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We JUST had an election where the public (not to mention Every. Single. Poll.) overwhelmingly said no cuts to Social Security or Medicare, and raise taxes on income over $250K. That ought to mean something. But the “word” out of DC is that a deal is underway that cuts the Social Security COLA and increases the income level subject to a higher tax from $250K to $400K.
Senators and Representatives who are thinking of touching the “third rail:” How many constituents are calling your office today to say, “Yes, I want you to cut the Social Security COLA”?
Cutting Social Security makes no sense, and is bad politics because it hurts people. Old people depend on this meager benefit and by law Social Security can not contribute to deficits. But never mind the numbers, look at the social and political effects of a deal that cuts the Social Security cost-of-living-adjustment (COLA) immediately after the public voted not to do this.
The social effect: Does our society care about people, or just about money? Cuts in Medicare, Medicaid and Social Security hurt PEOPLE. Raising tax rates on the wealthy is just money. What does it tell the public about our society if their government cuts Social Security benefits immediately after we have an election in which the public overwhelmingly votes against cuts in Social Security or Medicare, and to increase taxes on $250K and up? This reported deal raises that $250K to $400K, reduces military cuts, and ignores that the same amount of money could be raised in ways that actually help the country and economy, like a Financial Transaction Tax.
Bankers got huge bonuses with government bailout money, and now you are cutting the meager benefits old people get? What does this tell the public, to cut this when one after another Democratic leader, including Vice President Biden, has stepped up to insist that Social Security is off the table? It tells the public not to trust their leaders, because the big money will win every time.
Talk about undermining “certainty” and “confidence.” Wow.
The political effect: Suicide. Seniors pay attention to the yearly COLA increase. Every single year from now on when the COLA is announced it is more than likely that seniors will believe they are getting a lower increase because President Obama and the Democrats betrayed them. This is human nature, they will think they would have gotten more (and Republicans will tell them they would have gotten more).
It will become folklore — conventional wisdom — that they would have received a much higher increase, except Obama and the Dems betrayed seniors.
Need to raise some money? Here are a few things you can offer instead of cutting the Social Security COLA:
- Financial Transaction Tax on speculative investments – a quarter of a penny per share.
- A BIG surtax on incomes over $10 million until the debt is paid off.
- Cut the military budget a lot more. Reagan doubled it and ‘W’ Bush doubled it again. The Soviet Union is gone.
- Get rid of oil company subsidies.
- Rebuild the nation’s infrastructure (with American-made materials) thereby employing millions who will then be paying taxes and won’t be getting assistance, and then our economy will be more efficient and competitive in the future.
- Retrofit (with American-made materials) our buildings and homes to be energy efficient, thereby employing millions (etc) plus our economy will have to spend less on energy from now on.
- Make companies bring home the money they are holding offshore, and pay the corporate tax on it.
- A thousand other ways to cut the deficit without hitting old people with the bill.
Now Please Read Richard Eskow’s Post
It seems like everything I try to say Richard Eskow succeeds in saying, and does so better than I ever could. (Seriously, read what he wrote about the CT shootings.)
Richard explains why this COLA-cut offer is a bad idea, in This Is Not America’s Deal,
This deal would make voters very unhappy. It reflects neither their wishes, their needs, or their values. They’ve already said so – to pollsters like ours and in the voting booth on Election Day. Instead of responding, this looks like another “insider deal” – another agreement that suggests the public’s values and concerns vanish once you cross the Beltway.
… The Republicans lost the last election – by a landslide, in fact, in both the Presidential and Senate races. They even lost the House — by more than 1.6 million votes. Only their gerrymandering, vote suppression, and billionaire campaign cash allowed them to retain control of that body despite a popular-vote defeat.
And only their outrageous abuse of Senate rules like the filibuster has allowed them to tie up that body and prevent it from doing its work.
Republicans lost because their ideas are unpopular. But this deal would turn those ideas into policy. This undemocratic ”Loser Take All” strategy will further alienate voters, while encouraging extremists in Congress to keep abusing the system.
… This deal would send the wrong message: that successful programs and policies – Social Security, Medicare, and progressive taxation – are problems to be fixed, not solutions to be implemented and strengthened. These programs reflect our finest values: fairness, self-sufficiency, and mutual support. And they work.
A deal like this would also distract the nation from the real sources of our economic difficulties – like wealth inequity, a shortage of good middle-class jobs, and the misdeeds of under-regulated banks and corporations.
No deal is acceptable that undermines our social contract — our common agreement to work together and help each other — as this one would. They’ve made us strong and prosperous and they must be protected.
PS If you really want to change the COLA formula, use a measurement that looks at the things old people actually spend their money on, like the cost of prescriptions or dental care. “Chained-CPI” doesn’t look at these things, so it would lower the COLA. An honest look at how the cost of living changes for old people would mean a higher COLA than now, not a lower one.