Talks: Inflation Change Could Cut Social Security - AP

[WillyT]

Talks: Inflation change could cut Social Security
By STEPHEN OHLEMACHER, Associated Press – 48 minutes ago

<snip>

WASHINGTON (AP) — Once considered untouchable, Social Security is now in play in the debt-ceiling negotiations. And that could mean higher income taxes for many U.S. families in addition to shaved benefits for tens of millions of retirees as they age.

Social Security became part of the private discussions between President Barack Obama and Republican House Speaker John Boehner on coming up with "something big" for reducing deficits by $2 trillion to $4 trillion over the next decade. White House officials said Thursday that could include a new inflation measure for Social Security that, through a combination of reduced benefits and higher taxes, could produce federal savings close to $200 billion.

Low- and middle-income families could be hit.

The proposal would represent a reversal for Obama. In contrast to his pledge to target tax increases at the wealthy, high-income families would largely be spared from tax increases that would result from changing the way inflation is measured. And until now, the administration has been adamant that Social Security does not add to the deficit and should not be a part of deficit reduction talks.

Adopting a new inflation measure would allow policymakers to gradually cut benefits and increase taxes in a way that might not be readily apparent to most Americans. The inflation measure under consideration is called the Chained Consumer Price Index. On average, the measure shows a lower level of inflation than the more widely used CPI.

A Chained CPI assumes that as prices increase, consumers buy lower cost alternatives, reducing the amount of inflation they experience. For example, if the price of beef increases while the price of pork does not, people will buy more pork. Or, as opponents mockingly argue, if the price of home heating oil goes up, people will turn down their heat and wear more sweaters.

<snip>

More: http://www.google.com/hostednews/ap/article/ALeqM5j7oZuOr-LwC83YRBMUzm_6vgYXYw?docId=fd1817c3ab1348c69cdc928d8e98f805

:kick:

[WillyT]

1. This IS An ACTUAL CUT !!!

If it were top go through.

:shrug:

[gkhouston]

2. And when there are no cheaper alternatives left? Who gets to

decide what the minimum is? Millionaires in Congress are telling retirees they should live in cardboard boxes on Ramen noodles because that's "cost effective"?

Could this be any more disgusting?

[WillyT]

5. "Could this be any more disgusting?"

I don't see how, but will know soon enough.

:shrug:

:hi:

[gkhouston]

6. True dat.

Going to the beach tomorrow. Don't want to see what idiocy's coming up next.

[suffragette]

12. “Are there no prisons?” asked Scrooge.

“Plenty of prisons,” said the gentleman, laying down the pen again.
“And the Union workhouses?” demanded Scrooge. “Are they still in operation?”
“They are. Still,” returned the gentleman, “I wish I could say they were not.”
“The Treadmill and the Poor Law are in full vigour, then?” said Scrooge.
“Both very busy, sir.”
“Oh! I was afraid, from what you said at first, that something had occurred to stop them in their useful course,” said Scrooge. “I’m very glad to hear it.”
“Under the impression that they scarcely furnish Christian cheer of mind or body to the multitude,” returned the gentleman, “a few of us are endeavouring to raise a fund to buy the Poor some meat and drink, and means of warmth. We choose this time, because it is a time, of all others, when Want is keenly felt, and Abundance rejoices. What shall I put you down for?”
“Nothing!” Scrooge replied.
“You wish to be anonymous?”
“I wish to be left alone,” said Scrooge. “Since you ask me what I wish, gentlemen, that is my answer. I don’t make merry myself at Christmas and I can’t afford to make idle people merry. I help to support the establishments I have mentioned—they cost enough; and those who are badly off must go there.”
“Many can’t go there; and many would rather die.”
“If they would rather die,” said Scrooge, “they had better do it, and decrease the surplus population.

http://www.gutenberg.org/files/46/46-h/46-h.htm


Scrooge sums up what they want to return us to.

You're correct - absolutely disgusting.

[WillyT]

13. "the surplus population..."

I wonder how the "pro-life" party feels about "the surplus population..."

I've always loved/hated that passage... if ya know what I mean.

:bounce:

:hi:

[suffragette]

14. Dickens understood the importance of depicting

how heartless and callous the money-driven class can be.

And yeah, it makes for hard reading. Very persuasive in the points he makes, though.

The "pro-life" party has always been about control and poverty is a means of control.

Thanks for the OP Willy.

K&R.

:hi:

[Hell Hath No Fury]

3. Read it and weep, folks.

Anyone who supports this should be voted out of office. :mad:

[WillyT]

10. Exactly !!!

:hi:

[Bluenorthwest]

4. This is a cut, no matter how they try to spin it

Any accomplice to this fraud should be sent packing at once. That includes the temp in the Oval.

[WillyT]

8. Yep...

:hi:

:kick:

[WillyT]

7. More:

In Social Security Cuts, Look for the Chained CPI
By: Daniel Marans - FDL
Thursday July 7, 2011 7:18 am

<snip>

Although specifics have yet to officially emerge, there is little doubt that among the Social Security benefit cuts the President is proposing will be a reduction in Social Security’s annual cost-of-living adjustment (COLA) through an obscure change in the COLA formula known as the chained CPI.

Update for those who haven’t seen it: The Washington Post reported last night that President Obama is “proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security,” in a meeting with top House and Senate leaders this morning. Apparently those cuts to Social Security and Medicare would be part of a $4 trillion debt reduction package—a larger deal than the $2 trillion one that had been talked about until this point.

There are a number of reasons why the Social Security cuts are sure to include the chained CPI. Chief among them is that it has been known for weeks now to be “on the table” in debt-ceiling negotiations. Here is Sen. Dick Durbin (D-IL) on June 29 in Tax Analysts:

“It’s a possibility, but no decision’s been made,” Senate Democratic Whip Richard J. Durbin of Illinois said of inclusion in the deficit reduction package being negotiated in conjunction with raising the debt ceiling.

Days earlier, on Dow Jones Newswire, Republican Majority Leader Eric Cantor (R-VA), refused to call the chained CPI a tax increase—though its effect on the tax code would be to increase revenue—effectively admitting that it was a policy Republicans could live with.

Asked whether the proposal would be interpreted as a tax increase and therefore a non-starter for Republicans, Cantor said it could be seen as both impacting tax rates and benefits paid out by the federal government.

<snip>

More: http://my.firedoglake.com/dmarans/2011/07/07/in-social-security-cuts-look-for-the-chained-cpi/

:mad:

:kick:

[sarcasmo]

9. The Robber Barron's are winning.

[high density]

11. Some on DU apparently want to debate over the definition of cuts

This is a cut.

[Faryn Balyncd]

15. Why "cut" anything when it's (SL)EASIER to just cook the books (again)?

(K and R)

After the Boskin Commission in the 90's, the CPI/COLA calculations were rigged, resulting in our current "no inflation" figures (which have already reduced COLA'S to zero for at least 2 years.

The "chained CPI" concept is, by definition, extremely flexible, depending on at what point manipulators decide that a "substitution effect" should be inserted. Since they are no ;onger required to compare apples to apples, the "chained CPI" substitution effect allows manipulators virtually infinite ability to FURTHER rig the CPI/COLA figures downward in the future without new legilation.