Obama Under Pressure on Entitlement Cuts
President Barack Obama meets with Treasury Secretary Timothy Geithner and National Economic Council Director Gene Sperling in the Oval Office. (Official White House Photo by Pete Souza)
WASHINGTON – Yesterday, the Financial Times laid out what has been talked about for months and months, with Pres. Obama set to deliver a speech on deficit reduction on Monday.
The FT begins with the argument of how the U.S. government measures inflation, which would deliver “a less generous chained-consumer price index,” to quote FT.
Today the White House pushed back, with stories in the Washington Post and the WSJ reporting Pres. Obama will not tinker with Social Security.
The problem for Pres. Obama is that he’s already floated these ideas, so whether he does it on Monday or not it’s in the political water, bolstering the Right’s passion for pulverizing the U.S. social safety net.
The last time President Obama negotiated with Republicans about overhauling the nation’s social safety set, he put several significant and politically explosive proposals on the table.
This time, it may be different.
As Obama prepares to present Congress on Monday with a detailed plan for taming the nation’s debt, a pivotal question is whether he will again propose raising the Medicare eligibility age from 65 to 67 and propose cuts in Social Security benefits.
Over the objections of members of his party, the president had agreed to those changes as part of an unsuccessful effort to strike a debt deal this summer with House Speaker John A. Boehner (R-Ohio). But Obama’s aides say the plan being released Monday would not represent that sort of compromise.
The idea to reinvent how we calculate inflation when it comes to Social Security would devastate elderly women, as I’ve written before.
Research from IWPR has shown the current Social Security program is a mainstay for women, and these findings have been supported by research from other organizations. Adult women are 51 percent (27 million) of all beneficiaries, including retirees, the disabled, and the survivors of deceased workers (52.5 million). Women are more likely to rely on Social Security because they have fewer alternative sources of income, often outlive their husbands, and are more likely to be left to rear children when their husbands die or become permanently disabled. Moreover, due to the recession many women have lost home equity and savings to failing markets. Older women—and older low income populations in general—have become more economically vulnerable and dependent on Social Security benefits. – IWPR
To give you an idea of the story framing at FT, they call Medicare and Medicaid “large government healthcare schemes for the elderly and the poor.”
As for Social Security, we just learned that according to the U.S. Census the only group not being dragged into poverty in the Obama era is senior citizens. There’s only one reason why, but our Democratic President thinks it’s time to “reform” their reality.
Soaring Poverty Casts Spotlight on ‘Lost Decade’
… Arloc Sherman, a senior researcher at the Center on Budget and Policy Priorities, said that the period from 2001 to 2007 was the first recovery on record where the level of poverty was deeper, and median income of working-age people was lower, at the end than at the beginning.
“Even before the recession hit, a lot of people were falling behind,” he said. “This may be adding to people’s sense of urgency about the economy.”
The suburban poverty rate, at 11.8 percent, appears to be the highest since 1967, Mr. Sherman added. Last year more Americans fell into deep poverty, defined as less than half the official poverty line, or about $11,000, with the ranks of that group increasing to 20.5 million, or about 6.7 percent of the population.
Poverty has also swallowed more children, with about 16.4 million in its ranks last year, the highest numbers since 1962, according to William Frey, senior demographer at Brookings. That means 22 percent of children are in poverty, the highest percentage since 1993.
Too bad the poor and children don’t squawk as loud as seniors, aren’t represented by AARP, but also don’t vote in as large numbers.
It’s funny how Republicans and now even Democrats are so courageous about putting the people’s safety net on the block, but these same politicians turn yellow when it comes to making real choices about military overspending, extravagance and waste, as if our military footprint around the globe isn’t a huge part of our economic problem.
Regardless of the White House reportedly backing off on previous Social Security cuts reform trial balloons, Pres. Obama and his team are still determined to begin changing entitlement programs. It may work for the White House, however, because given the crazy Republican ideas on these programs, raising the retirement age on Medicare over time sounds “moderate,” in comparison. He may seduce Independents and moderate Republicans with this tactic, but considering Obama’s bleeding Democratic and progressive enthusiasm, see the outcome from NY9 that I warned about before it happened, the results could be negligible.
But I’m reasonable.
So, I can be convinced to make serious entitlement reform, but something else has to happen first.
Get out of Iraq and begin a much more rapid withdrawal from Afghanistan, because Bin Laden is dead and Al Qaeda is scattered and broken apart; at the same time redeploy our troops from Germany and Okinawa, for starters, with an assessment begun by a committee filled with national security, military and Pentagon busting experts (like Winslow Wheeler) not currently attached to the Pentagon or having lobbyist ties, to ascertain the other countries from which we can remove U.S. forces, based on U.S. strategic interests.
Do all of these things then come to me and ask about entitlement cuts reform.
Taylor Marsh is a Washington based political analyst, writer and commentator on national politics, foreign policy, and women in power. A veteran national politics writer, Taylor’s been writing on the web since 1996. She has reported from the White House, been profiled in the Washington Post, The New Republic, and has been seen on C-SPAN’s Washington Journal, CNN, MSNBC, Al Jazeera English and Al Jazeera Arabic, as well as on radio across the dial and on satellite, including the BBC. Marsh lives in the Washington, D.C. area. This column is cross posted from her blog.
12 Responses to “Obama Under Pressure on Entitlement Cuts”
You know, it amazes me how the Republicans go on about the glorious risk taker entrepreneur and how they need protection, but fail to mention what happens to those whom risk and fail. Some people are struggling to live off of $450 a month Social Security entitlement. How the heck are we going to cut from that? It’s one thing to ask people to sacrifice for their country, but the Republicans want the poor to sacrifice directly for the rich, in the name of the country.
If something can’t go on forever, it will stop. The surest way to actually kill Social Security (the umbrella), is to leave it untouched until only the most drastic options are left.
It’s one thing to ask people to sacrifice for their country, but the Republicans want the poor to sacrifice directly for the rich, in the name of the country.
You are so right, Allen.
Social Security does *not* add to the deficit. It’s also solvent for decades forth.
Pres. Obama was wrong when he appointed the “deficit commission,” beginning with Mr. Simpson who’s wanted to gut SS for years. The ideas from Mr. Bowles aren’t any better.
@Taylor
It’s hard to have a discussion when the terms keep changing. When people say “Social Security”, they typically include the umbrella of add-ons like Medicaid, Medicare, and SSI. That umbrella is NOT funded for decades forth.
Prof-
Simple, so just fund it.
Problem solved.
Please, no applause ladies and gentlemen, no no really you are too kind, no applause, please…no applause, no no no no flowers either…oh thank you but no….no more please…..
@Allen
Great idea. Let’s just pass a law that will automatically raise payroll taxes as needed to fund the current system. You’ll get the funding that you want, and I’ll get to watch liberals try to explain why skyrocketing taxes on the poor and middle class are a good thing.
Prof-
No. That is not necessary. Eliminate 50% of the defense budget and raise taxes on those incomes above $200,000. Eliminate all corporate tax incentives/loopholes and stop all federal grants for three years.
Excellent post Taylor. A great many of the people who depend on social security don’t have other options. Someone who has worked 40 years of his or her life, meaning actual physical work, might well be too worn out to continue working another another ten years, which doens’t mean that someone with a strong work ethic might not continue trying to (to their detriment). Social Security is one of the great achievements of our country and one that has demonstrated how it was possible for us as a society to get our priorities right now and then. It needs to be funded properly and honesty and not lied about by politicians and pundits either. The fundamental question that arguments about SS really go to is this one: What kind of people are we?
OK. So the current CPI index results in SS benefits are increasing over time, not just keeping pace with inflation. I don’t think that is reasonable, given our demographics. It needs to change.
I support a two tiered SS system. We should be raising the retirement age for white collar workers, but not for people who do hard physical labor for a living. People are living longer and healthier. They should be working longer, unless it is the kind of labor an older person can not physically do.
Further, the projected costs for Medicare are skyrocketing. True, the reforms in Obamacare have helped to flatten the curve some, but we are genuinely in danger of having medicare costs consume the entire federal budget over time. IF we just keep funding it, without changing it, then it will impoverish everyone BUT seniors. Is that just? Should old, dying people receive extremely expensive care giving them a little bit of extra life, at the expense of a child’s food aid, a student’s Pell grant, enforcement for clean air and water, farm insurance, roads, highways, basically the infrastructure that supports us all? No.
Wow, would your system require a lot of new systems to put a person in the right pigeon hole. Extensive job background checks to see if this guy just became a gardener after 40 years as a hedge fund partner (he got laid off).
And by all means lets judge if an American Stephen Hawking gets the bums rush along with some elderly Nobel Prize winners (cancel that one). You may have solved part of the jobs program, they will need a lot of folks from the medical, financial and legal field.
Depending on where it gets changed (apparently, it’s not broke enough to change now), I see it either becoming means tested, or turning into straight out disability insurance. In other words, people will work until they can’t. Physical jobs, by their nature, would become impractical first.
Until genetically engineered drugs change all of that.
“Physical jobs, by their nature, would become impractical first.
Until genetically engineered drugs change all of that.”
People with the physical jobs probably couldn’t afford the genetically engineered drugs. Catch 22.