Perdido 03

Perdido 03

Wednesday, December 19, 2012

Why Is Obama Such A Bad Dealmaker?

In case you haven't heard, President Obama is about to sell out Social Security in another "Grand Bargain" with John Boehner that will chain cost of living increases for seniors in what amounts to a stealth attack on the program and a regressive tax on seniors.

Senator Jeff Merkely blasted Obama's plan this way:

We had an election, 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.

 The NY Times explains how chained CPI works:

Democrats and Republicans are considering switching Social Security payment adjustments to a “chained” Consumer Price Index. The Consumer Price Index tracks the price of a basket of commonly purchased household goods. A chained index accounts for consumers’ tendency to substitute similar items for one another as prices fluctuate. A consumer might buy more apples when the price of oranges increases, for instance.

Though it sounds like nothing more than a technical fix, adopting a chained index would squeeze benefits over time. The chained index ends up, in a given year, about 0.3 percentage points lower than the unchained index. That difference accumulates, so after five years, it might be 1.5 percentage points lower. Using a chained index would cut Social Security spending by about $112 billion over a decade, according to an estimate by the Congressional Budget Office.

AARP, the lobbying and research group for older Americans, immediately criticized the proposal. “We would rather see a broader discussion addressing retirement security,” said Debra Whitman, an executive vice president at AARP. “We object to the context in which it’s being discussed, which is a few weeks before Christmas, without people understanding what the change really means.”

Because the payment reductions would accumulate over time, AARP and other groups argue that they would hit the oldest Americans disproportionately hard. They might also unduly burden women, who tend to live longer than men, and the lowest-income older people, who are most dependent on Social Security checks, the groups warned.

David Dayen of Firedoglake puts the chained CPI scheme in perspective:

You will hear virtually nobody claim that chained CPI represents a more accurate way of determining the cost of living for senior citizens on Social Security, because if they were honest about it, they would tailor an inflation index to the real costs of seniors. The only benefit to chained CPI is that it saves the government money at the expense of senior citizens. That’s it. It’s a back-door way of lowering the benefit. Even if you agree with the methodology of the substitution effect, that people will manage the cost of living by purchasing less expensive products, you have to ask yourself if seniors have been getting away with murder all these years under the old rules. And considering they get an average annual benefit of just $13,000, and that almost half of them use that as their only form of income, without savings or anything else to fall back on, the very idea is preposterous.

It sure is - but Obama, who for some inexplicable reason has always hated the Social Security and Medicare programs, it's a great way to attack the viability of the program and save the government some money, which can then be used to grant rich people tax cuts.

And don't tell me Obama doesn't want to destroy the program because this isn't the first time he's attacked it.

When they decided a few years ago to do a tax cut for people, they took it from the Social Security fund in what amounted to a stealth attempt to underfund the program.

Here we are, a few years later, and Obama is proposing to cut real benefits for senior citizens so that he can raise the bar for tax cuts to millionaires, as Boehner wants.

I am sure President Obama's defenders will say the usual drivel: "Oh, it's all he can do because those mean, mean Republcians won't work with him, blah blah blah."


Ezra Klein says Republicans see weakness from the White House because Obama said he wouldn't negotiate or cave on certain things and, lo and behold, he negotiated and caved on them in a couple of weeks:

A few weeks ago, the Obama administration was firm that they wouldn’t budge on tax rates for income above $250,000 and that they wouldn’t budge on the debt ceiling. They’ve since budged on both. Republicans increasingly think the White House will concede more now, and that if they don’t concede more now they’ll definitely give Republicans a better deal if threatened with debt default. Whether or not that’s true, it pulls Republicans — and Boehner — to the right, as it makes it harder for Boehner to argue for a compromise now.

And so, expect as worse a deal on the "fiscal cliff" fake crisis as you can possibly get, with Obama selling out old people and working people so that rich people can keep their tax cuts.

The Republicans aren't going to compromise, but Obama surely will - as he has time and time again.

Just a few weeks ago, liberals and progressives who still defend this president were bumping chests and saying things were going to be different this second time around, that Obama had momentum and the country had clearly spoken about the importance of protecting Social Security and Medicare, about raising taxes on rich people.

Now we see Obama caving as usual on many of those things and in the end, we will probably see him cave on all of those things.

It seems the only people he can remain tough on is teachers.

You have to wonder, is he really such a bad dealmaker and he keeps getting taken to the cleaners by the GOP or are these the deals he really wants to make.

I am of the opinion it is the latter.

He is no progressive or liberal.

The fact is, he is a moderate Republican who likes to surround himself with rich white guys and his priorities tend to be, what do rich white guys need?

Time after time, from the refusal to push for a public option in Obamacare to the Grand Bargain of a few years ago to the current cave-in of the fiscal cliff nonsense, we see again and again Obama giving the rich white guys what they want.


  1. The reason Obama is such a bad deal maker is because he has consistently disconnected his rhetoric from his final actions in order to achieve the compromise deal. As a result, he makes many significant negotiating blunders. This is in large part due to his over eagerness to achieve a compromise for the sake of claiming that progress has been made. First the opposition sees through his weaknesses and adopts the most extreme starting position with the knowledge that they will get everything they want by splitting the middle. Thus, they will satisfy Obama's egoistic claim to be wise like King Solomon. But the opposition gets everything they really expected because they began the negotiations with a very extreme starting position.

    More revealing is the fact that they play up to Obama's arrogance and false sense of fair play. Thus Obama is a real "Amateur" when it comes to negotiating in same sense that Bill Clinton referred to Obama as an amateur.
    The negotiations are similar to a poker game where Obama is unable to keep a straight face and conceal his cards from his opponents. I hope that helps you all understand Obama's ineffectual negotiating style

  2. My explanation is more sinister Obama is doing what he intended to do all along to please his corporate masters. He just goes through the motions of negotiating as window dressing for the public. Is it any coincidence that Lloyd Blankfein and his allies, who wanted Soc. Security cut, were visiting Obama and Congress a few weeks ago? The only (slight)surprise is that Obama has become so brazen about breaking his campaign promises. He's still over a month short of his second inauguration and he's already started the process of giving SS away. Even Reagan refused to do that.

  3. To say that I'm angry about what Obama did with Social Security is an understatement. But,to my utter dismay, most people I know are only mildly upset about it, but philosophical--they act as though they can't stop the inevitable and some continue to make excuses for Obama. So, what the fuck is wrong with the American public? They should be outraged. They should be screaming. They should be putting their Congressmen and women on notice.