How Bad Is Obama's Deal With Boehner?

Mark Takano is one of the new progressive congressmen just elected from California. A longtime progressive from Riverside County, he's not going to be a rubber stamp for Obama in the Grand Bargain with Boehner to balance the budget on the backs of working families. It's because of freshmen like Takano that Obama is trying to get this dirty business done before the end of the year and before the new freshmen get a chance to vote on it. He would much rather have conservative lame ducks going off to work as lobbyists, like Heath Shuler, Mike Ross and Larry Kissell, than principled champions of working families like Takano, Alan Grayson, and Carol Shea-Porter voting on his scheme. “As I’ve been preparing to come to Washington," said Takano after Obama announced hos he and Boehner planned to gut Social Security by crippling the cost of living adjustments, "I’ve kept a close eye on the ‘Fiscal Cliff’ negotiations that are underway between President Obama and Speaker Boehner. Recent reports have indicated that while Speaker Boehner has conceded that tax rates will increase for the wealthiest Americans, there is significant discussion about reforming key entitlement programs. During my campaign, I told the voters that I would  oppose any cuts or fundamental changes to Medicare, Medicaid and Social Security and I continue to stand by that.  We shouldn’t be using a budgetary crisis, created by Republican obstructionism, to undermine the promise we’ve made to our seniors. We cannot balance the budget on the backs of the America’s most vulnerable citizens.”

Many American have never heard the phrase "chained CPI" before and they are unsure how the whole progressive movement has turned on Obama so quickly because of it. Raul Grijalva (D-AZ), co-chair of the Congressional Progressive Caucus helped to explain it:

“Federal law has always prohibited Social Security from contributing to the deficit. Any talk of shrinking the program to ‘save money’ is flawed from the start because Social Security is not part of the national budget in the same way as military spending-- it’s paid for through a dedicated payroll tax separate from general budgeting.

“Some have suggested that Social Security benefits should be based on a chained Consumer Price Index (CPI), which assumes that when the price of one item rises, people buy something else-- no matter how popular or necessary that original item might be. If this change goes into effect, Social Security benefits would stop reflecting the rising prices of popular goods.

“The average Social Security recipient rakes in a whopping $13,000 a year. If we pass chained CPI, projected annual cuts for a typical retiree would be about $560 a year by age 75, $984 a year by age 85 and $1,400 a year by age 95.

“The less money our Social Security recipients-- including 9 million veterans-- are able to spend, the less money goes to the businesses that create jobs. Chained CPI makes life harder for millions of retirees, weakens Social Security and doesn’t reduce the deficit by a penny. It’s a Beltway fig leaf that I will never support, and I call on my colleagues to make their feelings known as soon as possible before this becomes yet another piece of conventional wisdom that makes things worse.

“Lifting the cap on high earners paying into Social Security is a real fix that would make the program solvent indefinitely. If we want to talk about solutions, let’s talk about that, not inventing reasons to take money from American retirees.”

And Grijalva's co-chair, Keith Ellison (D-MN) explained what the impact of this move-- which is meant to save the wealth from paying their fair share of taxes-- on ordinary American retirees. “Everyone has a grandparent, a friend or a neighbor who relies on the Social Security benefits they earned to pay for medical care, food and housing. A move towards chained CPI would be a long-term benefit cut for every single person who receives a Social Security check. The current average earned benefit for a 65 year old on Social Security is $17,134. Using chained CPI will result in a $6,000 loss for retirees in the first fifteen years of retirement and adds up to a $16,000 loss over twenty-five years. This change would be devastating to beneficiaries, especially widowed women, more than a third of whom rely on the program for 90% of their income and use every single dollar of the Social Security checks they've earned. This would require the most vulnerable Americans to dig further into their savings to fill the hole left by unnecessary and irresponsible cuts to Social Security. I am committed to standing against any benefit cuts to programs Americans rely on and tying Social Security benefits to chained CPI is a benefit cut."

Although Nancy Pelosi, sadly, on the wrong side of history, said she will round up plenty of the Democratic votes Obama and Boehner need to pass their poisonous Frankenstein Monster of a "compromise," many of his most important leaders refuse to go along with the betrayal. John Conyers (D-MI), one of the Democrats most respected senior leaders:

Despite clear evidence that the American people support balancing the deficit by requiring the wealthy to pay their fair share in taxes, Speaker Boehner announced a plan today that would allow millionaires to keep their tax cuts.

This so-called ‘Plan B’ is not a balanced approach to deficit reduction and it should be rejected.

 I resent that Speaker Boehner has chosen to put cuts to Social Security benefits for current and future retirees on the table as a way to resolve the budget crisis.

 The change in the way Social Security calculates yearly cost-of-living-adjustments, called ‘Chained CPI,’ would place an increased  burden on elderly Americans-- nearly 70 percent of whom rely on Social Security for more than half of their income and whose benefits average less than $15,000 per year.  Under this proposed policy, benefits would be cut by 0.3 percent annually and would increase over time.  As a result, the older and poorer a beneficiary becomes, the larger the benefit cut.

The fact that Republicans would seriously consider cutting the current and future Social Security benefits of all Americans to benefit the wealthy few is unconscionable and unacceptable.  We cannot ask our seniors and the most vulnerable to bear the burden of deficit reduction.

If Congress were to pursue this unwise course of action, we would not only be embracing a deeply unpopular policy, but also ignoring the will of the American people. A recent poll by Hart Associates in the days before the November election found that an overwhelming 84 percent of Americans said they did not want their Social Security benefits cut. 104 House Democrats have also already stated their opposition to including Social Security in any deficit reduction package.

"Any debt deal that cuts Social Security, Medicare, or Medicaid benefits is unacceptable.

If House Democrats are unhappy, Republicans are exultant over having rolled Obama once again-- and perhaps having made it possible to put a permanent wedge between the Democratic Party and their grassroots base.

Speaker John Boehner (R-Ohio) told House Republicans on Tuesday he will move to a “Plan B” on the fiscal cliff by having the House vote on legislation to extend tax rates on annual income under $1 million.

The bill would allow tax rates on annual income above $1 million to rise from 35 percent to 39.6 percent, but make permanent lower rates on income below that threshold, Boehner’s office said.

The move sets up a momentous challenge for the Speaker, as he seeks to build support for legislation that only months ago House Republicans considered an unacceptable tax increase.

...House GOP leaders told lawmakers later on Tuesday there would be two floor votes, aides said. The first would provide a one-year extension on rates for family income up to $250,000, mirroring the original Democratic position. The second would be Boehner’s proposal with the $1 million threshold, with additional provisions for the Alternative Minimum Tax, the estate tax and investment taxes.

House Republicans said they expected that the Senate would amend any bill the House passed and send it back to the lower chamber, meaning the House bill could serve as a legislative vehicle for a final agreement.

But the White House and Senate Majority Leader Harry Reid (D-Nev.) swiftly rejected Boehner’s move, and House Democrats said they would whip their members to oppose it, challenging the Speaker to round up 218 votes to pass a tax increase on his own.

“Today, House Republicans have threatened to abandon serious negotiations,” Reid said. “Boehner’s proposal will not pass the Senate.”

With Boehner’s latest proposal, the post-election shift in bargaining positions has come full circle: Republicans are now the ones rhetorically pleading to protect all but the wealthiest taxpayers.

In the hours after Boehner pitched his “Plan B” to the House GOP, his aides sought to corner Democrats by pointing out that top Democrats, including House Minority Leader Nancy Pelosi (Calif.) and Sen. Charles Schumer (N.Y.), have previously expressed support for extending tax rates.

But a Schumer spokesman said things changed with the reelection of President Obama, who campaigned on a pledge to raise tax rates on annual income above $250,000 but moved to $400,000 this week.

...[T]his would be the first time Boehner would ask his members to vote for a tax increase, and it was unclear whether Republican leaders could even pass their bill through the House without Democratic support.

“It’d be a bit of a stretch,” Rep. Phil Gingrey (R-Ga.) said. “Good whip team. I just don’t know for sure.” Gingrey said he was undecided on how he would vote.

The conference meeting was a sobering reality check for House Republicans who have opposed tax rate hikes at every turn, and many lawmakers walked grimly past reporters without commenting.

“We’re having a frank conversation about where we stand, what are the realities of our negotiating position,” freshman Rep. Sean Duffy (R-Wis.) said. “There wasn’t applause. There wasn’t outrage. People are just absorbing, you know, what the Speaker is saying.”

Other members described a spirited discussion in the room and division within the conference about how to proceed.

“The Speaker laid out the plan in a very compelling way, and there’s just a lot of hard thinking going on,” conservative Rep. Trent Franks (R-Ariz.) said. “I’m going to let the Speaker have as much latitude as he needs to try to negotiate with this president.”

Jeff Merkley (D-OR) will work to help prevent this shameful bill pass the Senate and help prevent Obama from going down in the history books as the mediocre president who destroyed the Democratic Party brand once and for all. “We had an election," said Merkley, "and the voters sent a message to Congress to focus on jobs and fairness-- not cutting benefits for people who have worked all their lives and are now making ends meet on fixed incomes. The formula we use to adjust cost-of-living changes for seniors needs to reflects the real costs they face, not the budgetary fantasies of Washington.”

And Jerry Nadler (D-NY) will be working against the plan in the House. Obama must have understood who he was talking about when he issued this statement, even if it only refers to "Republicans." Nadler: “Social Security is one of the bedrocks of our middle class society and is an essential safety net for millions of American seniors and their families. Millions and millions of Americans rely on Social Security benefits for medical care, food, housing, and other essentials. We cannot allow a move toward chained CPI that would result, over time, in substantial cuts in benefits.

 “We must not force our senior citizens to dig further into their savings to fill the hole left by unnecessary and irresponsible cuts to Social Security. It is unconscionable for Republicans to ask seniors and others who can least afford it to sacrifice even more in order to continue giving tax cuts to the wealthiest Americans. I do not support any deal that cuts Social Security, Medicare or Medicaid benefits.”

Will there be enough congressmen with the integrity and courage of the ones like Nadler, Grijalva, Schakowsky, Takano, Merkley, Conyers, Ellison and the others who are coming forward and telling Obama "no" or will Washington's Conservative Consensus grind the nation's retirees into the mud while the political elites and the wealthiest 1% toast their victory?