by Dave Lindorff / December 20th, 2012
If President Obama had been the commander of Allied forces during the invasion of Normandy 1944, he would have cut a deal with the Nazis when they launched the counter-offensive called the Battle of the Bulge, and WWII would have ended in Europe with a divided France and a still-extant Third Reich into the 1950s. If he had been president in 1965, we wouldn’t have Medicare today. If he had been Rosa Parks, black people might still be riding at the back of the bus.
The current president of the United States, the most powerful man in the world, commander in chief of the most awesome military the world has ever known, is the most pathetic negotiator in the history of modern politics. Either that or he wants to lose.
During his first term, we watched him inexplicably water down his health reform program before it even got started, removing the option of a Canadian-style state-run insurance program known as “single-payer” from consideration, and then cutting deals with the insurance industry, the hospital industry and the pharmaceutical industry, before going to Congress with a plan that ended up being a gift to all three.
We watched him cave early on in negotiations over a crisis economic stimulus plan in 2009, giving Republicans a $425-billion
tax cut that did nothing to boost jobs in return for getting a measly $425-billion in stimulus funding approved. He caved quickly too on the plan to appoint Elizabeth Warren to head the newly created Bureau of Consumer Financial Protection. The list of Obama premature cave-ins is long and ugly.
Now, when he is almost by accident in an unassailable position to have the hugely unfair and damaging Bush tax cuts for the rich finally expire on December 31, leaving Republicans stuck in January with having to pass Democratic legislation restoring tax cuts for just the middle class, he is giving it away, offering gratis an undermining of
Social Security benefits for all Americans by way of a subtle change in the way inflation adjustments are made in future benefits.
For years, Social Security payments have been adjusted on an annual basis in accordance with the Bureau of Labor Statistics‘ Consumer Price Index. Now Obama is proposing, in an offer to Republicans, that this adjustment be made not based on the CPI, which looks at a typical market basket of goods and services commonly purchased by ordinary people, but on something called a “chained CPI.” In the chained CPI methodology, assumptions are made that when prices rise, ordinary people switch to alternative, cheaper goods and services, so the chained CPI switches what’s in its basket to substitute those. For example, if car prices rise, it is assumed people will buy Fit instead of Civic sedans. If the price of hamburger rises, it is assumed people will switch to chicken or turkey burgers (or if they get too expensive, to beans or dog food). If the cost of beer goes up, is is assumed people will switch from Heineken to Bud.
Set aside the reality that for the elderly and disabled on Social Security, the chained CPI probably doesn’t really work, since their major expenses tend to be for things like medical care and drugs, which actually see faster inflation than most goods and services, or for rent or
mortgage payments, which do not lend themselves to substitution easily (old and disabled people have a difficult time moving when rents or interest rates rise). The real question is why Obama would give in on this issue when he already has a winning hand by just letting the December 31 deadline on the Bush tax cuts pass.
There is, as the president surely knows, no real crisis in letting the country go “over” the so-called fiscal cliff. Every expert and every politician knows that when that happens, it is not, despite what the scare-mongering talking heads in the media say, going to raise everyone’s taxes. No politician in Washington would dare to let that happen. They will simply pass a tax bill restoring the Bush tax cuts for people with incomes under $250,000.
The difference is that with the old law, which favored the rich, no longer in existence after New Year’s, restoring tax cuts for the middle class and the lower class would require a majority vote in Congress, and that will be easy to obtain. There would be no majority vote for restoring tax cuts for the rich, though, which have been costing the US Treasury over $70 billion a year for the past decade — an amount of revenue more than enough, if applied to the Social Security program, to keep it fully funded into the indefinite future.
As strong as the president’s bargaining position is today, it would be ten times stronger after December 31 because Republicans could no longer hold middle class tax cuts hostage in order to cut taxes for the rich.
And yet, here, once again, we see President Obama surrendering his position before serious bargaining has even begun.
It seems like the only place where this president ever stands his ground is in his insistence on killing lots of innocent people with armed drones in countries around the world that the US is not at war with (Pakistan, Somalia, Yemen, etc.), and on threatening Iran with attack over its nuclear power program.
It would be nice to imagine that President Obama is playing Muhammad Ali’s “rope-a-dope” game of suckering his opponent before clocking him, but I’m afraid it’s not that at all. His behavior in this case looks a lot more like that of Arnold “Chick” Gandil, the notorious mob-linked Chicago first baseman who orchestrated the throwing of the 1919 World Series by his Chicago White Sox team.
This article was posted on Thursday, December 20th, 2012 at 7:59am and is filed under
Obama,
Social Security.
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