Monday, January 03, 2011

The Non-Compromise Compromise In The Works

When Barack Obama during this lame duck session came to a "compromise" with his friends, the Senate Republicans, on extension of tax cuts, it was widely hailed as a triumph for President Obama, and of bipartisanship. Extension of unemployment benefits for 13 months, we were told, was so important that it justified adoption of the GWBush tax policy. And anyway, the argument went, once the GOP took over one branch of Congress in January, it could only get much, much worse.

Those unreasonable, petulant, "professional liberals" complained that the President drove a very easy bargain, choosing to punt on first down, as Senator Franken put it. Bill Clinton, the Democratic Party apparatus, and the mainstream media just knew that Barack Obama forged a compromise by exerting presidential leadership as "the only adult in the room."

But we're beginning- albeit only just beginning- to get a sense of the danger brought about by the White House's penchant for bargaining against itself. One "concession" the Administration could have demanded was extension of the debt limit but that would have been, oh, perhaps contentious. And hurt the feelings of Republicans. On Sunday, Chris Matthews' favorite Republican Senator and icon of Inside Washington, Senator Lindsay Graham of South Carolina, told Dick Gregory (transcript of segment here)

Well, to not raise the debt ceiling could be a default of the United States' bond and Treasury obligations. That would be very bad for, for the position of the United States in the world at large. But this is an opportunity to make sure the government is changing its spending ways. I will not vote for the debt ceiling increase until I see a plan in place that will deal with our long-term debt obligations, starting with Social Security, a real bipartisan effort to make sure that Social Security stays solvent, adjusting the age, looking at means tests for benefits....

I would suggest that if we're serious about taking America in a new direction, and you're not putting entitlement reform on the table, you've missed a great opportunity to change the course of America's future. And the last election was about change, Change that really will make us something other than Greece. I think Pat Toomey, Rand Paul, and other candidates who are new to the Congress have said during the campaign, "Everything's on the table when it comes to making America fiscally sound." Let's see if we can find bipartisan reforms in Social Security before we raise the debt limit.

It's not that the White House has been ignorant of the importance of raising the debt ceiling, a rather pro-forma action in every other Congress. Also yesterday, chairman of the Council of Economic Advisors Austan Goolsbee told Christiane Amanpour "the debt ceiling is not…is not something to toy with. That's the…the…if we hit the debt ceiling, that's the…essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic. I mean, that would be a worse financial economic crisis than anything we saw in 2008."

The debt ceiling could have been part of The Grand Compromise. But it wasn't and now the "moderate" Lindsay Graham says he "will not vote for the debt ceiling increase until" there is "a real bipartisan effort" to increase the eligibility age, and means-testing, of Social Security.

Robert Kuttner recently maintained that President Obama will offer during his State of the Union address support for raising the eligibility age. It will be sold to Democratic members of Congress and to the left as a means to stave off the GOP's effort to privatize the system. Democratic heavyweight (speaking figuratively) Ed Rendell last week came out in support of the idea. Even Anthony Weiner of New York, a leading House liberal, steps clear on Face The Nation (transcript of segment here) of addressing benefit cuts, saying only "it is not a subject of compromise for many Democrats, privatizing Social Security. We just don't believe that's a good idea."

But it's not only the left and (presumably) congressional representatives from south Florida who oppose what will be marketed as "entitlement reform." Bloomberg Business Week reported that an AP/CNBC News poll taken in November found "nearly two-thirds oppose raising the retirement age to 69 for people to receive full Social Security benefits. Most oppose raising the retirement age even if done gradually over the next 65 years."

Those numbers will have to move if Social Security is to be undermined. "Social Security" will be replaced in the popular mind with "entitlements," meant to imply money greedy individuals believe they are entitled to, rather than from a fund built up by employers and employees themselves. Politicians and the media will continue to conflate the trust fund with general revenues, inferring that the system is driving up the deficit. People just are living so much longer, we will hear; details will remain a closely guarded secret because life expectancy at 65, particularly for people most in need, has little changed.

Generational warfare will be invoked; we'll be told- without being reminded the trust fund is in the black- that the young are being deprived. A proposal to raise the cap on contributing to the system, popular with the public, will be floated, only to be dropped later in the spirit of bipartisan "compromise" so popular with the media and this President.

It all will be done in the cause of reducing a deficit to which Social Security never has contributed. The cut will apply only to future retirees, who over the years have been fattened for the kill with misinformation and disinformation. Something, though, has to be sacrificed- and what better than a successful program which pays out guaranteed benefits year after year?

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