Today’s One-Two Punch Of Jobs And Cuts

Dave Johnson

Today’s news was a one-two punch in the gut for the middle class. First, a terrible jobs report, then a Democratic President offers a budget that proposes cuts to Social Security and Medicare. The only thing on the public’s mind is that we need jobs — and the President comes out with a plan to cut Social Security and Medicare. Is he telling the public that cuts to Social Security and Medicare are necessary to restore the economy and fix the jobs crisis? Because whatever the administration thinks it is doing, that is what the public will hear.

President “Offers” Cuts On Terrible Jobs-Report Day

The news today… first this: NY Times, Hiring in U.S. Tapers Off as Economy Fails to Gain Speed.

American employers increased their payrolls by 88,000 last month, compared with 268,000 in February …

[. . .] The unemployment rate … ticked down to 7.6 percent in March, from 7.7 percent, but for an unwelcome reason: more people dropped out of the labor force, rather than more got jobs.

The labor force participation rate has not been this low — 63.3 percent — since 1979, a time when women were less likely to be working.

Then this: NY Times, Obama Budget to Include Cuts to Programs in Hopes of Deal,

President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say.

The President says he is offering these cuts because Republicans want them, not because he does. He says he is putting them in his budget to show that he is being “bipartisan” and “willing to negotiate” etc. He is putting them there in order to get “a long-term deficit-reduction deal.” He apparently believes that by offering up Social Security and Medicare cuts, Republicans will respond by offering up tax increases on the wealthy.

The President says he will only agree to these cuts only if Republicans agree to the tax increases. No tax increases means no cuts.

Never mind what the President is actually doing here — what does the public hear?

What The Public Hears

The President is saying he will only agree to cuts in Social Security and Medicare as part of a deal to raise taxes on the wealthy. No tax increase means no deal. But you can’t ask the public to understand that a President would offer up policies that he thinks are the wrong thing to do.

On this day of terrible jobs news every newspaper in the country has a story like this headline in my own: “Obama set to propose cuts to benefits.”

From the NY Times story,

Besides the tax increases that most Republicans continue to oppose, Mr. Obama’s budget will propose a new inflation formula that would have the effect of reducing cost-of-living payments for Social Security benefits, though with financial protections for low-income and very old beneficiaries, administration officials said. The idea, known as chained C.P.I., has infuriated some Democrats and advocacy groups to Mr. Obama’s left, and they have already mobilized in opposition.

Note that there are “protections” for low-income and very old beneficiaries — meaning the rest of us will not be “protected” from this. We will just be hit with it.

By offering cuts at a time when the economy is in the doldrums and the jobs situation is terrible the President is only reinforcing Republican propaganda. The public will think, “the President wouldn’t offer these cuts to these essential services unless these cuts are needed, would he?” Therefore many people will conclude that the President is saying cuts are needed to restore the economy when the opposite is true (otherwise why isn’t he stressing infrastructure and investment?) Many more will be forced to conclude that the Democratic Party is no longer the protector of Social Security and Medicare. These will be susceptible to Republican insistence that they are the party trying to save these programs.

Republican Response – No One Could Have Predicted!

No one could have predicted that Speaker Boehner would offer this in response,

“If the president believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes,” Mr. Boehner said. “That’s no way to lead and move the country forward.”

Republicans Will Campaign On This

In 2010 Republicans took back the House with a campaign claim that “Democrats cut $500 billion from Medicare.” My post, Half A Trillion In Cuts To Medicare documents just some of the ads Republicans hammered Democratic opponents with,

Republicans campaigned on protecting seniors from Medicare cuts. No way around it. In the 2010 election campaign Republican groups ran millions and millions of dollars of ads promising not to cut Medicare, and to increase Social Security. They campaigned against Democrats for “cutting $500 billion from Medicare” and not increasing Social Security cost-of-living. As a result, for the first time the senior vote went to Republicans.

2012, same thing. Romney was not successful with it, but “down-ticket” the claim that Democrats cut Medicare just hammered Democratic candidates.

So what is coming now for 2014? Republicans will obviously campaign on “President cutting another $400 billion from Medicare” AND “President cuts Social Security.” Wouldn’t you, if you were them?

Democrats will own this, regardless of whether they support it. The minute this budget is handed to Congress Democrats become the party of cutting Social Security and Medicare, and Republicans become the party of “saving these essential programs.”

President Offering Austerity

We are heading into a retirement crisis. The 401K experiment didn’t work. Companies have pulled back on pensions. And the squeeze that has been on regular people for decades means that people also do not have the savings they need to get them through old age. And all the money went to the top. The last thing the country needs is cuts in essential services for the elderly.

The President is offering austerity when there is no growth. By offering these cuts he is telling the public they are needed. The public isn’t going to get that this is some kind of bargaining gambit to get Republicans to agree to tax increases, they are going to get that the President is offering up Social Security and Medicare for cuts.

The President should not be proposing bad policies! He should be arguing the case for jobs, not cuts.

Click this: Tell Congress: Say No to Obama’s Social Security Cuts,

The President’s budget includes devastating Social Security cuts. But they will not become law if Congress rejects them. It’s up to us to speak out and let Congress know the public will punish any legislator that supports undermining Social Security. Use the form below to tell your Senators and Representative: Say no to Obama’s Social Security Cuts.

Call your members of Congress and your senators and tell them to hold firm on this. No cuts to essential programs like Social Security and Medicare!

And Fund The Fight To Save Social Security and Medicare

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