MORNING MESSAGE: 8 Deficit Reducers That Are More Ethical – And More Effective – Than the “Chained CPI”
OurFuture.org's Richard Eskow: "The “chained CPI” is being offered as part of a “deficit reduction” deal, even though Social Security is forbidden from contributing to the deficit. Even if you accepted this unreasoned act, it remains morally unacceptable to reduce spending on the backs of the elderly, women, the poor, veterans, disabled Americans, and the poor. … Here are eight solutions that will save more money - and really will reduce the deficit – without compromising either our ethics or our sense of fairness."
You can go here to tell President Obama: No deal that cuts Social Security, Medicare or Medicaid."
More Progressive Outrage Over "Chained" Social Security
Progressives in Congress express anger with White House (Politico): "The White House dispatched Legislative Affairs Director Rob Nabors to Capitol Hill on Tuesday to explain the proposal to House and Senate Democrats and try to assuage their concerns. Still, multiple lawmakers expressed deep concern about the direction of negotiations with less than two weeks left before Washington plunges off the fiscal cliff. “This should be off the table,” a visibly frustrated Rep. Jan Schakowsky (D-Ill.) told reporters. “I hope that offer … will be reconsidered.” Sen. Sherrod Brown (D-Ohio) was more blunt, calling the chained CPI proposal “terrible.” He said the existing inflation calculation was already insufficient.
"President Barack Obama has put Democrats in Congress in a tough spot politically," reports Reuters (via The Huffington Post). Democrats and progressives who helped re-elect Obama in November hoped new leverage gained from the win would prevent a repeat of that concession [to use a lower inflation index for calculating federal benefits] and had been warning the White House not to do so. Their hopes were dashed Monday night when the White House's latest offer in the budget talks included moving to the lower inflation index, which takes into account changes in consumer buying habits. … "There are better ways to achieve savings," said Democratic Representative Chris Van Hollen, a member of the House leadership from Maryland.
AFL-CIO President Richard Trumka blasts proposed "chained CPI" adjustment to Social Security benefits and House Speaker John Boehner's plan to limit tax increases to those earning more than $1 million. "House Speaker John Boehner’s recent “Plan B” proposal would extend tax cuts for people earning between $250,000 and $1 million, at a cost of $400 billion. At the same time, Republicans are demanding to cut Social Security COLAs through the so-called “Chained CPI.” We call on Congress to reject House Speaker Boehner’s proposal to extend tax cuts for people earning up to $1 million and support President Obama’s demand for at least $1.2 trillion in additional tax revenues."
Ezra Klein frames the issue (The Washington Post): "Let’s get something straight: “Chained-CPI” cuts Social Security benefits and increases taxes. That’s why it’s part of the negotiations. Full stop."
REMEMBER WHEN: White House said cuts in Social Security benefits should be off the table, and Vice President Joe Biden said "I flat guarantee you" that there would be no changes in Social Security.
Meanwhile in Congress, money for the military is being unchained. "U.S. lawmakers merged the competing House and Senate versions of the annual defense policy bill on Tuesday, approving a measure that authorizes $633.3 billion in defense spending for 2013, expands U.S. sanctions on Iran and strikes restrictions on biofuel use. The legislation passed by a conference committee of lawmakers from both chambers is expected to go to the full Senate and House of Representatives for a final vote this week before being sent to President Barack Obama for his signature. … The proposed base budget was $1.7 billion above Obama's request for defense spending in the 2013 fiscal year that began in October, the House Armed Services Committee statement said."
More Economic Pain
After Recession, More Young Adults Are Living on Street (New York Times): "Across the country, tens of thousands of underemployed and jobless young people, many with college credits or work histories, are struggling to house themselves in the wake of the recession, which has left workers between the ages of 18 and 24 with the highest unemployment rate of all adults. Those who can move back home with their parents — the so-called boomerang set — are the lucky ones. But that is not an option for those whose families have been hit hard by the economy …"
Beverly Mann in Angry Bear highlights a new report on child poverty, the 2012 National Child and Youth Well-Being Index. "So a major new research report released today detailing the breathtaking increase in child poverty and surprisingly broad-based decrease in several measurements of child welfare in the United States since 2000 is, or at least until Friday was, not really—or rather, not directly—about the children of idyllic Newton and upper-middle-class bedroom communities like it. But it is quite directly about huge swaths of other American children. And its revelations should play a central role in the outcome of what had been, until Friday, the major ongoing news story of the month: the “fiscal cliff” chess game."
The federal food aid program, SNAP, faces a cut in November 2013, warns Stacy Dean at the Center for Budget and Policy Priorities. "As policymakers deliberate over the “fiscal cliff” and calls are coming from some quarters for major cuts in the Supplemental Nutrition Assistance Program (SNAP, formerly called food stamps), they should take this into account: SNAP benefits are already scheduled to fall next November 1, when the 2009 Recovery Act’s temporary benefits boost ends. Any further cuts would come on top of these significant reductions and would cause further hardship. Benefits will decline for every SNAP household. For families of three, the cut likely will be $25 to $30 a month — $300 to $360 a year."
Reuters report asserts that "the federal government has emerged as one of the most potent factors driving income inequality in the United States - especially in the nation's capital." One factor: "A cadre of Washington professionals advanced their careers by pushing through personal income-tax cuts during the administration of President George W. Bush that redistributed nearly 2 trillion dollars nationally over the past decade, mostly to high earners." Another: "The government-outsourcing boom created new opportunity for entrepreneurs. It also hollowed out a class of federal jobs that once provided entry to the middle class for people without college degrees in the region."
Bad News Ahead For Workers
Two million will lose jobless benefit if Congress fails to act (McClatchy): "As the “fiscal cliff” approaches … 2.1 million Americans … stand to lose their federal jobless benefits at the end of December unless Congress extends the Emergency Unemployment Compensation program.Failure to do so would leave of millions families unable to pay for their homes, health insurance, automobiles and utilities while they continue looking for work in the sluggish job market."
Amazon contractor aggressively pushes denial of unemployment claims of laid-off workers. (The Huffington Post, via The Morning Call): "The company responsible for staffing a Pennsylvania Amazon warehouse is fighting to keep some former workers from getting their unemployment benefits, but that hasn't stopped the company's CEO from enjoying a few of the finer things in life," such as "a beach house and a BMW."
Economist Nouriel Roubini predicts anemic growth in 2013. "Nouriel said that U.S. growth would barely register 1.7% in 2013 and pointed to a high risk of the U.S. going over the fiscal cliff: “If we do so, the market reaction is going to force the two sides to reach an agreement.”"
Breakfast Sides
The Huffington Post is tracking where senators stand on filibuster reform.
Neil Barofsky meets with Occupy Wall Street, writes Yves Smith. "One of his major themes was that the unwillingness to mete out meaningful punishments to miscreant banks means that the authorities are providing incentives to engage in criminal activity. It’s now more profitable to break rules than abide by them."
William K. Black blasts the Justice Department's handling of the HSBC fraud case. "In this column I simply ask reporters to ask DOJ a line of questions. The primary question is whether HSBC, as part of its "immediate, full cooperation" committed to providing full assistance to the U.S. and the U.K. in detecting, investigating, and prosecuting tax evasion involving HSBC. Tax fraud, of course, is simply an example of the many kinds of fraud that HSBC aided or committed in addition to the three forms of felonies that were the subject to the settlement (money laundering, evading sanctions on nations (e.g., Iran), and evading sanctions on terrorists groups)"
"Sandy Hook shooting's glare illumines cracks in mental health care," reports Christian Science Monitor. "Just a day after the shooting, when very few details were known about Lanza, blogger Liza Long published a piece about her own experience with a mentally ill son that quickly went viral. Titled “I am Adam Lanza’s mother,” her blog was an impassioned plea for more discussion of mental illness and for more options and support for families, like hers, that struggle with it."
Gay rights bill inches forward in Congress. "Two Republican House members signed [onto] a bill on Friday that would allow same-sex couples equal rights as heterosexual ones for immigration purposes. … Reps. Charlie Dent (R-Pa.) and Richard Hanna (R-N.Y.) joined Sen. Susan Collins (R-Maine) and 145 Democratic lawmakers in support of the bill, called the Uniting American Families Act."
