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Photobucket

In Fiscal Cliff: House Democrats Close Ranks Against Social Security Cuts, Zack Carter reports the late afternoon news that Rep. Chris Van Hollen (D-Md.) has added his name to the many Democratic Senators saying that cuts to Social Security should be taken off the table in efforts to avoid the so called "fiscal cliff."

"With respect to Social Security, I agree with what the president has said and what [Rep.] Peter DeFazio said. Social Security is not part of the deficit and debt problem. We're not going to raid Social Security in order to balance other parts of the budget," Van Hollen said. ...

Van Hollen is a top-ranking deputy for House Minority Leader Nancy Pelosi (D-Calif.), but has often taken hawkish positions on government spending and deficit reduction. His explicit objection to cutting Social Security benefits as part of any fiscal cliff deal follows similar comments from Senate Majority Leader Harry Reid (D-Nev.) and Senate Majority Whip Dick Durbin (D-Ill.). In mid-November, Sen. Bernie Sanders (I-Vt.) and other progressive senators including Sen. Sheldon Whitehouse (D-R.I.) and Sen. Tom Harkin (D-Iowa) held a press conference advocating against Social Security cuts.

"I do not often quote Ronald Reagan," Sanders said at the time. "This is what Ronald Reagan said on Oct. 7, 1984. 'Social Security has nothing to do with the deficit. Social Security is totally funded by the payroll tax ... if you reduce the outflow of Social Security, that money would not go into the general fund to reduce the deficit.' End of quote, Ronald Reagan -- which goes to show you, anybody can be right at least once."

The Social Security Trust Fund is not part of the federal budget, is funded by payroll taxes, and currently has a $2.7 trillion surplus, guaranteeing its solvency through 2033. Adjustments to income caps is just one way of extending this solvency through the end of the century.  

Representative Holland is one of a fewer number of Democratic leaders also opposing raising the eligibility age for Medicare.  

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This morning, Joan McCarter reported the encouraging news that Democratic resistance to entitlement cuts appears to grow, linking us to a similar report in the New York Times.  I wrote a comment there that I adapt here to suggest we Democrats risk a catastrophic strategic blunder if we fall into the Republican's announced trick of using expanded military expenditures to force us into agreeing to unnecessary social spending reductions.


Any Reductions of Government Spending Should Come From Defense Spending Not Social Programs

These are great steps in the right direction but I would like to hear Democratic leaders go on the record saying that any reductions in government spending that are part of a grand compromise should be taken out of the enormous increases in defense spending initiated by former President Bush, and not come out of social spending.

I've been worried that our Democratic leaders might accept a misguided compromise on Social Security, Medicare, and social spending that would be a strategic blunder that would do great harm to the Democratic Party.

To fracture and betray this re-united coalition will be extra shameful, in this case, because it will not be necessary. Former President Clinton handed President Bush an economic in surplus, which Bush then destroyed with large tax cuts and enormous "unfunded" wars and increases to defense spending, under the theory that social programs would be cut later in a crushing debt crisis. This was not a secret. Every Republican administration since Ronald Reagan and Lee Atwater has openly published this strategy.

Any Democratic politician who plays into this explicit Republican tactic now, will make our Party look weak and stupid, and also, will betray the middle class, working class, and poor voters that elected us after we drew clear battle lines and won an election on these themes.

We Democrats hold the winning hand, because we can let the Bush tax extensions, and payroll tax cuts expire, automatically, without any permission needed from the GOP, and then propose an even larger middle class tax cut to make up for both. Then let us see how many days Republican hold-outs can resist the outpouring of sentiment, enhanced by the daily media cycle of the bully pulpit and Democrats egging them on, when the default position is now a several thousand dollar a year return of taxes to previous rates, which will clearly be the fault of the Republicans.

In negotiation theory, one should always know ones "best alternative to a negotiated agreement, aka BATNA, and in this case we have the winning hand.  But, we may need urgent education and awareness raising for many Democratic and Republican politicians who "appear" to misunderstand the situation and the stakes, and may be inclined to false courage under the misimpression that it is Lincoln-like transcendence of partisan politics for the "good of the nation."  It will not be.

PhotobucketJust the base defense spending, Total Defense Spending adds $500 billion/year more

The unmentioned elephant in the room is an almost doubling of total defense spending for three off book wars that should be ending financially, not just in terms of troop commitments.  We've been spending near $100 billion/year each for the wars in Iraq, Afghanistan, and the "war of terrorism" such as putting dubious "fusion centers" in every state. The Republican plan here all along as been to trade such increases in defense spending for social spending. This unfair trade is not only a bad investment financially, but also is bad for our true national security, which in the long term, is directly contingent on a health economy, and healthy, well educated, high morale citizens who believe in the legitimacy of their own government.

My understanding from a comment last night is that we continue to spend over $80 billion a year in Iraq after troop withdrawals. In terms of economic stimulus those expenditures have much higher "multiplier effects" spent in the U.S. on social programs and infrastructure development at home than wasted overseas.

Politicians who mistakenly betray our middle class by cutting social spending rather than defense spending will be judged harshly by history. The Patriotic and smart thing to do is to balance budgets in ways that support Americans first and provide growth to our economy so we can remain competitive in global markets.

Extended (Optional)

Originally posted to HoundDog on Tue Nov 27, 2012 at 03:35 PM PST.

Also republished by Keynesian Kossacks, DK Poli, and ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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