Friday, March 18, 2011

Seeing Eye-T0-Eye On Social Security

The GOP has made it perfectly clear. And President Obama has made it clear, maybe.

On Tuesday, House Democrats offered to the short-term budget deal, which extended government operations for three weeks, an amendment which failed on a nearly exact party line vote. According to Jed Lewison, the text of the amendment:

SEC. 295. None of the funds made available by this Act may be used to develop or implement a system that cuts Social Security benefits, or that privatizes Social Security.

SEC. 296. None of the funds made available by this Act may be used to develop or implement a system that cuts Medicare benefits, eliminates guaranteed health coverage for seniors, or establishes a Medicare voucher plan that limits payments to beneficiaries in order to purchase health care in the private sector.

This was not a measure intended to block cuts to Social Security or medicare nor to reform either the entitlement program for the elderly. It merely offered House Republicans, advocates of a $61 billion cut to the budget, an opportunity to pledge they will not jack up the deficit in order to privatize Social Security or Medicare. And all but one passed on that opportunity.

If that didn't make the intent of the GOP clear, House Budget Committee Chairman Paul Ryan of Massachusetts cleared up any confusion when, responding on St. Patrick's Day to Senate Majority Leader Reid's assertion that cuts to Social Security should not be considered now, he admitted

I’m boggled. That just boggles my mind…I would argue, even though, it’s not really a driver of our debt, it’s not a significant part of our debt problems, it would build great confidence, fixing Social Security on a bipartisan basis, because it would tell not only the credit markets that Americans are getting their act together, it would buy us more time and space with them, it would show that our government’s not broken.

Gone- though probably temporarily- in the space of three days was any pretense by the GOP that cutting Social Security has anything to do with the deficit or the debt. It really is all about Wall Street and putting ever more distance between society's have-a-lots and the rest of us. Nevertheless, this thinking apparently puts the party in line with the guy at 1600 Pennsylvania Avenue, as Digby notes:

the audience Ryan was trying to reach with that statement has just a little bit more power than all the rest of us put together on this. His name is Barack Obama and he has long signaled that he really, really, really wants to make a deal (aka the Grand Bargain).

For now, though, The Hill reports,

Obama’s political team, led by David Axelrod, David Plouffe and Jim Messina, are urging the president to understand that backing benefit cuts could prove disastrous to his 2012 reelection hopes, sources say.

The political team is winning the argument so far, but internal debate rages at the White House as Republicans in Congress insist sweeping efforts to restore government finances must include Social Security reform.

But the policy guys are pushing hard against the elderly as

“Gene Sperling and Jason Furman and some of the Treasury people started with the posture that we’re the best people to reform Social Security — that was when the Democrats had a majority in both houses of Congress,” said a Democratic policy expert who has met Obama’s economic policy team over the past two years.

“The same people have continued to make that argument even as they’re now responding to conservatives who are stronger in the Congress,” the source, who strongly opposes benefits cuts, told The Hill.

The policy team knows its boss well, that he is aware that Social Security does not add to the deficit but is eager to please the crew in midtown Manhattan:

Obama’s economics team is telling the president that benefit cuts would be less draconian with Democrats controlling the White House. Cutting costs for the safety net would help bond markets and restrain future interest rates, they add.

This may be a marriage made in heaven, or hell- the President casting an eye on the bond markets and the GOP's point man on the budget talking about the credit markets. It may be a little hot to handle now, what with overwhelming majorities of Americans opposing cuts in Social Security benefits- not only privatization, the deal-killer for the President.

But the 2012 presidential election and a new congress are not far away. Whereas in 2007, 42% of the nation's wealth was held by its wealthiest 1% (chart below, from William Domhoff via DailyKos), the figure probably has grown by now. And it's never too late for a president aching to be transformative and a party patterning itself after Ayn Rand, Rush Limbaugh, and Gordon Gekko to get that number up to 60 or 65%.

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