The Coming Plan to Slash Social Security and Medicare

[Joanne98]

The Flight of the Deficit Hawks
By DEAN BAKER

The deficit hawks are going into high gear with their drive to cut Social Security and Medicare. President Obama’s deficit commission is having a big public event on Tuesday in which many of the country’s most prominent deficit hawks will tout the need to reduce the budget deficit. The next day, Wall Street investment banker Peter Peterson will be hosting a “summit on fiscal responsibility,” which will feature more luminaries touting the need to get deficits under control.

What will be missing from both of these events is any serious debate on the extent of the deficit problem and its causes. These affairs are not about promoting a real exchange of views on issues like the future of Social Security, Medicare, and public support for education, research and infrastructure. The purpose of these events is to tell the public that everyone agrees, we have to cut the deficit. And, this means cutting Social Security and Medicare. This is argument by authority.

Many public debates in the United States take this form. The issue is not what is said, but rather who says it. A few years ago all the authorities said that there was no housing bubble. The large body of evidence showing that house prices had hugely diverged from the fundamentals did not matter when the chairman of the Federal Reserve Board, the President’s Council of Economic Advisors and other leading lights of the economic profession insisted that everything in the housing market was just fine.

Going further back to the mid-90s, many of this same group of deficit hawk luminaries tried to use argument by authority to cut Social Security. They came up with the story that the consumer price index (CPI) overstated the true rate of inflation. After workers retire, their Social Security benefits are indexed to the CPI. This crew (which included then Sen. Alan Simpson, a co-chair of President Obama’s commission, and Peter Peterson) argued that Social Security benefits should lag the CPI by 1.0 percentage point a year. In other words, if the CPI shows 3.0 percent inflation, then Social Security benefits will only rise by 2.0 percent.

That may seem a small cut, but it adds up over time. A worker retired for 10 years would have their benefits reduced by approximately 10 percent. A worker retired for 20 years would have their benefits cut by almost 20 percent.

To push this agenda, they put together a panel of the country’s most prominent economists, all of whom blessed the claim that the CPI overstated the true rate of inflation by at least 1.0 percentage point. In addition to this panel, the Social Security cutters also pulled in other prominent economists, including Martin Feldstein, formerly President Reagan’s top economist and the head of the National Bureau of Economic Research.

http://www.counterpunch.org/baker04282010.html

[newfie11]

1. but but what about cutting 2 wars!!!n/t

[shraby]

2. I don't see where they also want to tie it to the congressional

cost of living raise each year...guess that would get in trouble fast.

[OHdem10]

3. Evan Thomas on Charlie Rose--I am a Deficit Hawk. Will Obama

be willing to raise taxes and cut SS and Medicare???

Evan Thomas is not exactly an Obama fan. Does not
see him as a "strong leader".

However, I have heard more than one person send the'
same message --raise taxes and cut SS and Medicare.

If we had a serious Media they would ask every Republican
running for office.---In order to fix the deficit are
you willing to raise taxes as well as cut Medicare
and SS???

The GOP are not credible when they scream about the deficit
and only want tax cuts.

[indepat]

4. The deficit issue must be tackled eventually and it should be abundantly clear to all that:

the MIC and pre-emptive wars will continue to be fully funded; most highly profitable US-based large corporations will continue to pay little or no US income taxes; tax havens will still abound for the uber-wealthy; Warren Buffett will continue to pay a smaller percentage of his income to Uncle Sam than will his secretary; all meaning social security and Medicare will take a big hit. See, that was easy. :-)