President Obama and House Republicans appear to be closing in on a deal to avert the fiscal cliff, but liberals are not happy with it.
Late last night, the White House offered a plan with two major concessions to Republicans. First, it would hike taxes on the wealthy, but only on income above $400,000, instead of the current $250,000 threshold. Second, and far more controversially, Obama offered to change the formula used to calculate Social Security benefits in a way that would cut outlays to seniors slightly while saving the program $225 billion over a decade.
The reaction from liberals, who have been demanding all along that social safety net programs be off the table, was swift and fierce. “This is a cut affecting every single beneficiary — widows, orphans, people with disabilities and many others. It is a cut which hurts the most those who are most vulnerable: the oldest of the old, those disabled at the youngest ages, and the poorest of the poor. Perhaps fittingly, this will be done during the holiday season, when the American people are distracted,” Nancy Altman, the founding co-director of the advocacy group Social Security Works, said in a statement.
“They will cut Social Security not openly but by stealth — through a cruel cut known colloquially as the chained CPI,” she added.
The CPI, or cost of living index, is used to make sure benefits keep pace with inflation, but there are lots of different ways to calculate it. The current measure, called the CPI-W, is generally accepted to overestimate inflation, but the liberals say the proposed alternative, the chained CPI, is too stingy.
The chained CPI assumes seniors will adjust their buying habits in response to price shifts (e.g., if the price of oranges goes up, they’ll buy more apples), so they should be able to afford to take a haircut on benefit checks. But liberals say that seniors often barely make ends meet with current benefit levels, so cutting them more would be devastating.
Obama has been looking to sell out Social Security since the last "Grand Bargain" with Boehner fell apart.
And now, unless liberals and progressives hold his feet to the fire as they promised they would before the election, he will sell it out.
Given their track record over the public option, don't expect much out of them.