Will the GOP's refusal to compromise help stop chained CPI?

President Obama has officially released his fifth annual budget. Once again, the president has put forward a mix of infrastructure spending, investments in education and research, and a plan for additional deficit reduction. Unlike previous budget plans, however, this new proposal offers cuts to Social Security and Medicare, in an attempt to bring Republicans to the negotiating table.

President Obama's plan would reduce the deficit by $1.8 trillion over 10 years, through a mix of spending cuts and revenues. The plan includes $580 billion in new taxes on the wealthy, $200 billion in defense cuts, $600 billion in reduced subsidies and unemployment, and an estimated $230 billion in savings from the so-called chained CPI. That's the reduction in cost-of-living adjustments that will reduce benefits for recipients of Medicare and Social Security.

By including the chained CPI in his budget, President Obama has infuriated many in his own party. And Republican leaders refused to consider any additional tax increases before the President even released this budget. A senior White House administration official said, “If they refuse to include revenues in any deal, then there will be no deal. It's that simple.”

The last time the Administration proposed chained CPI – during the fiscal cliff negotiations – Republican opposition to tax increases prevented it from cutting benefits on seniors. The question now is, will Republican's give in to revenues now, to achieve their goal of destroying our social safety net?

We must not let that happen. Call Congress and the White House today and tell them to take Medicare and Social Security off the chopping block.


don0's picture
don0 11 years 10 weeks ago

Just an aside re Deborah Skinner:

She cannot remember her first two and a half years (how many of us can?)

She utterly rejects she was raised in a box, was unloved, went crazy. For what it is worth:


Welcome back and thanks for everything you do.

Don Davis

DRichards's picture
DRichards 11 years 10 weeks ago

How long will it take for Progressive Democrats to acknowledge that Obama is a conservative democrat (a wolf in sheep's clothing if you will)?


dddfaber's picture
dddfaber 11 years 10 weeks ago

I believe Obama is more than well aware that the GOP will not give in to increased revenues and will never, never accept his budget. I think that Obama, rather than being a conservative democrat (though I do believe he is very moderate), is actually a skilled politico, using the GOPs intransigence against them. Again, he looks reasonable, they look obstructionist. Boehner absolutely cannot pull together enough votes to accept this plan, period. While it seems a bit Machiavellian to me, I'm not losing any sleep over this ploy.

DAnneMarc's picture
DAnneMarc 11 years 10 weeks ago

dddfaber ~ Congratulations my friend. I think we see eye to eye on this one. President Obama is a brilliant politician, indeed. His current budget proposal is almost identical to the one I submitted a few days ago. He proposed raising revenue only $50 Million dollars more than my proposal which was $579.5 Billion. President Obama's proposal is $580 Billion. My proposal to cut the military was a generous $250 Billion. President Obama proposes $200 Billion. Wow! I think he read my letter. Either way, we are on the same page.

The only difference is President Obama is looking ahead to the 2014 campaign like a weather forecaster. He knows the short sided Republinuts will vote down any proposal for revenue so he puts social security on the table knowing it is not in jeopardy. On the other hand the Republinuts will defeat the measure forcing Sequester. As a result, they will shock the American people into voting them out of office next year and the President, with a new Congress, will be able to pass a serious budget that is fair and balanced.

At least I hope that is what his plan is. The numbers at least jive enough with mine so that I'm satisfied we're on the same page--for now at least. Stay tuned! It's getting interesting, indeed!

For anyone who missed it, here is my proposed federal budget plan again:

Just for the record I've just got an idea I would like to share with numbers freaks on how we can balance our National budget and have a $10 Billion surplus.

I call this the 25% plan.

The overall national budget outlays for 2012 is $3.803 Trillion. The overall revenue is $2.902 Trillion. $1.359 Trillion is derived directly from payroll taxes. An additional $959 Billion is collected in Social Security taxes. This leaves a total budget deficit of $901 Billion. 1

Reducing the deficit. Rounding off the overall military budget to a conservative estimate of $1 Trillion; and, cutting that by 25% reduces the debt by $250 Billion. Eliminating the DHS (Department of Homeland Security) gives an additional projected savings of $ 55.4 Billion. Ending the War on Drugs contributes an additional $26.5 Billion. The total savings in turn total $331.9 Billion; thus reducing the deficit to $569.1 Billion.

Increasing revenue. I would propose an across the board income and social security tax increase of 25%. The total increase from payroll would then be $339.75 Billion and from social security taxes $239.75 Billion. Of course this tax would have to be proportionate to income level. I'm not suggesting a flat tax only an 25% increase in overall revenue. The total increase on revenue would be $579.5 Billion.

Therefore Gentlemen, as you can see, by eliminating gross waste and with a small sacrifice by all we can balance our budget with a $10.4 Billion surplus.

This approach doesn't cost our social safety net one dime.

1 http://en.wikipedia.org/wiki/2013_United_States_federal_budget

2950-10K's picture
2950-10K 11 years 10 weeks ago

I'm a little shocked by Obama's inability to put himself in the shoes of those millions of worn out citizens trying to survive on their Social Security income. Many of these folks worked for decades, namely the last three, without unions, without pensions, without fair wages, without workplace safety, with wage freezes, with beneifit cuts, with theft of their modest 401k's..."Mitt"..and with job insecurity...."Mitt." Immoral Men, "Mitt," who felt no shame engaging in massive self enrichment at the expense of their desperate fellow citizens.

That said, I still don't see the Republicans giving in to revenues. The handful of billionaires who own their little butts won't allow it. I'm starting to think this same handful owns Obama's little butt too!

2950-10K's picture
2950-10K 11 years 10 weeks ago

In reply to yesterday, #16 MMmmNACHOS, he says, "abolish income tax all together."

I'd be happy with the abolishment of all income tax for those making less than the adjusted real minimum wage, $22 per hour!

megalomaniac's picture
megalomaniac 11 years 10 weeks ago

The quasi corporate government Federal Reserve should merge with the Social Security. Obviously this is a maniac idea, of course because it takes a maniac to have a fair argument with Congress and the Senate. And now with the President Obama who will ride in the back of the bus from now on.

Here is the plan, O.K. so Obama cuts the Social Security then everyone on Social Security now receives a Federal Reserve Gold card at sixty five, if you hold out to sixty seven you get a Federal Reserve Platinum card. All cards issued annually. well we are the richest country ever on earth so lets use it.

This common sense because remember Romney says corporations are people so people will receive a debit card backed by the Federal Reserve good for a minimum of a forty thousand dollar value in real cash buying power for a Gold card, and a fifty thousand dollar value for a platinum. Just like JP Morgan, the American National bank, AIG, or any other too big to fail entity this is better because it is not free money. We pay this off with a stock transaction retirement surcharge which is not a tax so the Republicans should jump at the chance to enact this new law.

It might be considered funny but it is inevitable it will eventually happen. This is really thinking out of the box. Imagine the next political party will have the presidency for a very very long time. I maybe a maniac but I am not crazy. America we could sweeten it up by giving a Gold card to any person involved in a terrorist action like getting machined gunned to death.

2950-10K's picture
2950-10K 11 years 10 weeks ago

In reply to yesterday, #21, Kend: Trust me on this one, Canada has Universal Health Care. All lawful residents of your country are on a government run insurance program, Socialism plain and simple, and you're very lucky.

We in the United States still rely on the inefficient and costly Capitalist model of private for profit insurance.

And finally to fully answer your reply, yes I still blame Bush II for tax cuts on the super rich and wars for profit. These two items alone will add up to 50% of our entire public debt by 2019. George has ownership of this credit card.

2950-10K's picture
2950-10K 11 years 10 weeks ago

Wow, DAnneMarcanomics! How do you find time for all of this?

What was last years total defense spending, something like 700 billion? I think we could still tweak your defense cuts figure just a tad.

chuckle8's picture
chuckle8 11 years 10 weeks ago

Why don't you respond to my question? Why do you want to balance the budget? I would want to reduce the debt, but I do not want to reduce the deficit (AKA investment).

Outback 11 years 10 weeks ago

dddfaber: Machiavellian? To quote Wikipedia "The word has a similar use in modern psychology where it describes one of the dark triad personalities, characterised by a duplicitous interpersonal style associated with cynical beliefs and pragmatic morality." If this doesn't describe Obama, I don't know what does. If you believe that the guy is just being crafty with the Republicans, throwing Social Security and Medicare out there just to taunt them because he knows they can't gag down tax increases, and will then pull back the chip after the midterms - think again. Number one, you don't play that kind of game with America's safety net. Number two, any person capable of setting himself up as judge, jury and hangman (the kill list) and who knows better (Professor of Constitutional Law) Is capable of literally anything.

Kend's picture
Kend 11 years 10 weeks ago

My pointpint point was Canada does have a health care systems the Provinces (states) do. you should know that we have one tenth of the population of the US and ten times your resources and we are having trouble paying for it. Wait until Obama care kicks in and you have to start paying taxes like us We will see how much America likes Universal health care.

I am lucky to live here though.

DAnneMarc's picture
DAnneMarc 11 years 10 weeks ago

2950-10K ~ The previous years defense spending was reported at a little under $700 Billion. Last year the fed put the debt incurred in the recent overseas wars, along with the loan's interest, into the mix. That raised the defense spending bill to somewhere in the area of $1.1 Trillion to almost $1.5 Trillion, with about $100 Billion to $450 Billion of that total in interest payments alone. If you ask me the big hullabaloo about this debt from the Republinuts is because the want their constituency to reap the benefits of these wars; but, be free from having to pay for them. They would prefer to sacrifice our retired seniors, the weak and the ill citizens than to cost their constituents a dime.

Whether President Obama is implicit in this scheme is still uncertain. However, time will tell. We can only hope for the best and prepare for the worst.

As far as further tweaks to my defense cuts, you betcha; as Sarah Palin would say. A more realistic approach would be a $500 - $600 Billion cut. I'm just trying to propose one that might be deemed acceptable by all. I can only assume President Obama feels the same way. Our Defense Department causes more National Security Risks than it prevents in my opinion.

The War on Drugs causes more drug addiction than it prevents by seducing many people on relying on the drug trade for income. Decreasing supply by artificially restricting access increases demand and value. It's economics 101. Legalize drugs, remove the prohibition and flood the market with cheap legal recreational drugs and Drug Dealer phones will stop ringing overnight! That's the effect legalizing Medical Marijuana has had on the trade here in "Oaksterdam," and thats the effect that would occur in the nation. After the first rush of "over happy" citizens, the fad will die quickly when users realize that they now need a real job to survive and using drugs is just an obstacle. As supply approaches infinity demand always approaches 0. If you don't believe me, read "The Wealth of Nations," by Adam Smith. The Prohibition of Drugs has always been a fools errand and is the biggest pyramid scheme in the history of the world. Not only will this country save $26.5 Billion off the top in drug enforcement; but, also consider the countless Billions in undocumented cash flying out of this country into the pockets of organized criminal Drug Cartels and gone forever. I'm all for foreign aid. However, let's limit it to humanitarian aid, investment in infrastructure, or as loans with generous interest payments. Funding criminals is ridiculous!

The DHS (Department of Homeland Security) sealed its fate with me when I called them to help me investigate suspected terrorist activity in my Bank. They told me they weren't interested and I should call my local Police Department. My local Police Department? That's the best they can do for me with a $55.4 Billion annual budget of my money? In my book a servant of mine gets one shot at screwing up that bad on the job. All I can say is, "YOU'RE FIRED! CLEAN OUT YOUR DESKS AND DON'T LET THE DOOR HIT YOU WHERE THE GOOD LORD SPLIT YOU!" The nerve. I still tremble in fury when I think about it!

Of course, this is just the beginning. You're welcome to add any tweaks of your own. This budget is so full of waste we could probably exponentially increase my surplus if we put our heads together. I only spent a couple of hours on this idea. I wonder how much time Congress is really spending. They sure are spending a lot of money.

DAnneMarc's picture
DAnneMarc 11 years 10 weeks ago

Outback ~ Let me begin by saying you might be right. This might only be wishful thinking on our part.

However, I like what President Obama appears to be doing. If he is sincere, and resolved, this is Checkmate. He cannot lose.

If the Republinuts call his bluff and pass the bill, they piss off their campaign contributors. No campaign funds and they lose the next election and President Obama can fix the mess with the next Congress.

If the Republinuts vote against the bill, they piss off their voters. No votes and they lose the next election and President Obama can fix the mess with the next Congress.

What am I missing? A better bill that can be passed with a better Congress can restore any lost Social Safety Net funds--possibly with a raise. I say let this play out before condemnation. Personally, I'm pleasantly shock he picked a revenue figure even higher than mine.

He needs to do something to get rid of this majority of Republinuts! Nothing good is going to get done with them in the way.

Outback 11 years 10 weeks ago

DAnneMarc: I hope you're right, but I fear you aren't. Obama has lost too many opportunities to make meaningful fundamental change to give him that much credit for ultimate good intentions and great political savvy. Had he gone after the Wall Street crooks that crashed the economy in '08, even in a modest way, he would have netted tremendous political capital while sending a strong message that things were going to change. Things haven't changed. The same goes for prosecuting the war criminals that lied about WMD. Instead, he doubled down on Afghanistan. Even back then many knew that Afghanistan was (still is) a fool's errand. History alone makes that crystal clear. How many hundreds of billions down the rat hole since that missed opportunity? And most recently, a chance to drive through one of the most significant things he could have done to leverage a progressive agenda; kill the filibuster. The White House was mute on the issue when it was a real opportunity. Instead, he let Harry Reid mumble it away in Harry's inimitable fashion. It seems to be necessary to maintain just the right tension between the two parties (which are really just one party serving the oligarchy) such that no one is ever to blame. Finger pointing is the name of the game.

While I admire you optimism, DAnneMarc, I'm afraid your faith in Mr. Obama is misplaced. Should I be wrong about this, however, I'll be the first in line to apologize to the man.

MMmmNACHOS's picture
MMmmNACHOS 11 years 10 weeks ago

Excellent idea 2950-10k...A sound and serious proposal; one that catters to those that believe we need an income tax in order to function, yet understand that the consequences of poor wage can no longer be ignored if we are to ever be as great a nation - socially and economically - as we once were not to long ago, (1950's). A time when the wealth was shared amongst more than 20% of the population. A time when if you worked a full time job you could afford a house, a car, to see the doctor, food on the table, and the security of knowing that you could save/invest to have a cushy nest egg for your Golden Years...All this in a single income household.

The question that baffles me is; Why are most BIG companies, i.e. Wal Mart - largest employer in the world - so resistant...correction..."against" paying their employees wages that would keep them from having to fall back on government assistance? What's the ideology here? Is it "just" selfish greed, or is there more to it than that?

chuckle8's picture
chuckle8 11 years 10 weeks ago

I think the motive here is the same motive that drives a student to get an A grade. That is, the only measure of their (board of directors and the CEO) performance is the amount of profit they create in the next quarter.

I think government needs to convert that short term "greed" into long term "greed". The tax structure of 1950's did that for the 30's, 40's, 50's and 60's.

chuckle8's picture
chuckle8 11 years 10 weeks ago


MMmmNACHOS's picture
MMmmNACHOS 11 years 10 weeks ago

That's not optimism you're admirering, OUTBACK, foolishness yes, but more so diminished expectations! I mean c'mon the dude (DANNEMARC) even admits he cast his vote out of pure fear, admitting that he (Obamney) had already proven himself not a man of his word nor a leader with true concern for the middle/poor working class, elderly, and ill, during his first 2 years in office when he had both the House and the Senete in his pocket.
"IF" hell freezes over and pigs take to flight then maybe, MAYBE, Obama will do an about face and prove himself a leader of the average American.
That being said, I am going to place my bet with Obamneys track record.
As Kenny Rodgers once sang; You got to know when to hold 'em...Know when to fold 'em...Know when to walk away...Know when to run.

MMmmNACHOS's picture
MMmmNACHOS 11 years 10 weeks ago

"Long term greed"! I like this idea. So how would you propose this idea to the Credit Card Generation (my generation) and "disposable" generation (those younger than 30). Both these generations know the price of everything but the value of nothing.

chuckle8's picture
chuckle8 11 years 10 weeks ago

When I said long term greed, I was referring to business practices. The tax structure of the 1950's encouraged long term greed behavior. The nutshell version is that a business person facing a 92% tax if he takes out the profit and zero tax if reinvests it in his business might think it would be a good thing to invest in his business for the long term..

Larry Beinhart in several articles for Alternet describes this process in a little more detail and provides the data support the hypothesis. Dylan Ratigan in his book "Greedy Bastards" has many more suggestions.

loganonenation's picture
loganonenation 11 years 10 weeks ago

Reply to #10:

I generally agree with you here. I believe Obama basically modelled his current budget on Simpson-Bowels (misspelling intentional) so he could give David Gregory the hardon he needs to challenge Boner on his show "The President has moved on entitlements, why will your party not move on Taxes?"

It's calling the GOP bluff. THEY asked for chained CPI and means testing. Not a very popular position, save among the beltway class like that boob Chris Matthews. Higher taxes on the rich? Well, now that is popluar, save among those same beltway talkers (unless of course we have "shared sacrifice" in their warped minds). Proves why the GOP lost in 2012 will likely lose more in 2014.

But Obama's third-rail bluff-calling feels like he's pointing a loaded gun at the middle class, especially with the economy the way it is. I think he owes an apology to us for all this riskly poker playing once he finally reaches his goal of driving the Tea Party permanently from political power.

chuckle8's picture
chuckle8 11 years 10 weeks ago

I like your view.

Will someone please tell me why one would want to balance the budget. Balancing the budget seems always to hurt the economy. The only time it works is when the economy is booming like it was in Canada in the 90's.

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