Better Late Than Never

12/02/2012
Robert Kuttner
Co-founder and co-editor, 'The American Prospect'
http://www.huffingtonpost.com/robert-kuttner/fiscal-cliff_b_2229352.html

President Obama has belatedly grasped that holding firm on tax increases for the top 2 percent, and defending Social Security, Medicare and Medicaid against needless cuts, is good politics and good policy. As his Treasury Secretary, Tim Geithner put it on Fox News Sunday, "Why does it make sense for the country to force tax increases on all Americans, because a small group of Republicans want to extend tax rates for 2 percent of Americans, why does that make any sense? There's no reason why it should happen."

Geithner was even more explicit on CNN, when interviewer Candy Crowley pressed him on whether the Administration was really prepared to go "off the cliff" if Republicans refused to raise tax rates on the top 2 percent.

"If Republicans are not willing to let rates go back up [on the top 2 percent" Geithner said, "and we think they should go back to the Clinton levels when the American economy did exceptionally well, then there will not be an agreement."

In his budget proposal, the president offered no cuts in Social Security, and only $400 billion over 10 years in Medicare and other savings, money that can be gotten by allowing Medicare to negotiate bulk discounts with drug companies and other administrative savings, without raising the eligibility age or otherwise cutting into benefits.

The Republicans, meanwhile are revealed as the people who would push the economy off a cliff in order to fight for tax breaks for the richest 2 percent; the party that would rather cut benefits in Medicare and Social Security than have the wealthy pay even the relatively low tax rates of the Clinton years.

It was Winston Churchill who said that you can always count on Americans to do the right thing, after they've tried everything else. Obama, belatedly, is doing the right thing.

He tried taking big savings out of Medicare in order to finance his Affordable Care Act. The Republicans pilloried him for it.

He tried pivoting to fashionable austerity, appointing the Bowles-Simpson Commission to propose far deeper budget cuts than the economy required. The commission majority report offered a deflationary program of cuts in Medicare, Social Security, and no rate increases on the taxes paid by the rich. Mercifully, the commission failed to get the necessary super-majority for its proposals.

And he tried offering cuts in Social Security and Medicare in order to get a budget deal in 2011 with House Speaker John Boehner. But the refusal of the Republicans to consider even a penny of tax increases saved the President from himself.

Now, as a last resort, President Obama has come around to sensible economics and smart politics -- no cuts in social insurance benefits, no backing down on tax hikes for the rich, no deeper deficit cuts until the economy is stronger. His plan even proposes $50 billion in new public investments -- not enough but a big step in the right direction.

What's so heartening is not just that Obama is helping voters appreciate what Republicans really stand for but that he is turning his back on the echo chamber of deficit hysteria ginned up by Wall Street as a way of cutting social insurance and protecting low tax rates on the richest. Seeing Pete Peterson and his corporate deficit-hawk cronies lose this fight is as satisfying as seeing the Republicans lose.

So what happens next?

The Republicans will continue to huff and puff that it's Obama's fault if taxes go up for everyone. But the fact is that the Senate has already approved a continuation of the Bush tax cuts for the bottom 98 percent -- all the Republican House has to do is concur and Obama will sign the bill into law.

The business elite, through the corporate-funded campaign "Fix the Debt" campaign, will continue to warn about the perils of the automatic tax hikes and spending cuts -- the dreaded fiscal cliff -- and press the two parties to meet each other halfway.

But domestic spending has already been cut by $1.7 trillion over 10 years under the terms of the 2011 budget deal. Domestic spending has been cut enough. Tax rates on the rich are already at a postwar low, and it hasn't levitated a depressed economy. The Democratic Party have already met the GOP more than halfway. And each time, the Republicans use the concession as the new starting point.

If Obama hangs tough and the budget briefly goes "over the cliff" in the form of automatic tax increases for everyone and mandated indiscriminate spending cuts that risk sending the economy back into recession, the Republicans are at last set up to take the blame that they richly deserve.

Obama seems willing let that happen, in order to keep the pressure on Republicans to allow taxes to rise on the rich.

The risk is that when the negotiations finally get to the end game, and Republicans are forced accept the tax deal, Obama may succumb to pressure to cut Social Security and Medicare, so that he can say that he, too, gave ground on issues that were difficult for his party. The risk is that he will listen to his inner bipartisan.

That would be a huge mistake. The Republicans have been unmasked for who they are. The best thing Obama can do is to continue to hold the high ground of this debate. The Republican position is entirely at odds with the vast majority of voters. If Obama doesn't fold a winning hand, eventually the Republicans will have to come to him.

Carly Fiorina Wants Stuff

Failed CEO Carly Fiorina, with $40m retirement package, says union pensions too high
11/26/2012 by Chris in Paris
http://americablog.com/2012/11/carly-fiorina-fiscal-cliff-budget.html

The other day it was the CEO of a bailed out bank demanding cuts to Social Security.

But nobody whines about the fake “fiscal cliff” better than failed GOP candidate and “19th Worst CEO of All Time” CEO Carly Fiorina.

You might remember Fiorina from the days when she worked at HP, and was sent packing in 2005 with a whopping $40 million severance benefits package. Was that “fair,” Carly?

Fiorina is widely considered one of the worst CEOs in recent years, though that didn’t stop her from receiving millions in cash, stock, benefits and pension when she was fired. It rarely does.

Carly Fiorina Says You Can’t Want Stuff Too

But no, in her entitled little world, the problem is not the fat cats like her, but the unions.

“It is not fair that public employee union pensions and benefits are so rich now that cities and states are going bankrupt, and college tuition is going up 20 and 30%… There is a lot that isn’t fair right now.”

Failed investments and drastic tax cuts by governments have nothing to do with the problem. Imagine that. As Think Progress noted, Fiorina whined on TV that she “only” received a $21 million severance, though she somehow overlooked the rest of the redundancy plan. But to be fair to Fiorina, what Republican candidate hasn’t overlooked another $20 million plus?

She starts at about 2 minutes into the video below.  More from me after the video.Other than being an expert on living off of a platinum parachute and failing as a political candidate, it’s not clear what special expertise Fiorina has to offer for NBC News or any other media outlet. She’s certainly not even considered to be a corporate jobs creator, the way Jack Welch is (wrongly) considered by the media. She has a pretty good agent though if she can get TV spots despite her awful record.

So tell me who is really part of the moocher class that corporate CEOs and 1%-ers keep talking about? Are they the people asking for basic healthcare or the people who have enough money to build moats and personal golf courses around their mansions? Another tip off sign of a moocher is that no matter how much they have, it’s not enough and they want more of your money.

Damn if these Republicans don’t always want stuff.

The other sign of who belongs to the moocher class is to listen to who actually believes in the so-called fiscal cliff. Anyone who believes it’s for real is probably a moocher, but a moocher who grabs a lot more money than anyone who actually needs Social Security or Medicare.

As we get closer to the end of the year, expect the moocher class to be in your face a lot more, explaining how the situation is dire and the world will end if we don’t address the “fiscal cliff” but cutting everything we hold dear while leaving the GOP tax and war machine firmly in place to kill the budget yet again another day.

Ignore them and remember, it’s not a fiscal cliff, it’s an austerity bomb.

Goldman CEO insists on Social Security cuts

Goldman’s multi-billion dollar bailout queen CEO insists on Social Security, Medicare cuts
11/20/2012 by Chris in Paris
http://americablog.com/2012/11/multi-billion-dollar-bailout-queen-ceo-insists-social-security-cuts-are-necessary.html

Of course, another super rich white guy, who is set for life, wants to gut Social Security and Medicare because “we can’t afford it.”

Why is it that the people howling the most about ripping apart the social system, who complain the loudest about us being unable to afford Social Security and Medicare, are those who profited so heavily from the public’s largesse?

Goldman Sachs CEO Lloyd Blankfein is an extreme example since his own firm (like the rest of Wall Street) required billions of taxpayer money to stay alive, but let’s not forget about the destructive duo, Alan Simpson and Erskine Bowles.

Alan Simpson spent his life working as a politician, followed by going on the speaking circuit or whatever it is that he does when he talks about butchering Social Security and Medicare while promoting tax cuts. It must be nice knowing that he’s set for life with the best health care plan, and a retirement plan unknown to most working Americans. And our friend, fellow “Democrat” Erskine Bowles also did well working in finance followed by the White House, then a large state university followed by his own speaking circuit gigs.

One does wonder how much they intend to give up from their own fat government benefits, as part of our “common sacrifice.”

Many of us have completely had it with rich, white guys like this proudly speaking to the media about how much gutting and shredding they think is necessary to “save the system,” while refusing to budge on their own massive tax cuts. They’ve all lived high on the hog at our expense, and now we’re giving them an easy forum for promoting this rich-guy assault on the system.

When is enough enough for these people? Much like sending a bill to Texas as the cost of seceding, let’s send a bill to these pampered fat cats for everything we’ve given them, and tell them all to shove off. They’ve cost us enough — quite literally trillions — and now they want to cost us more, by ripping apart the social fabric of America.

No thanks.

CBS News:

BLANKFEIN: You’re going to have to undoubtedly do something to lower people’s expectations — the entitlements and what people think that they’re going to get, because it’s not going to — they’re not going to get it.

PELLEY: Social Security, Medicare, Medicaid?

BLANKFEIN: You can look at history of these things, and Social Security wasn’t devised to be a system that supported you for a 30-year retirement after a 25-year career. … So there will be things that, you know, the retirement age has to be changed, maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised. But in general, entitlements have to be slowed down and contained.

PELLEY: Because we can’t afford them going forward?

BLANKFEIN: Because we can’t afford them.


Someone please help me refresh my memory, but how did we afford to give away trillions of dollars to Wall Street, to save their lifestyle, so they could continue giving themselves huge bonuses while the rest of us lost our business and our homes?

I don’t recall any complaints back in 2008 and 2009 about the middle class not being able to afford the bail out of people like Blankfein, do you?  Or any talk during the Bush years of the entire country not being able to afford his massive tax cuts that broke the budget?

Some thanks.

Bill To Lift Social Security’s Tax Cap

Democratic Senator Introduces Bill To Lift Social Security’s Tax Cap, Extend Its Solvency For Decades
Jeff Spross
Nov 16, 2012
http://thinkprogress.org/economy/2012/11/16/1208701/democratic-senator-introduces-bill-to-lift-social-securitys-tax-cap-extend-its-solvency-for-decades/

Social Security, the government entitlement that provides support to seniors in retirement, the disabled, and other Americans, has long been in the cross-hairs of budget reformers. The program’s trust fund currently won’t be spent out until 2033, and after that it would still pay 75 percent of scheduled benefits.

Most of the proposed solutions to the shortfall involve cutting back benefits and raising the minimum retirement age. Both are deeply problematic; at its current level of benefits Social Security kept over 20 million people out of poverty in 2011, many Americans in demanding manual labor jobs already take early retirement and thus reduced benefits as it is, and lower-income Americans have not particularly benefited from the average rise in lifespans.

This week, however, Sen. Mark Begich (D-AK) put forward a reform package that goes in the opposite direction, while still financially securing the program’s trust fund for roughly the next seven decades. The Washington Post’s Dylan Matthews laid out the details:

The Begich bill would lift the current payroll tax cap, which exempts wages in excess of a certain amount ($110,100 this year) from the tax. In turn, it would give high earners, who would pay more, additional benefits upon retirement, just as benefits increase as wages do for workers below the cap. […]

It also increases benefits across-the-board. While Bowles-Simpson and Domenici-Rivlin adopt a stingier “chained CPI” measure for inflation, Begich adopts “CPI-E,” or a measure that specifically captures inflation in goods that seniors buy.

Due to deteriorated health and other considerations, goods seniors buy tend to be more expensive than those younger people purchase. Begich’s CPI-E change would mean, effectively, a 4.5 percent benefit increase for the program’s beneficiaries, including not just seniors but their designated survivors and disabled Americans as well.


The Congressional Research Service ran the numbers back in 2010 and concluded that eliminating the payroll tax cap — while also paying out the new benefits to wealthier Americans in accordance with their new taxes — would eliminate 95 percent of the trust fund’s shortfall over the next 75 years.

Begich may not hit that goal exactly, depending on how the legislation is written. In particular, his change to CPI-E also lifts the overall benefit level, on top of the changes in CRS’ scenario. But his reform would probably come very close.

Obama and progressives

Obama and progressives: what will liberals do with their big election victory?
With fights over social security, Medicare, ongoing war, and other key progressive priorities looming, what will they do with their new power?
Glenn Greenwald
Wednesday 7 November 2012
http://www.guardian.co.uk/commentisfree/2012/nov/07/obama-progressives-left-entitlements

The greatest and most enduring significance of Tuesday night's election results will likely not be the re-election of Barack Obama, but rather what the outcome reflects about the American electorate. It was not merely Democrats, but liberalism, which was triumphant.

To begin with, it is hard to overstate just how crippled America's right-wing is. Although it was masked by their aberrational win in 2010, the GOP has now been not merely defeated, but crushed, in three out of the last four elections: in 2006 (when they lost control of the House and Senate), 2008 (when Obama won easily and Democrats expanded their margins of control), and now 2012. The horrendous political legacy of George Bush and Dick Cheney continues to sink the GOP, and demographic realities – how toxic the American Right is to the very groups that are now becoming America's majority – makes it difficult to envision how this will change any time soon.

Meanwhile, new laws to legalize both same-sex marriage and marijuana use were enacted in multiple states with little controversy, an unthinkable result even a few years ago, while Obama's late-term embrace of same-sex marriage seems to have resulted only in political benefit with no political harm. Democrats were sent to the Senate by deeply red states such as Indiana, Missouri and North Dakota, along with genuinely progressive candidates on domestic issues, including Elizabeth Warren in Massachusetts and Tammy Baldwin in Wisconsin, who became the first openly gay person elected to the Senate. As a cherry on the liberal cake, two of the most loathed right-wing House members – Rep Joe Walsh of Illinois and Allen West of Florida – were removed from office.

So the delirium of liberals this morning is understandable: the night could scarcely have gone better for them. By all rights, they should expect to be a more powerful force in Washington. But what are they going to get from it? Will they wield more political power? Will their political values and agenda command more respect? Unless the disempowering pattern into which they have voluntarily locked themselves changes, the answer to those questions is almost certainly "no".

Consider the very first controversial issue Obama is likely to manage, even before the glow of his victory dims, literally within the next couple of weeks. It is widely expected - including by liberals - that Obama intends (again) to pursue a so-called "Grand Bargain" with the GOP: a deficit- and debt-cutting agreement whereby the GOP agrees to some very modest tax increases on the rich in exchange for substantial cuts to entitlement programs such as social security and Medicare, the crown legislative jewels of American liberalism.

Indeed, Obama already sought in his first term to implement sizable cuts to those programs, but liberals were saved only by GOP recalcitrance to compromise on taxes. In light of their drubbing last night, they are likely to be marginally if not substantially more flexible, which means that such a deal is more possible than ever.

In other words, the political leader in whose triumph liberals are today ecstatically basking is likely to target their most cherished government policies within a matter of weeks, even days. With their newly minted power, will they have any ability, or even will, to stop him? If history is any indication, this is how this "fight" will proceed:

STEP ONE: Liberals will declare that cutting social security and Medicare benefits – including raising the eligibility age or introducing "means-testing" – are absolutely unacceptable, that they will never support any bill that does so no matter what other provisions it contains, that they will wage war on Democrats if they try.

STEP TWO: As the deal gets negotiated and takes shape, progressive pundits in Washington, with Obama officials persuasively whispering in their ear, will begin to argue that the proposed cuts are really not that bad, that they are modest and acceptable, that they are even necessary to save the programs from greater cuts or even dismantlement.

STEP THREE: Many progressives – ones who are not persuaded that these cuts are less than draconian or defensible on the merits – will nonetheless begin to view them with resignation and acquiescence on pragmatic grounds. Obama has no real choice, they will insist, because he must reach a deal with the crazy, evil GOP to save the economy from crippling harm, and the only way he can do so is by agreeing to entitlement cuts. It is a pragmatic necessity, they will insist, and anyone who refuses to support it is being a purist, unreasonably blind to political realities, recklessly willing to blow up Obama's second term before it even begins.

STEP FOUR: The few liberal holdouts, who continue to vehemently oppose any bill that cuts social security and Medicare, will be isolated and marginalized, excluded from the key meetings where these matters are being negotiated, confined to a few MSNBC appearances where they explain their inconsequential opposition.

STEP FIVE: Once a deal is announced, and everyone from Obama to Harry Reid and the DNC are behind it, any progressives still vocally angry about it and insisting on its defeat will be castigated as ideologues and purists, compared to the Tea Party for their refusal to compromise, and scorned (by compliant progressives) as fringe Far Left malcontents.

STEP SIX: Once the deal is enacted with bipartisan support and Obama signs it in a ceremony, standing in front of his new Treasury Secretary, the supreme corporatist Erskine Bowles, where he touts the virtues of bipartisanship and making "tough choices", any progressives still complaining will be told that it is time to move on. Any who do not will be constantly reminded that there is an Extremely Important Election coming – the 2014 midterm – where it will be Absolutely Vital that Democrats hold onto the Senate and that they take over the House. Any progressive, still infuriated by cuts to social security and Medicare, who still refuses to get meekly in line behind the Party will be told that they are jeopardizing the Party's chances for winning that Vital Election and – as a result of their opposition - are helping Mitch McConnell take over control of the Senate and John Boehner retain control of the House.

And so it goes. That is the standard pattern of self-disempowerment used by American liberals to render themselves impotent and powerless in Washington, not just on economic issues but the full panoply of political disputes, from ongoing militarism, military spending and war policies to civil liberties assaults, new cabinet appointments, immigration policy, and virtually everything else likely to arise in the second term.

Indeed, nobody takes STEP ONE in that depressing ritual even a little bit seriously. Nobody believes the declarations of progressives about what is "unacceptable", about what their "red lines" are, about how they will refuse to go along with what they are given if it contains what they declare intolerable. That's because STEPS TWO THROUGH SIX always follow, and until that pattern is broken, STEP ONE will continue to be viewed as a trivial joke.

With last night's results, one can choose to see things two ways: (1) emboldened by their success and the obvious movement of the electorate in their direction, liberals will resolve that this time things will be different, that their willingness to be Good Partisan Soldiers depends upon their core values not being ignored and stomped on, or (2) inebriated with love and gratitude for Obama for having vanquished the evil Republican villains, they will follow their beloved superhero wherever he goes with even more loyalty than before. One does not need to be Nate Silver to be able to use the available historical data to see which of those two courses is the far more likely one.

Obama’s Second Term Goal

Obama’s Second Term Goal
Cut Social Security
Jon Walker
Thursday October 4, 2012
http://fdlaction.firedoglake.com/2012/10/04/obamas-second-term-goal-cut-social-security/

If President Obama behavior on the issue of Social Security and his willingness to offer up cuts to Social Security as part of a deficit deal left any doubt about his personal intentions for the program, last night’s debate should put those doubts to bed. One of the most telling moments regarding what Obama’s second term would be like was his answer to the question on entitlements. From CNN debate transcript:

21:39:56: LEHRER: All right? All right. This is segment three, the economy. Entitlements. First — first answer goes to you, two minutes, Mr. President. Do you see a major difference between the two of you on Social Security?

21:40:15: OBAMA: You know, I suspect that, on Social Security, we’ve got a somewhat similar position. Social Security is structurally sound. It’s going to have to be tweaked the way it was by Ronald Reagan and Speaker — Democratic Speaker Tip O’Neill. But it is — the basic structure is sound.


This could have been a moment for Obama to try a sharp contrast with Romney and make a powerful appeal to swing voters. Obama could have made a simple and popular promise to protect the program from cuts. He could have said something like, “I consider Social Security benefits to already be incredibly modest. I promise to protect them as they are for all current future Americans. A small increase in revenue will be enough to make the trust fund stable for another 75 years.”

The president didn’t do this. Obama actively choose to pass up this chance to score political points in the middle of a contested election. Instead, Obama decided to use a vague term like “tweaked” to give himself maximum flexibility in the future. The reason a candidate does this is because they want to do something and they don’t want campaign statements getting in the way.

If Obama wasn’t planning to cut Social Security as part of “tweaking” it in a grand bargain, last night he would have promised not to do so.

Beast of the Year 2012: Paul Ryan

The votes are in, and The Konformist readers have spoken. Paul Ryan is your choice for the 2012 Beast of the Year - a choice that is well deserved.

Perhaps the biggest news story of the last year - if not of the last four years - is just how scary crazy the entire GOP has gone in the age of Obama.  And no figure has been more important in the Republican Party to the right-wing movement than Paul Ryan, currently their VP nominee in this year's election.  His 2012 federal budget plan would abolish korporate income taxes, estate taxes, taxes on capital gains, dividends and interest, and heavily reduce tax rates on the wealthy while ruthlessly cutting social programs, partially privatizing part of Social Security to Wall Street and fully privatizing Medicare.  Some would call this "Ayn Rand on Crack" (which may be an unfair smear of Ms. Rand, who was at least a gifted writer) yet all but four Republicans in the the HOR and five in the Senate voting for it.

Runner-Up: Brian Moynihan

In the unlikely event that Ryan can no longer fill his duties as Beast of the Year, Brian Moynihan is ready to take over the crown. Rest assured the BOTY trophy is in good hands either way, as Mr. Moynihan has had great Beastly practice as CEO of Bank of America.

In any case, we salute you, Paul Ryan and Brian Moynihan.  Congratulations, and keep up the great work, dudes!!!

Thank You, Paul Ryan

Robert Kuttner
Co-founder and co-editor, 'The American Prospect'
09/16/2012
http://www.huffingtonpost.com/robert-kuttner/thank-you-paul-ryan_b_1888870.html

Two years ago, the Democrats handed the Republicans their two crown jewels -- Social Security and Medicare. By targeting Medicare for budget "savings" that could be used to finance what the Republicans called Obamacare, the White House gave the GOP ammunition to contend that the Democrats were taking benefits away from seniors.

Expanding health coverage for the young and defense of Medicare for the elderly got depicted as a zero sum game. Republicans made huge gains in 2010 with seniors. Instead of the political winner it should have been, Obamacare became an epithet.

Then, in the aborted grand budget bargain of 2011, Obama was so eager to achieve a compromise on mostly Republican terms that he very nearly agreed to needless cuts in Social Security. Only Republican intransigence on any kind of tax hikes saved the president from himself -- or more precisely from his deficit-hawk advisers.

Now, however, Republicans have given Social Security and Medicare back to the Democrats (where they belong.) Polls show that Medicare is no longer a winner for the Republicans, and the Democrats have embraced the term, "Obamacare" as positive label.

The reason, of course, is Paul Ryan.

Thanks to Ryan's very explicit advocacy of scrapping public Medicare in favor of vouchers, seniors are returning to their natural Democratic home. The transparently bogus effort of the Romney-Ryan ticket to walk back Ryan's voucher proposal -- and alter it into a plan where seniors get to choose traditional public Medicare or vouchers -- only reinforces the voter perception of Romney as someone who keeps changing his story. The euphemism of "premium support" is fooling nobody and adds to the perception of Republican evasiveness.

The latest New York Times-CBS poll shows that some three quarters of likely voters favor keeping Medicare the way it is, and trust Obama more than the Republicans to defend it. This is a huge shift from last year.

Democrats, meanwhile, have acquired some spine. Defense of public Medicare against "vouchercare" has become part of their standard message.

So far, so good.

Also good ammunition against Romney-Ryan was Ryan's support in 2005 for a George W. Bush plan to allow younger workers to divert some of their Social Security taxes into private accounts -- a proposal that proved a political disaster and was subsequently scrapped.

But never underestimate the Democrats' capacity for snatching defeat out of the jaws of victory.

Lurking in the wings is the latest reincarnation of Bowles-Simpson, the bipartisan zombie that refuses to die. A "Fix the Debt" campaign," chaired by none other than Erskine Bowles and Alan Simpson, has become the darling of the centrist media and of Wall Street.

The Peter G. Peterson Foundation, the National Committee for a Responsible Federal Budget, several leading Democratic deficit hawks, and some 70 corporate CEOs have pledged to raise $50 to 100 million dollars in corporate money for this latest campaign, which promotes yet another a grand bargain of tax increases and cuts in Social Security and other social spending.

Bowles continues to be touted as Obama's next Treasury Secretary when Tim Geithner finally (mercifully!) calls it a day. Other Democrats who are part of this effort are former Pennsylvania Governor Ed Rendell, who was chair of the Democratic National Committee in 2000, and former Democratic Congressman Vic Fazio, who once headed the Democratic Congressional Campaign Committee.

Rounding out this group of Democrats doing Republicans' bidding on fiscal issues are former Georgia Senator Samm Nunn and Wall Streeter and former Obama official Steve Rattner.

Shame!

Bowles and Simpson were featured on NBC's Meet the Press Sunday where they were described as "widely hailed as serious thought leaders on dealing with the country's economic problems."

Hailed, that is, by the same corporate media. The mainstream media just laps this stuff up, because Simpson, a Republican, is willing to criticize the Romney-Ryan ticket and Bowles, a Wall Street Democrat, is not shy about criticizing Obama. So they must be both courageous and right. As Bowles said on Meet the Press Sunday, "We don't think President Obama has gone far enough in his reduction on entitlement spending."

But Social Security continues to be in surplus, and to lend the rest of the government money. Its projected future deficits did not cause the current economic crisis. Its reduced revenues are the result of the crisis.

Social Security is financed by payroll taxes. If median worker pay rose with productivity, instead of most of the gain in national income going to people like those on the "Fix the Debt Campaign", Social Security would be in surplus indefinitely. Social Security's modest projected shortfall can be erased by raising the ceiling on income subject to payroll tax, not by slashing benefits.

The corporate elite lives in a self-reinforcing bubble, where the deficit is the economy's most dire problem. An important study by political scientists Benjamin Page, Larry Bartels and Nathan Seawright interviewed a sample of very wealthy Americans. Not surprisingly, their views on the importance of budget balance versus job creation and social supports were far to the right of those of most voters. (Fully 87 percent of very wealthy respondents put deficit reduction as the most pressing national issue.)

This is conventional wisdom among the top one percent. Corporate CEOs of the sort who are underwriting this latest Bowles-Simpson assault don't need Social Security for their own retirement and don't mind sacrificing it on the altar of budget balance.

Back in the real world, Social Security is both good policy and good politics. As private pension plans keep being gutted and seniors interest earnings on savings accounts are basically nothing, Social Security is the one government guaranteed portion of retirement income. It is immensely popular, and to the extent Democrats are resolute in its defense, the program's popularity rubs off on them.

But because of pressure from corporate-funded groups like this one, the Obama Administration keeps coming close to buckling on the issue of traditional Democratic defense of Social Security. This will arise again as Congress gets closer to the dread "fiscal cliff," made up of expiration of the Bush tax cuts in January 2013 and the threatened budget sequester (that is the fruit of Republicans holding the government hostage in 2011.)

Given the importance of Social Security to regular Americans and its partisan value to Democrats since Franklin Roosevelt, no sane Democrat should be associated with these efforts. But in an age of Citizens United and unlimited corporate donations, where Obama tacks back and forth between criticizing Wall Street and soliciting Wall Street executives for campaign funds, it is all too tempting to demonstrate fiscal "soundness" by joining this parade.

Thanks to Paul Ryan, however, the president may be spared again. The association of Romney-Ryan with the gutting of Medicare and Social Security offers just too tempting a political target to throw away for the sake of impressing Simpson, Bowles, and their corporate cronies. Or so we must hope.

Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril.

Lies, Bigger Lies, and the Ryan Budget

Pat Choate

Economist, Author and Ross Perot's Vice Presidential Running Mate in 1996
08/16/2012
http://www.huffingtonpost.com/pat-choate/lies-bigger-lies-and-the-_b_1792580.html

The Presidential campaign now seems to hinge on whether the financing of Medicare and Social Security is going to kill the American economy. It is not. This is a faux issue being pushed by radical Republicans who want to eliminate these two programs altogether.

The financial reality is that the Old Age Survivors and Disability Insurance Program (OASDI), the Disability Insurance Program (DI) -- what we call Social Security -- and the Medicare Program have huge trust funds paid for by workers over the past 40 years and both Social Security and Medicare are solvent well into the future.

The Social Security trust fund has more than $2.7 trillion of assets and Medicare's trust fun has $244 billion. No other federal programs have such large reserves to finance future operations.

In their 2012 Annual Report, the Social Security System's Board of Trustees reported that the "dollar level of the combined trust funds (OASDA and DI) declines beginning in 2021 until assets are exhausted in 2033."

Yes, the Social Security System is fully funded for another 21 years. Even if no changes are made between now and then, the System will provide 75 percent of benefits to recipients for an additional 50 years. This is hardly a financial crisis.

The Trustees also reported that Medicare is fully funded until 2024 -- that is another 12 years.

Small painless steps, such as increasing the cap on wages taxed to fund Social Security, can extend its surpluses until the last part of the 21st Century -- for us, our children and children's children.

Shifting U.S. health care to a single pay medical system, such as Israel's, which Mitt Romney found so outstanding during his recent trip there, could cut medical costs from the present 16 percent of the U.S. Gross Domestic Product to 8 percent and provide even better care. That would create more than $1 trillion of annual savings alone.

What is particularly striking about all this is that even as the GOP ticket and their surrogates are making these specious arguments, our infrastructure is falling apart because of underinvestment. Cities and states are firing hundreds of thousands of teachers, firemen and police, because they have too little money. More than 25 million American workers who want a job remain out of work. Apparently, these are not crises that merit the candidates' or the nation's immediate attention.

The real crisis, according to Mitt Romney, Paul Ryan and the Republican Party is the financing of Social Security and Medicare. To "save" Medicare, Ryan's plan advocates creating a voucher program for those 55 years old and under. To "save" Social Security, they want to privatize it. Subtly, they are even implying that these two programs are the source of the present federal budget deficit of $1 trillion annually.

The true goal of these Republicans is to use the current fiscal crisis as a Trojan horse to gut both these programs. Our federal budget deficits exist because of lost revenues created by the Bush tax cuts, the two wars that are being financed by more debt, and the economic collapse created by federal deregulation of banks and Wall Street. Therein lies the real solution.

Simply put, both the Republicans and Democrats are filling the presidential and Congressional campaigns with noxious lies.

But of all these lies, the Ryan Budget's attack on Medicare and Social Security is the greatest and of the most consequence.

CEO Plan to Steal Social Security and Medicare

The CEO Plan to Steal Your Social Security and Medicare
Monday, 30 July 2012
Dean Baker, Truthout
http://truth-out.org/news/item/10600-the-ceo-plan-to-steal-your-social-security-and-medicare

Many people are following the presidential election closely with the idea that the outcome will have a major impact on national policy. However, according to Steven Pearlstein, a veteran Washington Post columnist and reporter, it may not matter who wins the election. In a column last week, Pearlstein told readers that the top executives of some of the country's largest companies are getting together to craft a budget package that they will try to push through Congress and get the president to sign.

While Pearlstein clearly sees these backroom meetings of corporate chieftains in positive terms (he refers to them as "grown-ups" who have been noticeably absent from the conversation about the budget), the rest of us might view this plotting a bit differently. As Pearlstein openly acknowledges, this corporate coup is an end-run around the electorate. As corrupt as the political process may have become, at least we will get a vote in the election. Pearlstein's plotters are not inviting the rest of us into the conversation.

Many of the same folks who brought the economy to ruin just a few years ago are now going to come up with a plan that is supposed to set the budget and the economy on a forward path. At the center of their proposal are big cuts in Social Security and Medicare.

The most popular Social Security cut among this gang is a reduction in the annual cost of living adjustment (COLA) by 0.3 percentage points. They are betting that are ordinary people are too dumb to notice this cut since it is a relatively small amount each year.

However, the effect of this cut accumulates into a much bigger deal over time. After ten years, it is roughly 3 percent; after 20 years, it would be close to 6 percent; and after 30 years, it would be close to 9 percent.

If we assume that an average retiree collects benefits for 20 years, this implies an average cut in their benefits of 3 percent. Is that a big deal? Well, there are a lot of would-be Social Security cutters who are screaming bloody murder because President Obama wants to increase the tax rate on a portion of their income by a bit more than 3 percentage points. This means that if President Obama's proposal to increase taxes on the richest 2 percent is a big deal, then the plan to cut the Social Security COLA is also a big deal.

The corporate CEO crew is also considering a plan to raise the normal retirement age for Social Security to 69. And, they want to reduce the benefit formula for high-income workers, which, incredibly, they define as people who earn more than $40,000 a year.

Their main trick for Medicare is to raise the age of eligibility from 65 to 67. Apparently, our CEO gang has not discovered that the health insurance market for older people is a disaster. They also continue to promote the misconception that the problem is Medicare and Medicaid.

These programs are actually much more efficient than private insurers. The real problem is our private-sector health care system which already costs more than twice as much per person as the average in other wealthy countries, with few obvious benefits in outcomes.

The scary budget projections that our CEOs like to tout assume that health care costs will exceed 20 percent of gross domestic product in a decade. That would imply costs of more than $34,000 for a family of four in today's economy. And these costs are projected to keep growing through time.

The normal response to this situation would be to focus on the need to fix the health care system. But many of Pearlstein's CEOs profit from the waste in the health care system, so they would rather cut our Medicare benefits.

So there you have it, the richest people in the country - the big gainers from economic growth over the last three decades - have plans to cut Social Security and Medicare benefits for current and future retirees.

To get some perspective on this story, the typical near retiree has about $180,000 in wealth, including everything, such as the equity in their home, their 401(k) and any other savings. That is what our CEO gang makes in a week. The average Social Security check of $1,200 a month is more than half of the income for two-thirds of seniors and more than 90 percent for one third. Yet, the CEOs think seniors are living too well.

But wait, there's more. We're all paying for their campaign to take away our Social Security and Medicare. We do this through several different channels.

First, many of these CEO and honcho types come from Wall Street. For example, Erskine Bowles, the co-chair of President Obama's deficit commission, is a director of Morgan Stanley in one of his day jobs. Had it not been for the taxpayers' generosity, the bank that Mr. Bowles directs would have died in the fall of 2008, so it would not be around to pay him his six-figure stipend.

The other way we are paying for this corporate effort to cut our Social Security and Medicare is by virtue of the fact that we allow the CEOs to pay for their campaign with pre-tax dollars. If most of want to give $100 to a political candidate or political cause, we have to first pay taxes on our income and then make the campaign contribution out of what we have left.

However, if you are a CEO who wants to cut Social Security and Medicare, the Supreme Court says you can make your contributions with pre-tax dollars, in effect deducting this contribution as if you were giving money to charity. According to Pearlstein, the CEOs' "charitable" contribution for cutting Social Security and Medicare will be on the order of $278 million.

For most of us, that sum would be real money, but not for CEOs who control trillions of dollars. And with the rest of us subsidizing through our tax dollars this effort to cut our Social Security and Medicare, how can the CEOs not take up Pearlstein's call?

Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.

FACTS ABOUT THE 99 PERCENT

FACTS ABOUT THE 99 PERCENT AND THEIR HAPPIER COUNTERPARTS, THE 1 PERCENT
Richard Metzger, DangerousMinds.net
http://www.dangerousminds.net/comments/occupy_thanksgiving

The richest 5 percent of households obtained roughly 82 percent of all the nation’s gains in wealth between 1983 and 2009. The bottom 60 percent of households actually had less wealth in 2009 than in 1983, meaning they did not participate at all in the growth of wealth over this period.

The average wealth of the 1% is 225 times bigger than the wealth of the typical household - perhaps the highest it’s ever been. In just the last generation, the richest 1% almost quadrupled their incomes.

Three decades ago, CEOs made about 40 times as much as an average worker - now CEOs make almost 200 times as much as regular employees.

Last year, half of Americans earned less than $26,000, while CEOs at top 500 companies raked in an average of $11 million. Over the past decade, earnings for middle-class Americans actually fell. In fact, working Americans’ wages are now a lower percentage of our economy than they’ve ever been.

The divide between the richest and the poorest is worse in America than it is in nearly all of Europe and Asia and much of Africa. It’s about as bad as in Rwanda and Serbia - and it’s bad for our economy.

The 1 percent is not an accident - it is the result of policies our government chose to pursue.

For the last three years, there have been at least 4 unemployed workers for every single job opening. Right now there are 4.6 jobless workers for every job opening.

If the government doesn’t extend benefits to jobless workers in December, it will devastate millions. The unemployment rate, currently over 9 percent, includes more than six million people who have been out of work for six months or longer. Unemployed workers spend their benefit money on things like groceries, gas, rent - and other necessities that increase economic activity that saves and creates jobs (like grocery clerks, gas station attendants and real estate administrators).

(Sources: Wall Street Journal, Media Matters, Economic Policy Institute, National Employment Law Project)

COMMONLY TROTTED OUT FALSEHOODS/MYTHS/SPIN AND YOUR FACT-BASED ANSWERS

“We have serious economic problems, and that means everybody has to tighten their belts.”

Laying off nurses, teachers and firefighters doesn’t make our communities stronger - it just puts more Americans out of work and puts our safety at risk.

It is economic suicide to lay off state workers and undermine the services we rely on just to fund huge tax cuts for the wealthy.
Instead of taking away the rights of hardworking Americans to negotiate their pay and benefits - which does nothing to address deficits or create jobs - let’s start with getting rid of tax breaks to millionaires and corporations that send our jobs overseas.

Corporate profits are at an all-time high, but corporations are paying lower taxes than ever - and some aren’t paying any at all. Politicians who refuse to ask them to pay their fair share just don’t get it.

“The Occupiers are all elite anarchist vegan violent hippie communist jobless tattooed America-hating thugs.”

Um, no.

The Occupiers are part of the 99 percent, and come from all walks of life. They are teachers, nurses, jobless workers, working moms, disenfranchised people, young people, older people, working professionals, activists. They are construction workers, firefighters, artists, business owners.

They have a very clear message and that is that for too long, the 1 percent has had continual, astronomical earnings and benefits while the 99 percent suffer or are turned on one another.

This kind of public protest is part of a proud American tradition, one that is protected by the Constitution.

“Corporations should not be taxed because they create jobs.”

Tax giveaways for the rich don’t get the economy moving or create jobs because millionaires and billionaires don’t need or spend the money - they just hand it over to their hedge fund managers, send jobs overseas and continue to enjoy overseas tax shelters and other corporate loopholes.

Working people like you and me spend that money to pay bills, buy milk and bread, and see The Muppet Movie at the multiplex. Are you saying you oppose the Muppets?

CEOs are currently making an average of more than 200 times as much as the average worker. And yet they do not create jobs here at home because they are consistently rewarded for it with?more tax breaks.

“Too much government is the problem.”

Wall Street control of government is the problem. When there’s a revolving door between lobbyists on K Street and Capitol Hill, and corporate elites determine political and legislative goals, then you have total corporate control of government.

Lack of government regulations has led to unfettered Wall Street greed that continues to this day - look at Enron, the Wall Street Meltdown and the Gulf Oil spill. Nobody can say with a straight face that we need less oversight and less accountability.

Here’s a video of Jack Abramoff, a famous former lobbyist convicted of illegal activity, explaining how the revolving door of lobbyists and Capitol Hill works on 60 Minutes. Watch it with your family! (Before or after The Muppet Movie.)

“We need to balance our budget first. We need to fix the deficit before we can invest in jobs.”

Major economists agree that the WORST way to handle the deficit is to put more Americans OUT of work. We need to stop tax giveaways for millionaires who don’t create jobs and corporations that send our jobs overseas and use the money to put Americans back on the job.

“We need a free market. Government regulations destroy jobs.”

Do you want someone to make sure your food and water are safe to eat and drink? An unregulated free market creates a system that is rigged against the 99 percent. It is what paved the way for predatory, unregulated lenders and bankers to hijack our economy, and its influence is what led to the appalling bank bailouts given to the “too big to fail” 1 percent, leaving the 99 percent out in the cold - literally.
Again: an unregulated free market, crony capitalism and unfettered Wall Street greed is what caused the financial crisis.

“The reason people are struggling is their own fault. I could find a job if I wanted to right now.”

Right now there are five jobless people for every one job opening. Millions have been laid off through no fault of their own. Unable to pay for basic things like groceries, rent and bills, people are now being punished for being jobless by employers who discriminate against them and rhetoric that blames them for an economy wrecked by Wall Street greed.

“Unemployment insurance keeps people unemployed and causes unemployment to increase.”

Unemployment insurance is one of the most effective ways to help get our economy going again - economists estimate that for every dollar spent on unemployment insurance, the economy grows by one and half times as much.

People who are out of work cut back on spending - meaning less money flowing into our economy. Unemployment benefits mean people who are out of work are putting money back into the economy.

“Tax cuts increase revenue.”

That…doesn’t even make sense.

Tax breaks mean less revenue, not more, and they don’t create jobs or grow the economy - the Bush tax cuts led to record budget deficits that we’re still dealing with.

Let’s put money into the hands of the real job creators in this country - working- and middle-class Americans - and stop giving special tax breaks to millionaires and billionaires who don’t need it and don’t spend it.

“The United States has the highest corporate tax rate in the world.”

The United States has the second-lowest corporate tax rate in the developed world, and many of America’s largest corporations don’t pay any taxes at all.

The middle class has sacrificed enough. It’s time for big corporations to start paying their fair share.

“This is class warfare.”

I think it is safe to say that it wasn’t our teachers, firefighters and nurses that tanked the economy; it wasn’t the middle class or working class who gambled away people’s life savings.

No middle-class family should have to pay higher taxes than any millionaire.

America was founded as a country where we reward hard work more than how much money anyone’s family has. But right now, a paycheck earned from working in a job is taxed higher than the money that millionaires and billionaires make off money they already have.

As Warren Buffett tells it, the only “class warfare” in America is being waged by his class - and they’re winning.

“We don’t need tax increases to get our fiscal house in order.”

Experts, including conservative economists, agree that spending cuts alone are not enough. We need serious solutions, not irresponsible tax pledges.

They tried tax handouts to the richest few that never trickle down, and they tried giant tax breaks for big corporations that lay off Americans and ship our jobs overseas. We’ve all had enough of their schemes that don’t work.

We can’t afford millionaire tax giveaways when jobs are what we need.

Plus, we’re not talking about raising YOUR taxes. Unless you’re a multimillionaire, in which case, these mashed potatoes should be way better.

When Presidents Reagan, Bush Sr., and Clinton told millionaires and big corporations to pay their fair share, it was followed by millions of new jobs and strong economic growth.

“Out-of-control entitlement spending is responsible for the deficit.”

You’re going to say that with grandma sitting right there?

They’d rather gut Social Security and Medicare than make millionaires and big corporations pay a few more cents on the dollar in taxes.

Social Security doesn’t add a penny to the deficit, and Medicare is the most cost-effective way for our seniors to get health care. But Republican politicians never liked Social Security or Medicare and still want to take them away.

When Republican politicians take away the benefits our seniors have earned, they take money out of the pockets of middle-class Americans. That takes away customers from our businesses - and that means less hiring and fewer jobs.
If they were serious about deficits, they wouldn’t have fought so hard for the Bush tax cuts and two unfunded wars that led to the record deficits we’re dealing with today.

“Unions are bad for business or only care about their members.”

Today, unions across the country are on the frontlines advocating for basic workplace reforms such as increasing the minimum wage and pushing lawmakers to require paid sick leave. For all workers.

It’s easy to forget that we have unions to thank for a lot of things we take for granted today in today’s workplaces: the minimum wage, the eight-hour work day, child labor laws, health and safety standards, and even the weekend.

Studies show that a large union presence in an industry or a region raises wages even for nonunion workers. That means more consumer spending and a stronger economy for us all.

A recent Harvard University study revealed that the rising income inequality of the last three decades directly correlates to the decline in union membership.

Gingrich Says Child Labor Laws Should Be Rolled Back...

Gingrich Says Child Labor Laws Should Be Rolled Back So Kids Can Be Janitors

David Teich
November 21, 2011
http://2012.talkingpointsmemo.com/2011/11/gingrich-says-child-labor-laws-should-be-rolled-back-so-kids-can-be-janitors.php

Newt Gingrich’s desire to roll back Social Security is no secret. But apparently his quest to tackle decades-old New Deal policies doesn’t stop there.

Now Gingrich is taking on an issue he says “no liberal wants to deal with” — economically suffocating child labor laws.

During a Harvard address on Friday, Gingrich blamed child labor restrictions for doing “more to create income inequality in the United States than any other single policy.” “It is tragic what we do in the poorest neighborhoods, entrapping children in…child laws, which are truly stupid,” said Gingrich.

“Most of these schools ought to get rid of the unionized janitors, have one master janitor and pay local students to take care of the school,” he added. “The kids would actually do work, they would have cash, they would have pride in the schools, they’d begin the process of rising.”

Gingrich likes to tout his credentials as a historian, so he may be aware that America’s first major federal child labor restrictions were enacted amidst an economic crisis even worse than today’s: President Franklin Roosevelt signed the Fair Labor Standards Act during the Great Depression. In part, the 1938 law passed because many adults were so desperate for work they were willing to take low-paying jobs normally reserved for children.

How the rich created the Social Security “crisis”

The Bush tax cuts coupled with a decades-long smear campaign are the real threat to the successful program Gene Lyons
Wednesday, Nov 2, 2011
http://www.salon.com/2011/11/03/how_the_rich_created_the_social_security_crisis

Now and then, George W. Bush told the unvarnished truth—most often in jest. Consider the GOP presidential nominee’s Oct. 20, 2000, speech at a high-society $800-a-plate fundraiser at New York’s Waldorf-Astoria. Resplendent in a black tailcoat, waistcoat and white bow tie, Bush greeted the swells with evident satisfaction.

“This is an impressive crowd,” he said. “The haves and the have-mores. Some people call you the elites; I call you my base.”

Any questions?

Eight months later, President Bush delivered sweeping tax cuts to that patrician base. Given current hysteria over what a recent Washington Post article called “the runaway national debt,” it requires an act of historical memory to recall that the Bush administration rationalized reducing taxes on inherited wealth because paying down the debt too soon might roil financial markets.

Eleven years later, the Post warns in a ballyhooed article, reading like something out of Joseph Heller’s “Catch-22,” that Social Security—the 75-year-old bedrock of millions of Americans’ retirement hopes—has “passed a treacherous milestone,” gone “cash negative,” and “is sucking money out of the Treasury.”

Anybody who discerns a relationship between these events, that is, between a decade of keeping the “have-mores’” yachts and Lear jets running smoothly and a manufactured crisis supposedly threatening grandma’s monthly Social Security check must be some kind of radical leftist.

That, or somebody skeptical of the decades-long propaganda war against America’s most efficient, successful and popular social insurance program. It’s an effort that’s falsely persuaded millions of younger Americans that Social Security is in its last days and made crying wolf a test of “seriousness” among Beltway courtier-pundits like the Post’s Lori Montgomery, who concocted an imaginary front page emergency out of a relatively meaningless actuarial event.

All in service, alas, of a single unstated premise: The “have-mores” have made off with grandma’s money fair and square. They have no intention of paying it back. That’s the only possible interpretation of the Post’s admonition that “the $2.6 trillion Social Security trust fund will provide little relief. The government has borrowed every cent and now must raise taxes, cut spending or borrow more heavily from outside investors to keep benefit checks flowing.”

Little relief? In fact, the law’s working precisely as intended. After 28 years of generating huge payroll tax surpluses to cover the baby boomers’ retirement benefits, the system must now begin to draw upon those funds to help pay current benefits—the vast majority still covered by current payroll tax receipts.

“Rather than posing any sort of crisis,” explains Dean Baker of the Center for Economic and Policy Research, “this is exactly what had been planned when Congress last made major changes to the program in 1983 based on the recommendations of the Greenspan commission.”

Again, this is the beneficiaries’ money, invested by the Social Security trustees in U.S. Treasury bonds drawn upon “the full faith and credit of the United States.” Far from being “meaningless IOUs” as right-wing cant has it, they represent the same legally binding promise between the U.S. government and its people that it makes with Wall Street banks and the Chinese government, which also hold Treasury Bonds.

A promise not very different, the Daily Howler’s Bob Somerby points out, from the one implicit in your bank statement or 401K (if you’re lucky enough to have one). Did you think the money was buried in earthen jars filled with gold bullion and precious stones?

Raise taxes, cut spending or borrow? What other options does the U.S. government, or any government, have?

On his New York Times blog, Paul Krugman dissects the Catch-22 logic behind the Post’s bogus crisis. You can’t simultaneously argue “that the trust fund is meaningless, because SS is just part of the budget, then claim that some crisis arises when receipts fall short of payments, because SS is a standalone program.” For practical purposes, it’s got to be one or the other.

So is Social Security a “Ponzi scheme”? No, it’s group insurance, not an investment. You die young, somebody else benefits. Its finances have been open public record since 1936. Do fewer workers support each beneficiary? Sure, but who cares? It’s denominated in dollars, not a head count. The boomers were nearing 40 when the Reagan administration fixed the actuarial tables. No surprises there.

Are longer life expectancies screwing up the numbers? Not really. Most of the rise is explained by lower infant and child mortality, not by old-timers overstaying their welcome. Kevin Drum points out that gradually raising the payroll tax 1 percent and doubling the earnings cap over 20 years would make Social Security solvent forever.

But that’s not good enough for the more hidebound members of the $800-a-plate set. See, over 75 years Social Security has provided a measure of dignity, security and freedom to working Americans that just annoys the hell out of their betters.

Arkansas Democrat-Gazette columnist Gene Lyons is a National Magazine Award winner and co-author of "The Hunting of the President" (St. Martin's Press, 2000). You can e-mail Lyons at eugenelyons2@yahoo.com

Obama Ditches Social Security Cuts

From Reuters:
President Barack Obama, yielding to pressure from his political base, has backed off a proposal to reform Social Security retirement benefits in a high-stakes deficits deal Congress needs to reach this year.

The Democratic president upset many core supporters in July when he considered changing how the popular pension funds are linked to inflation during acrimonious negotiations with Republicans over raising the U.S. debt ceiling.

Obama saw the change as a way to ensure the federal program remains viable for future generations, but liberals felt he was giving up too much ground to Republicans.

White House spokesman Amy Brundage said Obama's suggestions on how Congress can get to a $1.2 trillion deficit-reduction target, to be unveiled on Monday, "will not include any changes to Social Security."

A senior administration official said his proposals to 12-member congressional panel tasked with finding the savings by November 23, were still being finalized.

But they are expected to total as much as $3 trillion over 10 years and include tweaks to Medicare and Medicaid, the government's healthcare programs for the elderly and for the poor, and tax changes to close more loopholes for wealthy Americans and companies.

Obama's recommendations will not be binding on the "super committee" of six Republicans and six Democrats, but may influence the tone of the negotiations and will play into the 2012 election campaign rhetoric.

His shift in stance means the Democratic members of the super committee charged with tackling the federal deficit would not have to make immediate concessions in negotiations with their Republican counterparts...

Obama backs away from Social Security in deficits plan
Laura MacInnis and Thomas Ferraro | Reuters
9-15-11
http://news.yahoo.com/social-security-not-obama-deficits-plan-white-house-135310933.html

Social Security Tax Raise For Rich Proposed By House Liberals

Social Security Tax Raise For Rich Proposed By House Liberals, Democrats
09/14/11
http://www.huffingtonpost.com/2011/09/14/social-security-tax-rich_n_962510.html

WASHINGTON — Nervous that Social Security seems under siege from all sides, congressional liberals on Wednesday proposed raising the payroll tax that funds the program, but only for people earning more than $250,000 a year.

The legislation is designed to keep the pension program solvent for the next 75 years, which is the standard used by government actuaries, by putting an additional $6.5 trillion into the Social Security trust fund over that period. The plan also is intended to head off other efforts to overhaul the program or trim benefits, or to use its funds to help pay for debt reduction.

"No more discussion about raising the retirement age, no more discussion about cutting benefits, no more discussion about privatization," said Rep. Peter DeFazio, D-Ore., one of the sponsors.

With Republicans making opposition to tax increases their mantra, the measure seems to have little chance of enactment.

Nonetheless, it gives liberals a chance to underscore their support for the widely popular program at a time when President Barack Obama has proposed cutting the payroll tax to help create jobs and GOP presidential contender Rick Perry, the Texas governor, has called its finances a "Ponzi scheme."

The bill's sponsors noted that during his 2008 presidential campaign, Obama proposed raising the payroll tax on people earning over $250,000. He's discussed the idea as president but has yet to offer legislation following through on it.

Currently, workers and their employers each owe a payroll tax of 6.2 percent of a worker's wages up to $106,800 a year. That tax would also be imposed on wages above $250,000 under the liberals' plan. Other sponsors include Sens. Bernard Sanders, I-Vt., Barbara Boxer, D-Calif., and Sheldon Whitehouse, D-R.I.

In an effort to boost consumer spending and create jobs, Obama last week proposed paring the 6.2 percent payroll tax on employees to 3.1 percent next year and cutting the payroll tax for employers as well. He would replace the revenue Social Security would lose with money from the government's overall budget.

That plan has split liberals. Sanders said he opposes it because it would make Social Security more vulnerable to budget cuts. Boxer said she favors it because it would create jobs while protecting Social Security.

In debt reduction talks between Obama and House Speaker John Boehner, R-Ohio, this summer, they discussed a plan to slow the growth of Social Security benefits that they never embraced. In 2005, President George W. Bush proposed letting recipients turn part of their Social Security nest egg into stock market investments. The idea went nowhere.

Don't cut Medicare, Medicaid or Social Security benefits

Tell the deficit super committee: Don't cut Medicare, Medicaid or Social Security benefits
http://act.credoaction.com/campaign/sc_dont_cut

Medicare, Medicaid and Social Security are in danger. But the biggest threat isn't driven by economics, it's driven by politics.

Twelve members of Congress from the House and Senate have been newly empowered to force both chambers of Congress to vote on a deficit reduction bill that can neither be amended nor filibustered.

Unfortunately many members of this new bipartisan, bicameral deficit super committee have Medicare, Medicaid and Social Security squarely in their sights.

In essence, they think it's better to let seniors fall into poverty, or deny needed health care to the poor and elderly, than to raise taxes on people who can comfortably afford to pay more.

Tell the members of the deficit super committee not to cut Medicare, Medicaid or Social Security benefits.

Cuts to Social Security, Medicare and Medicaid are deeply unpopular, even among Republican voters. But Congress isn't reflecting the values and priorities of most Americans.

It used to be that programs like Medicare and Social Security were considered a "third rail" in politics, and that neither Democrats nor Republicans wanted to face the wrath of voters should they try to roll back these wildly popular programs.

But today in Washington, the programs that keep millions of Americans from falling into poverty have taken a back seat to manufactured concerns about the long term implications of our national debt. Incredibly, some Democrats have bought into the Republican craze for cuts, even signaling that they would be willing to put Medicare benefits on the table!

Until our economy recovers, we should be spending money to take care of people and boost our economy, not fixating on deficit reduction.

Yet the concern about the debt has been used as a wedge to force deep cuts to important programs that help many Americans live a dignified life.

That doesn't mean that there shouldn't be vigilant efforts to root out fraud in government programs. But it does mean that we absolutely cannot afford the human or the economic effects of cuts to vital benefits.

We need to make sure that we speak out to put massive pressure on the members of the deficit committee not to agree to a plan that puts Medicare, Medicaid and Social Security benefits on the chopping block.

Let's be clear on some things. While there are progressive reforms to all these programs, that's not what's on the table.

Furthermore, Social Security has nothing to do with the debt and is projected to be fully solvent for over 25 years. And while Medicaid and Medicare costs are rising, that's because health care in this country is very expensive. Saving money by cutting benefits does nothing more than shift the cost of necessary medical care onto the backs of people who might not be able to pay for it.

Finally those who say we can't afford these hugely popular and successful programs are also happy to spend trillions of dollars on corporate welfare, needless military spending and tax cuts for the rich.

Government has a role in ensuring there's a social safety net, and democracy demands that everybody is asked to pay what they are able before we start cutting programs that all of us need.

Tell the members of the deficit super committee not to cut Medicare, Medicaid or Social Security benefits.

Strengthen Social Security

Social Security doesn't add a penny to the deficit - so why is the Super Congress so eager to slash it? It's time for Obama and the Super Congress to strengthen Social Security, not slash it - check out http://other98.com/obama-take-the-new-deal-off-the-table if you agree.

http://www.youtube.com/watch?feature=player_embedded&v=rP6B380YvSA

The Market Has Spoken: Austerity Is Bad for Business

http://globalresearch.ca/index.php?context=va&aid=25916
Ellen Brown
Global Research, August 6, 2011
Web of Debt

It used to be that when the Fed Chairman spoke, the market listened; but the Chairman has lost his mystique. Now when the market speaks, politicians listen. Hopefully they heard what the market just said: government cutbacks are bad for business. The government needs to spend more, not less. Fortunately, there are viable ways to do this while still balancing the budget.

On Thursday, August 4, the Dow Jones Industrial Average fell 512 points, the biggest stock market drop since the collapse of September 2008.

Why? Weren't the markets supposed to rebound after the debt ceiling agreement was reached on Monday, avoiding U.S. default and a downgrade of U.S. debt?

So we were told, but the market apparently understands what politicians don't: the debt deal is a death deal for the economy.

Reducing government spending by $2.2 trillion over a decade, as Congress just agreed to do, will kill any hopes of economic recovery. We're looking at a double-dip recession.

The figure is actually more than $2.2 trillion. As Jack Rasmus pointed out on Truthout on August 4th:

Economists estimate the "multiplier" from government spending at about 1.5. That means for every $1 cut in government spending, about $1.5 dollars are taken out of the economy. The first year of cuts are therefore $375 billion to $400 billion in terms of their economic effect. Ironically, that's about equal to the spending increase from Obama's 2009 initial stimulus package. In other words, we are about to extract from the economy - now showing multiple signs of weakening badly - the original spending stimulus of 2009!

As others have pointed out, that magnitude of spending contraction will result in 1.5 million to 2 million more jobs lost. That's also about all the jobs created since the trough of the recession in June 2009. In other words, the job market will be thrown back two years as well.


We're not moving forward. We're moving backward. The hand-wringing is all about the "debt crisis," but the national debt is not what has stalled the economy, and the crisis was not created by Social Security or Medicare, which are being set up to take the fall. It was created by Wall Street, which has squeezed trillions in bailout money from the government and the taxpayers; and by the military, which has squeezed trillions more for an amorphous and unending "War on Terror." But the hits are slated to fall on the so-called "entitlements" - a social safety net that we the people are actually entitled to, because we paid for them with taxes.

The Problem Is Not Debt But a Shrinking Money Supply

The markets are not reacting to a "debt crisis." They do not look at charts ten years out. They look at present indicators of jobs and sales, which have turned persistently negative. Jobs and sales are both dependent on "demand," which means getting money into the pockets of consumers; and the money supply today has shrunk.


We don't see this shrinkage because it is primarily in the "shadow banking system," the thing that collapsed in 2008. The shadow banking system used to be reflected in M3, but the Fed no longer reports it. In July 2010, however, the New York Fed posted on its website a staff report titled "Shadow Banking." It said that the shadow banking system had shrunk by $5 trillion since its peak in March 2008, when it was valued at about $20 trillion - actually larger than the traditional banking system. In July 2010, the shadow system was down to about $15 trillion, compared to $13 trillion for the traditional banking system.

Only about $2 trillion of this shrinkage has been replaced with the Fed's quantitative easing programs, leaving a $3 trillion hole to be filled; and only the government is in a position to fill it. We have been sold the idea that there is a "debt crisis" when there is really a liquidity crisis. Paying down the federal debt when money is already scarce just makes matters worse. Historically, when the deficit has been reduced, the money supply has been reduced along with it, throwing the economy into recession.

Most of our money now comes into the world as debt, which is created on the books of banks and lent into the economy. If there were no debt, there would be no money to run the economy; and today, private debt has collapsed. Encouraged by Fed policy, banks have tightened up lending and are sitting on their money, shrinking the circulating money supply and the economy.

Creative Ways to Balance the Budget

The federal debt has not been paid off since the days of Andrew Jackson, and it does not need to be paid off. It is just rolled over from year to year. The only real danger posed by a growing federal debt is the interest burden, but that has not been a problem yet. The Congressional Budget Office reported in December 2010:

[A] sharp drop in interest rates has held down the amount of interest that the government pays on [the national] debt. In 2010, net interest outlays totaled $197 billion, or 1.4 percent of GDP--a smaller share of GDP than they accounted for during most of the past decade.


The interest burden will increase if the federal debt continues to grow, but that problem can be solved by mandating the Federal Reserve to buy the government's debt. The Fed rebates its profits to the government after deducting its costs, making the money nearly interest-free. The Fed is already doing this with its quantitative easing programs and now holds nearly $1.7 trillion in federal securities.

If Congress must maintain its debt ceiling, there are other ways to balance the budget and avoid a growing debt. Ron Paul has brought a creative bill that would eliminate the $1.7 trillion deficit simply by having the Fed tear up its federal securities. No creditors would be harmed, since the money was generated with a computer keystroke in the first place. The government would just be canceling a debt to itself and saving the interest.

The Trillion Dollar Coin Alternative

The most direct solution to the debt problem is for the government to fund its budget with government-issued money. One alternative would be for the Treasury to issue U.S. Notes, as was done in the Civil War by President Lincoln.

Another alternative was suggested in my book Web of Debt in 2007: the government could simply mint some trillion dollar coins. Congress has the Constitutional power to "coin money," and no limit is put on the value of the coins it creates, as was pointed out by a chairman of the House Coinage Subcommittee in the 1980s.

This idea is now getting some attention from economists. According to a July 29th article in the Johnsville News titled "Coin Trick: The Trillion Dollar Coin":

The idea just started to get serious traction the last few days as the debt stalemate has grown more intense and partisan. Yale constitutional law professor Jack Balkin floated it as an option in a CNN op-ed yesterday (July 28th).

Today the idea has gone mainstream. It is covered by NY Magazine, CNBC, and The Economist. Even Nobel economist Paul Krugman of the NY Times has weighed in. Annie Lowrey of Slate discusses it as one of several gimmicks the government could use to resolve the debt-ceiling debacle. Krugman added:

These things [like coin seigniorage] sound ridiculous - but so is the behavior of Congressional Republicans. So why not fight back using legal tricks?


The debt ceiling itself was a legal trick, a form of extortion based on a century-old statute that conflicts with the Constitution. However, said the Johnsville News article, "coin seigniorage is not a scam. It is legal . . . . This plan looks like it might be Obama's ace in the hole . . . ."

The article cites Warren Mosler, founder of MMT (Modern Monetary Theory), who reviewed the idea in a January 20th blog post and concluded it would work operationally.

Scott Fullwiler, associate professor of economics at Wartburg College, also did a comprehensive analysis and concluded that the trillion dollar coin alternative was unlikely to result in inflation. Comparing it to Ron Paul's plan, he wrote:

This option is much like Ron Paul's proposal-actually identical in terms of the effect on the debt ceiling and the Treasury-except that his proposal would destroy all of the Fed's capital (and then some), which is a potential problem politically . . . though not operationally, and which the Fed is therefore very unlikely to agree to.


On the inflation question, just because the Treasury has money in its account doesn't mean it can spend the funds. It needs the usual Congressional approval. To keep a lid on spending, Congress just needs to be instructed in basic economics. They can spend on goods and services up to full employment without creating price inflation (since supply and demand will rise together). After that, they need to tax -- not to fund the budget, but to pull excess money back in and avoid driving up prices.

Spending More While Borrowing Less

In an economic downturn, the government needs to spend more, not less, as history shows. This can be done while still balancing the budget, simply by taking back the government's Constitutional power to issue money.

The budget crisis is an artificial one, and the current "solution" will only guarantee a deeper recession and more widespread suffering. Rather than obsessing over deficits and debt, the government needs to turn its focus to jobs, sales and quality of life.
------------------------
Ellen Brown is president of the Public Banking Institute and the author of eleven books. She developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, she turns those skills to an analysis of the Federal Reserve and "the money trust." Her websites are http://WebofDebt.com and http://PublicBankingInstitute.org.

Ellen Brown is a frequent contributor to Global Research.

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Thoughts About the Catfood II Super Congress Appointments

Jane Hamsher
Wednesday August 10, 2011
http://fdlaction.firedoglake.com/2011/08/10/thoughts-about-the-catfood-ii-super-congress-appointments/

1. There are no good choices for this commission. It is designed to protect members of Congress from the electoral repercussions of cutting Social Security and Medicare benefits, something that 82% of the country vehemently opposes. A full 60% of the country think the wars are responsible for the deficit, but the money for war will not be touched. The committee exists solely to impose the will of a small minority of oligarchical elites on the nation, and rob millions of Americans of the retirement insurance they have been faithfully and honorably been paying into their entire adult lives. The fact that the committee exists at all represents the breakdown of the social contract.

2. The US government is the largest contractor in the world. Lockheed Martin: $16.7 billion in 2010. Boeing: $10.5 billion. Hewlett-Packard: $2.3 billion. IBM: $1.8 billion. These companies spend millions each year bribing elected officials for for pennies on the dollar in exchange for these contracts. They do not want to be the one on the chopping block. Appointing the Chair of the DSCC to the committee — whose job is collecting campaign contributions on behalf of Senate Democrats — is like putting up a “for sale” sign. Democrats would be screaming bloody murder if John Cornyn were appointed. Greenberg-Quinlan-Rossner polling finds that the only message polling well for Democrats right now is “reducing the influence of lobbyists and money in Congress.” Way to go with the optics, Harry Reid.

3. Jon Kyl is the Senate Minority Whip. Kyl walked out of the Biden talks with Eric Cantor in order to force Obama to take ownership of the deal. Toomey is a member of the Tea Party who authored a balanced budget amendment and will vote for increased revenues when hell freezes over. Rob Portman is a former budget director under George Bush. Dave Camp and Jeb Hensarling are Catfood Commission I retreads. Fred Upton’s niece is a Sports Illustrated swimsuit model.

4. The Democratic House appointees will be meaningless. With three Democratic “grand bargain” Senate appointees, there is already a strong majority in favor of cutting Social Security and Medicare benefits.

3. None of these 6 Senators is up for reelection soon (Kyl is retiring), and the House members are in safe districts (notice no Paul Ryan). That exacerbates the anti-democratic nature of (1) above.

The only thing these committee members are going to respond to is is their fellow members of Congress who are up for reelection. They need to start telling them that they will be the ones will who bear the burden of whatever decision the committee makes, but they’re all in the throes of an austerity fit. They need to hear from you.

We’re running a new round of online ads on Facebook and Google targeted to voters in ey 2012 swing states. Some of these ads are about opposing the coming benefit cuts from the Super Congress, and joining our pledge to oppose anyone who votes for them.

Others are focused on individual members of Congress to pressure them not to vote for the Super Congress’ final recommendations, and let them know members know what the consequence will be in 2012 if they do.

Debt Deal for Dummies

From Salon.com:
Let's begin by taking note of three facts:

(1) Three days ago, Democratic Rep. John Conyers, appearing at a meeting of the Out of Poverty caucus, said: "The Republicans -- Speaker Boehner or Majority Leader Cantor -- did not call for Social Security cuts in the budget deal. The President of the United States called for that."

(2) The reported deal on the debt ceiling is so completely one-sided -- brutal domestic cuts with no tax increases on the rich and the likelihood of serious entitlement cuts in six months with a "Super Congressional" deficit commission -- that even Howard Kurtz was able to observe: "If there are $3 trillion in cuts and no tax hikes, Obama will have to explain how it is that the Republicans got 98 pct. of what they wanted," while Grover Norquist, the Right of the Right on such matters, happily proclaimed: "Sounds like a budget deal with real savings and no tax hikes is a go."

(3) The same White House behavior shaping the debt deal -- full embrace of GOP policies and (in the case of Social Security cuts) going beyond that -- has been evident in most policy realms from the start. It first manifested in the context of Obama's adoption of the Bush/Cheney approach to the war on civil liberties and Terrorism, which is why civil libertarians were the first to object so vocally and continuously to the Obama presidency, culminating in this amazing event from mid-2010: "Speaking at a conference of liberal activists Wednesday morning, ACLU Executive Director Anthony Romero didn't mince his words about the administration's handling of civil liberties issues. 'I'm going to start provocatively . . . I'm disgusted with this president,' Romero told the America's Future Now breakout session."

In other words, a slew of millionaire politicians who spent the last decade exploding the national debt with Endless War, a sprawling Surveillance State, and tax cuts for the rich are now imposing extreme suffering on the already-suffering ordinary citizenry, all at the direction of their plutocratic overlords, who are prospering more than ever and will sacrifice virtually nothing under this deal (despite their responsibility for the 2008 financial collapse that continues to spawn economic misery). And all of this will be justified by these politicians and their millionaire media mouthpieces with the obscenely deceitful slogans of "shared sacrifice" and "balanced debt reduction" -- two of the most odiously Orwellian phrases since "Look Forward, not Backward" and "2009 Nobel Peace Prize laureate"...

Democratic politics in a nutshell
Glenn Greenwald
Sunday, Jul 31, 2011
http://www.salon.com/news/opinion/glenn_greenwald/2011/07/31/democrats