been a matter of principle.

    State Representative John Kowalko

  27. Delaware Dem says:

    I am getting confused as to which Kowalko I am talking to here.

    Representative Kowalko,

    First off, no where in this thread have I defended the President’s budget concerning Chained CPI. I tend to agree with you, your son, and Jason330 that it is a stupid strategy with a predictable outcome. Instead, what I have done here is post two links to columns from John Dickerson and Greg Sargent that are explaining their respective opinion as to the White House strategy in offering this budget with Chained CPI, and that part of the strategy is for Progressives to be outraged. No where have I said that Progressives should not be outraged. And no where have I said that this strategy is necessarily a good one. But I did ask a real world question that progressives and liberals and Democrats need to answer given the political reality of the GOP being in control of the House until 2014 and possibly until 2017:

    I thing Greg is right. Either we get a Grand Bargain, or sequestration continues until at least after the 2014 election. Assuming the Democrats win the House by comfortable margins and increase their lead in the Senate, then we liberals can do what we want with the Budget. But recognize that both assumptions are highly unlikely at this moment. The likeliest outcome is that we will have at least a Republican House until 2017. So if your choice is Grand Bargain with chained CPI but the closing of tax loopholes and more revenue or continued sequestration and four more years of continued resolutions and no budget, what do you choose?

    I would like an answer to that question from a Progressive point of view. What is the better outcome for Progressives given those two choices. It is the same situation that we faced with the negotiations over HB50. The progressive ideal is to have more tax tiers above 60K. But the political reality is that we were faced with a choice of 1) pass the bill making 6.6% single rate on above 60K permament and live to fight another day, or 2) not pass that bill and let the rates sunset. I tend to look at what is the most progressive outcome in the real world situation in front of me, and not what the ideal would be. If that is a failing dooming me from not being considered a Progressive anymore, so be it.

    Second, I think you are misunderstanding my comments about Progressive purity. Your son called the President a conservative and equated him with downstate conservative Republican John Atkins. I said in response the following:

    “Obama is no progressive firebrand. He is a moderate-to-liberal pragmatist who will occasionally infuriate us. But he is no conservative, John, and to compare him to Atkins, who is a conservative Republican and not a Democrat, is simply false.

    Now, granted, the President is not being a progressive here, or even a liberal, when he proposes a budget with Chained CPI, but it also does not make him a fire breathing teabagging conservative, especially when you consider the overall strategy at work, whether or not you agree with it and whether or not it will work. I think we need to be a little more circumspect when we make comparisons and throw around labels, lest we morph into our downstate conservative brethen who consider anyone to the left of Christine O’Donnell to be a RINO and a liberal, except that now the rule is that anyone to the left of yourself is a firebreathing conservative.

    With respect,

    Delaware Dem.

  28. Dan says:

    Amazing to see actual liberals commenting here.

  29. John Kowalko says:

    With whom does the labeling start and end? Consider “progressive purists can act just like the teabaggers” and “clinically insane”.

    We are not limited to two choices, Jason. The president has limited us to just two choices.
    Respectfully,
    State Rep John K.

  30. Delaware Dem says:

    Well, it started here in this thread not by me. You will note that my comments you quoted were in response to labeling by John Kowalko III. He was the first to call my characterization of Obama as a moderate-to-liberal pragmatist insane. Actually, he called me insane. So I give as good as I get.

    And, respectfully, the President has not limited us to two choices. He has expanded our choices from one to two as we would be limited to one choice had the President not submitted this budget, and that one choice would have been continued sequestration until 2014 since the GOP controls the House and will not pass the Senate Dem or Progressive Caucus budget, and the Senate would not ass the Ryan budget. So continued sequestration with continuing budget resolutions until 2014 was our only choice. As Greg Sargent and John Dickerson point out, the President’s budget was a strategy to change that dynamic. And that is all I have been saying here.

  31. Delaware Dem says:

    And I know what your response will be to my last point, that the President could have submitted a budget that does not include chained CPI, and that would have been the Progressive ideal, and I agree. So in that case, you are right that the President did “limit” us to two choices. But that budget would have been as dead as the Ryan Budget, the Senate Dem budget, and the Progressive Caucus budget.

  32. Delaware Dem says:

    And in the end, all this arguing among us may be for nothing anyway, as the likeliest outcome still is that the Republicans will not include any new revenue in any form, and thus chained CPI is off the table and the Obama budget is as dead as all the others. But in that instance, as Sargent and Dickerson point out, the White House thinks the point is proven to the Beltway chattering classes and to voters at large that it is the Republicans who are to blame for not compromising since the President was willing, and thus begins the 2014 campaign on that basis.

  33. John Kowalko III says:

    Delaware Dem,

    I apologize for calling you insane. I did not mean it literally, but as more of an exclamation, and it was still a poor choice of words.

    Also, I just wanted to add that I believe we should follow a third option (as there are more than just two). We should not be passing continuing resolutions. They are the wrong thing, especially when they come attached with riders such as the Monsanto Protection Act. Instead, we should let the government shut down, just like President Clinton did. The Democrats should refuse to work with the Republicans until the Republicans are willing to be rational and reasonable and come to a fair compromise. And given how far our country has been pulled to the right, especially on economic matters, a fair compromise does not even come close to what the Republicans are demanding. If we want to take a so-called “pragmatist” perspective, and that perspective means allowing the Republicans to be as extreme as they want, then we will only continue to be pulled farther and farther to the right, which has been shown to be a failure of an economic ideology. We need to stand up for our values at some point, or we can be sure that they will be lost eventually.

    Finally, I will always post as John Kowalko III, so that I am identifiable from my dad. And the next time I write a letter to the editor, I will probably add that I am a student in D.C., just to make sure that it is clear (especially if I am criticizing the Governor).

  34. cassandra_m says:

    I’ve only felt betrayed by Bill Clinton twice.

    No surprise that someone with his own version of the Laffer curve wasn’t the least bit disturbed by Glass-Stegall.

  35. Tom McKenney says:

    There is a broader issue here about Democrats not forcefully standing up against the increasing dissolution of the values that have made our party so great. I hope that we can all keep that in mind as we fight against this specific issue, and I hope that we all fight loud and hard against Obama’s proposed cuts to Social Security.

    This is a complete knee jerk reaction. There no proposed cuts, just a different way of adjusting increases. We have made great strides in protecting our seniors since the 60’s and we should continue to do so but seniors as a group are fairly well off. We do need a number of adjustments to make Social Security fair and available to all over the long term. We should eliminate the earnings cap and raise the age of eligibility. We have abandoned our values when it comes to children. Seniors vote children do not. Food security, access to good health care, and availability of high quality early education are concerns that we seniors who are comfortable enough should bother us. To take care of those who need our help the most, shows are values.

  36. Dave says:

    If Chained CPI U is a more accurate measure, then I am in favor of it. That is has the effect of decreasing future increases in benefits is not the fault of a more accurate measure. Rather it is the fault of the system.

    There is a disconnect betweeen what Social Security is intended to be versus what it has become (the primary source of retirement for many). Either we need to change the purpose of Social Security to close that gap and adjust contributions and benefits accordingly or determine what we need to do about retirement in general for ordinary citizens (the majority of us).

    Just for the record I have been paying in the max contribution for the last 6 or 7 years but will collect almost nothing from Social Security due to the Windfall Elimination Provision. Regardless, Social Security is a societal responsibility but it cannot be the only leg on the stool.

  37. cassandra_m says:

    First, Chained CPI is a cut in benefits to those getting SS. You still get it, but they replace COLA with Chained CPI.

    Second, I mentioned reading an article that discussed Chained CPI as perhaps not as useful a measure for seniors since their cost increases are more tightly tied to stuff that gets expensive faster. Like health care. I found it again.

  38. Tom McKenney says:

    As I said on another post today, if we had free universal healthcare for seniors the CPI is a fair measurement for benefit increases.

  39. Dave says:

    First, cuts cannot be in the future. Cuts are only cuts when there is a decrement in the present. Future increases will be smaller, but they technically are not cuts. That may translate to reduced economic means to meet existing costs but it’s still not a cut.

    I read the article (and some others) that assert that seniors spend more on health and housing. They obviously spend more on health, but I don’t get the housing spending at all. The data says that the CPI for Urban Consumers is 40.2%, for Urban Wage Earners: 39.2% and Elderly: 44.5%. I’m kinda curious about that and when I have some time I will do a little research on the basis for those numbers.

    Still, while I recognize that the elderly expenses are higher in those two areas, they are lower in every other area (http://www.bls.gov/opub/ted/2012/ted_20120302_data.htm). In fact when I examined the numerical differences between the CPI-U and the CPI-E for each category, the sum of the difference is that the CPI-E shows a price index of 4.3% less than the CPI-U. In theory, if one relies on the data of course, it means that overall the basket of goods and services for the elderly is less than for everyone else.

    That said, health care costs are unconscionable and the nation’s response seems to be acceptance by shifting the conversation over to something like Social Security, not to manage the costs, but to pay them.

    It’s sort of like building homes for the homeless (a worthy endeavor) and sometimes I wonder if we are doing enough to prevent homelessness or fighting over abortion when we should be preventing unwanted pregnancy.

  40. cassandra_m says:

    What? If you cut your Starbucks budget item from $500.00 to $50.00, you have indeed cut your future expenditures on Starbucks.

    From a good explainer over at Wonkblog (which launched off of a BLS graph that you should see):

    Here are the facts. Chained-CPI does mean that Social Security beneficiaries will see their benefits cut. Imagine a person born in 1936 who retired in 2001, at age 65. For simplicity, let’s assume they’re eligible for the maximum benefit. Given that the cap was below $30,000 a year as recently as 1980, it’s not inconceivable that a middle or upper-middle class person with steadily increasing earnings since 1958 would be in this situation.

    Their initial benefit would have been $1,538 a month, or $18,456 a year. Under existing law, they would have gotten a series of cost-of-living adjustments (COLAs). By 2013, COLAs would have increased this person’s annual benefit to $24,689.49. However, under chained CPI, it would be $23,820.19, a decrease of $869.30. That’s a 3.5 percent cut in benefits. And, of course, a 3.5 percent cut in income matters a lot more when you’re barely clearing $20,000 a year than it does when you’re making a regular middle-class salary.

    If you are someone who has been doing what financial advisors tell you to do, which is to find out how much you’ll get in SS, figure out what you’ll need to live on in retirement and then work at saving up the difference between the two — chained CPI will certainly show up in your spreadsheets as a cut.

  41. Dave says:

    “What? If you cut your Starbucks budget item from $500.00 to $50.00, you have indeed cut your future expenditures on Starbucks.”

    I’m not sure I understand that in context of a cut in benefits. Spending (budget is not spending by the way) is outgo. Benefits are what comes in. A cut would be a reduction in benefits. A reduction in future spending (budget) is simply not a cut. In fact to label it as such causes the focus to change away from the problem (like my example about health care costs which changed from how to control costs to how to pay for the costs with nothing being done about about controling costs). It’s an unintentional sleight of hand shifting attention away from the problem.

    Also, I found the official answer to why housing costs (CPI-E) are greater than the CPI-U and CPI-W. The weight for owner-occupied shelter is higher for the elderly than the CPI-U and CPI-W populations, as a higher proportion of elderly own homes than the other population groups. The weight for rent, on the other hand, is smaller for the CPI-E population. So home ownership is the culprit in that regard.

    Increasd health care costsfor the elderly are easier to answer. The elderly spend more on health care because they are elderly (I would love to have a discussion on how to control health care costs for everyone, not just the elderly rather than trying than just accepting them and figuring out how to pay for them).

  42. cassandra_m says:

    Then I should have said that you’ve reduced Starbucks revenue by $450 you did not spend with them. That is still a reduction to Starbucks.

  43. Tom McKenney says:

    We should have some sort of means testing. Does anybody think Mitt Romney is going to starve in his old age?