How do I know that President Obama (D) is soon going to attempt to force cuts to social security and/or medicare? He has told us so, albeit in oblique ways. During his State of the Union Speech, for example, after he made his splashy pitch to raise taxes on millionaires, the President said this:
The American people know what the right choice is. So do I. As I told the Speaker this summer, I’m prepared to make more reforms that rein in the long-term costs of Medicare and Medicaid, and strengthen Social Security, so long as those programs remain a guarantee of security for seniors.
But in return, we need to change our tax code so that people like me, and an awful lot of members of Congress, pay our fair share of taxes. (Applause.)
What did the President tell the Speaker over the summer? Sam Stein has the answer:
According to five separate sources with knowledge of negotiations -- including both Republicans and Democrats -- the president offered an increase in the eligibility age for Medicare, from 65 to 67, in exchange for Republican movement on increasing tax revenues.
The proposal, as discussed, would not go into effect immediately, but rather would be implemented down the road (likely in 2013). The age at which people would be eligible for Medicare benefits would be raised incrementally, not in one fell swoop.
The president also put stealth cuts to social security benefits on the table, as TPM reported last July:.
in recent weeks, congressional aides, strategists, and advocates have been floating, or warning of, a stealth change to the Social Security benefit structure that has quietly been placed on the negotiating table.
The proposal wouldn’t just impact Social Security benefits. It would also shave off yearly increases in federal pension payouts, and result in somewhat higher tax revenues. But the ratio would be skewed toward benefit cuts by a factor of about 2-to-1 and would represent a financial hit to even the poorest retirees unless they were exempted.
The idea is to change the way Cost of Living Adjustments (COLAs) are calculated across the federal government.
The White House later distanced the President from the issue of social security cuts at about the time Occupy Wall Street demonstraters hit the streets:
In his discussions with House Speaker John Boehner this past summer about raising the debt ceiling, one of the possibilities the president discussed was changing the formula by which Social Security payments are increased for inflation. Using what's called the Chained Consumer Price Index rather than the standard CPI would result in slightly lower increases for inflation because the Chained CPI assumes that if prices rise, consumers will buy cheaper products.
That the president even entertained the idea changes to Social Security upset many Democrats. Now the Social Security program has become an issue in the campaign for the Republican presidential nomination - and the White House appears to want to avoid getting into the argument
It is unclear whether the President took social security cuts off the table, or whether they will be back on the table in the coming budget negotiations. It seems clear, however, that the President favors cutting social security, or he oddly favors appointing people who favor cutting social security to positions where they can provide the cover needed for the President to make the cuts. Alan Simpson was not the only one on the Cat Food Commission who favored cutting taxes for wealthy corporations and cutting social security for everyone else. Erskine Bowles was also strongly in favor of that approach.
[Businessweek, quoting the Cato Institute director of financial regulation, reports that Erskine Bowles may be one of the President's choices to replace Timothy Geitner when he steps down after the election, should Mr. Obama win re-election.
The other name mentioned was Senator Ben Nelson. Here's how the New York Times describes Nelson:
One of the most conservative members of the Democratic caucus, he repeatedly broke with his party on important votes, supporting the Bush tax cuts in 2001 and 2003, for instance. He became the focus of anger from the party’s liberal wing during the debate over the health care bill, which he held up repeatedly while demanding that it be rewritten in ways seen as favorable to the insurance industry, in which he formerly worked.
What else is clear is that the effort to force the cuts through, whether it's just Medicare or both Medicare and Social Security, is about to begin.
President Barack Obama will reprise previously rejected deficit-reduction plans and tax increases on the wealthy while proposing new incentives for companies to return jobs to the U.S., as part of his fiscal 2013 budget, administration officials said.
The election-year spending plan, due to be presented to Congress Feb. 6, is intended to demonstrate the administration’s intent to chip away at the nation’s long-term deficits.
The previous plan called for $1.5 trillion in tax increases over the next decade, including the expiration of Bush-era tax cuts for families earning $250,000 or more a year. It also would make changes in mandatory spending programs, cutting Medicare and Medicaid and farm subsidies, selling government assets and reducing federal worker benefits.
The CBO is ready with the numbers congress will need, having released them last week.
According to a CBO report released Tuesday, gradually raising the Medicare eligibility age to 67 would save the federal government about $148 billion over 10 years.
See, e.g., http://www.kaiserhealthnews.org/...
So what do we do?
If President Obama ends up proposing the cuts, as all indicators seem to suggest he will, I think there is only one answer. We have to tell the President in as many ways as we can, and as loudly as we can, that they are unacceptable.
If we can protect the internet, we can defend perhaps the greatest achievement and legacy of the Democratic Party, and the core mission of the Democratic Party. These cuts are not only unnecessary, they hurt people, and end up costing more. Raising the age of Medicare eligibility not much more than a gimmick, and a cruel one at that.
Why? Because the so-called "savings" from raising the Medicare eligibility age are in fact non-existent. As another Diarist has pointed out, the move will actually increase and nearly double the cost of providing health care for the affected population, shifting much of the increased costs onto seniors themselves (many of whom will be priced out of coverage until their delayed medicare kicks in), and onto their employers, for those lucky enough to still have a job providing health care at age 65.
The CBO report demonstrated that raising the eligibility age by two years
would increase costs to seniors, and some seniors would become uninsured or would pay higher prices for private insurance.
CBO assumed that Obama's healthcare law would remain in place if the Medicare age is raised, meaning seniors would be able to buy private coverage through the new insurance exchanges. Without the healthcare law, "many more people" would end up uninsured if the eligibility age is raised, CBO said
The cuts are also unnecessary. President Obama will tell us, oh-so-sincerely, that this is the only responsible thing to do. Hogwash! This is the cruelest way to balance a budget, directly on the backs of those too old to work. There are plenty of other credible options, like a tax on hedge fund managers, or on super-computer trades, or cuts to the still hugely bloated military budget.
The President will present the cuts as a grand compromise. That's hogwash, too. How is it a compromise to propose that in exchange for asking gazillionaires to pay what the rest of us have been paying in taxes all along, seniors, the vast majority of whom did not enjoy the lower taxes of the wealthy, are nonetheless still expected to take a big hit, and make a big sacrifice, right when they are most vulnerable and least able to afford it.
That isn't a compromise, that's a sell-out, and if President Obama tries to force it on us, we can't allow it to stand.
Update: In answer to the suggestions in the comments that all of this is hypothetical, please note that it is well documented and established that President Obama has already proposed the cuts mentioned in the diary.
The issue is, will the President re-introduce them, and what should democrats do if he does. It certainly appears that he will, perhaps next week. No one has signaled that the cuts are off the table. On the contrary, the White House is telling "the left" to brace themselves for a budget they are sure to hate:
Obama warns left: You won't like budget
By Alexander Bolton - 01/17/12 05:30 AM ET
Top White House officials are warning liberal and labor leaders to brace themselves for President Obama’s budget proposal.
Senior administration officials fear a backlash from the left and are trying to prepare their allies to expect a disappointing budget, sources say.
Given these signals from the White House, the President's past proposals and the impending budget release, it is not irresponsible to speculate about what cuts might be in the budget, and what an appropriate response might be.
Edited for clarity and to correct erroneous assumption re Geitner's possible replacement.