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Monday, January 14, 2013

What's it going to be: Social Security or Defense? (Updated)

Update: As I write these words, Obama is giving a news conference on the debt ceiling. He is saying many of the right things, but he refuses to state outright that cuts to Social Security and Medicare are off the table. Given the man's slippery language in the past, I hope some reporter compels Obama to be (as a previous president might have put it) perfectly clear.

I also hope that public pressure can force him to address raising the Social Security cap and allowing Medicare to negotiate lower drug prices. These are easy solutions that will not make life difficult for the most vulnerable among us.

And now, back to our original post...

*  *  *

The House is preparing to shut down the government in order to force Obama to cut "spending." That means they're coming for your Social Security.
The idea of allowing the country to default by refusing to increase the debt limit is getting more widespread and serious traction among House Republicans than people realize, though GOP leaders think shutting down the government is the much more likely outcome of the spending fights this winter.
Unfortunately, we're not talking about a mere temporary shutdown, which would be grim but endurable (and, in the end, helpful to Dems). The debt ceiling is a different animal. Although the debt itself -- that is, interest owed on money already borrowed -- will continue to be paid, interest rates will rise and stock markets around the world may crater if we default on our other obligations.

That's the apocalyptic shock the Republicans want, in order to force an end to Social Security and Medicare.

That's the Republican goal, and never forget it.

That's the reason why we're seeing stories like this one, which exist to soften up the average citizen's psychology. They want you to believe that the "entitlement era" is coming to an end due to one of those grand, miasmic historical movements that have neither form nor origin point. So just shrug your shoulders and say whatcha gonna do? -- and for God's sake, don't blame Social Security's demise on right-wing ideologues, on actual people with names and addresses who have been working tirelessly to dismantle the system.

The Republicans have all the advantages, now that Obama has nixed the trillion dollar coin idea.
In his own proposed budget for 2013, Obama proposed deep cuts in domestic spending, even without this deal. In Obama's own budget, discretionary domestic would fall from 5.8 percent in 2009 to 3.1 percent in 2011 and just 1.8 percent in 2018. He proposes to spend less on education than George W. Bush did. And this is just the starting point from which Republicans will demand further cuts.
Try telling those facts to the next Republican who blathers on about how this president is a huge spender. Then again, don't bother. Unwelcome facts do not penetrate the conservative cranium.

In my view, now is the time to push for these goals:

1. We can solve the Social Security "crisis" painlessly by raising the cap. Obama, to his credit, has discussed this option. Obama, to his discredit, did not mention this option when it counted, during the fiscal cliff drama.

2. We can cut Medicare costs by allowing for the negotiation of drug discounts. Candidate Obama liked the idea; President Obama never talks about it. (Al Franken introduced such a bill in the Senate.)

3. We can return to the era of taxing stock trading. A tiny tax on all trades will add up to big numbers, and will have the added benefit of reducing computer-driven mischief. The Wall Street Journal hates the idea, which is the best possible argument in its favor.

4. We can return the Defense budget to the pre-9/11 levels. The graphs below (both from Wikipedia) tell the story.

When pundits decry our deficit, why do they never point to the obvious culprit? Returning our military to Clinton-era levels -- levels which, at the time, liberals considered bloated -- would reduce the budget by $4 trillion dollars over a decade, and would still keep us well ahead of all other nations.

The great un-discussed scandal of the Obama era is the rise in military spending even as the wars have wound down. Look again at the upper chart. Instead of telling Grandma to polish her resume, wouldn't you rather lop off the blue and red parts of those upright bars?
There are some other suggestions for the US economy to add to your list.

Since 1975 US worker productivity has increased by 100% while their wages have actually declined in real terms (see here and here). That's the main reason why people are poor. A major impetus to the economy should be a national wage rise to say $10/hr minimum.

A second strand would be to attack the loss of revenue base by banning corporate tax havens or by imposing a higher tax rate on US companies that refuse to repatriate their profits to the US. Basically, force them to bring their capital back home to be invested in the domestic economy -- or at least their foreign profits. There'd be a lot of corporate screaming but why should the likes of Apple be allowed to exploit low offshore wages, hide all their profits from the US taxman and still pretend they are a US company.
Romney spoke for the MIC and a certain CW around DC when he described Obama's mild reduction in the baseline growth of military spending as decimating that budget and leaving our safety as a nation at risk.

If Obama were to call for ACTUAL cuts, not simply reductions in baseline growth, Romney's nonsensical Henny Penny routine would become more plausible and many Democrats in Congress would join in.

Only a Bush Sr. and his DOD chief Cheney are allowed to propose and pass significant real military cuts, and even then, Clinton, in executing that Quadrennial Review plan, was savaged as a near-traitor for its implementation.

Whatever its merits, this suggestion is a non-starter for Obama, and not only wouldn't be done, but would damage him and his second term agenda by his merely proposing it. I state this with regret.

Wasn't it Rummie who envisioned a leaner, lighter military force?

I worked in Corp America when it was phat, I mean truly fat when money was cheap, and the perqs flowed like heated honey.

All that changed in the 2000's, except for military contractors. I happen to know it's still al honeypot.

In re: the update:

I predict that if/when Obama proposes saving money on Medicare D by bargaining on prescription drug pricing, it will be characterized, yes, as 'cutting Medicare.'

Insanely characterized, of course, and the counter-characterization of 'bargaining for a better price' is so easily understandable that it will even (likely) work in our untutored populace. So the critics will have to dress up their false complaint into one of 'rationing' or 'class warfare/anti-corporatism' against Big Pharma.

But they will try. Luckily, they have an unsympathetic defendant, for once.

The fact that neither pseudo-faction of the Uniparty has even mentioned a securities transaction tax is a pretty clear indication of their real constituency.
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