ONTD Political

Thrown off the austerity cliff

8:47 am - 11/15/2012

THE WALL Street crowd that tried to foist Mitt Romney on working people is now pushing hard for a budget deal that targets Social Security and Medicare--and President Barack Obama is meeting them more than halfway.

Never mind that millions of people turned out in the election with the expressed wish of stopping Romney and the Republicans from carrying out these kinds of attacks. The cuts are coming anyway, ushered in by Obama--unless working people organize through their unions, communities and organizations to demand that the bankers and business executives who caused this crisis pay for it.

To be sure, the president met with labor leaders November 12 to assure them that he's determined to hold the line on defense of so-called entitlements--programs that the overwhelming working people are eligible for as they age. Labor leaders emerged from the meeting saying that that president supported their calls to defend Social Security and Medicare.

But business had the last word--literally. The day after union officials cleared out of the White House, an all-star lineup of CEOs descended on Obama to push their plan for budget cuts intended to slash even more of what remains of the U.S. social safety net.

Duncan Niederauer, CEO of NYSE Euronext, the operator of the New York Stock Exchange, said that business wanted things done its way--or else. "We simply won't be investing in the United States," he told a reporter. "We will be investing elsewhere where we have more certainty of the outcome."


For his part, Obama said in a November 14 press conference that he's determined to let taxes rise for the wealthiest. He said that at the beginning of his first term, too--and then surrendered to Republican demands for an extension of all the tax cuts from the Bush years, including for the very richest.

Obama might hold out longer this time around. But the president made it clear that he's willing to entertain big spending cuts, too: "I don't expect the Republicans simply to adopt my budget. That's not realistic. So I recognize that we're going to have to compromise. And as I said on Election Night, compromise is hard. And not everybody gets a hundred percent of what they want, and not everybody's going to be perfectly happy."



Incredibly--but predictably--none of the housebroken White House press corps asked Obama about the contradiction in his campaign-trail promises to protect Medicare or Social Security and his openly stated desire to reach a "compromise" with Republicans for deficit reduction, which would cut precisely these programs.

The outlines of a so-called "grand bargain" between Democdrats and Republicans have been in place since August 2011, when Obama proposed a deal to Republican House Speaker John Boehner to cut the deficit by $4 trillion over 10 years--in part by slashing Medicare and squeezing Social Security benefits. It was only because the Tea Party-driven House Republican caucus objected that the deal fell apart.

The result of that standoff was a compromise that will lead to what's been called the "fiscal cliff"--an agreement to let the Bush-era tax cuts expire and to impose a 10 percent, across-the-board cut in government spending if Congress takes no action by December 31. The economic impact of these measures--taking place in an already weak recovery--could be severe. According to the Congressional Budget Office (CBO), the U.S. economy would shrink by 0.5 percent in 2013, as opposed to the 2 percent that most economist predict.

If it seems crazy to play with the U.S. economy like this, it is. But there's a political logic to it--make it appear as if there's no choice but to carry out a sweeping austerity program.

This is exactly the method the U.S. uses when it instructs the International Monetary Fund to squeeze some Third World government into making brutal cuts in social spending. It's what European authorities are doing in Greece, where austerity measures are required in order to get a debt bailout. The basic message is former British Prime Minister Margaret Thatcher's slogan: "There is no alternative."

There are, of course, differences between Obama and the Republicans on how to carry out austerity. The Republicans, who've built their political appeal on total opposition to tax increases--especially for the wealthy--want all the pain to fall on workers. Obama wants to spread out the pain over a longer period and restore higher tax rates on families making more than $250,000 per year. But the top tax rates won't go back to anything near their high points in the 1950s or 1960s, but to the moderate Clinton-era levels.

Obama's willingness to cut a deal with Republicans may come as a surprise to many, but the president's been angling to make this sort of agreement since he first took office in 2009 in the depths of the financial crisis. Back then, the budget deficit mushroomed not just because of the terrible effects of the recession--a collapse in tax revenues and a surge in the unemployment rate--but because the federal government, through the bank bailouts and other measures, effectively took hundreds of billions of private-sector debt onto the public books.

According to a tally by the Center for Media and Democracy the total cost of the financial bailout from all parts of the government--the Federal Reserve, the Treasury and more--includes $4.76 trillion disbursed, another $13.87 trillion that could be at risk, and $1.54 trillion outstanding. By comparison, total U.S. economic output in 2011 was just over $15 trillion.

But the bankers and the business leaders have no shame about demanding sacrifices from the rest of the population. So when a Republican landslide in the 2010 elections gave the right wing control of the House, Obama had the political cover to make the budget deficit deal that business had been demanding for years. Washington Post journalist Bob Woodward chronicled the effort at a budget deal in his book The Price of Politics. The president, he said, advocated "not doing anything too drastic in 2012"--an election year, after all--"then medium-tough measures in 2013 in spending...then taking on long-term entitlement."

"Long-term entitlement" is a euphemism for Social Security and Medicare--which means raising the age of eligibility for the health care for seniors and squeezing the benefits from both programs. Obama did propose raising taxes--but called for making $3 in cuts for every $1 in new taxes--with the aim of lopping $4 trillion out of the U.S. budget over a decade.

Comparing Obama's proposal to the program of the conservative "Blue Dog" Democrats, Woodward writes: "His Blue Dog had risen; under this framework, there would be pain for all."

On the campaign trail, of course, Obama repeatedly attacked Romney and his running mate, Paul Ryan, for wanting to wreck Medicare. But Obama was more candid in an interview with the Des Moines Register: "I am absolutely confident that we can get what is the equivalent of the grand bargain that essentially I've been offering to the Republicans for a very long time, which is $2.50 worth of cuts for every dollar in spending, and work to reduce the costs of our health care programs."

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ALL THIS won't go down well with the millions of people who rescued Obama from political defeat by turning out to vote despite the president's business-first economic program.

Van Jones, ousted as a White House adviser on the environment and co-founder of the Rebuild the Dream organization, declared recently:

We are still on a complete fighting posture because we knew we had to win the politics in November and then on the economy in December. For the progressives who threw ourselves on hand grenades for the president over the past 24 months and especially the past six months, we are not going to be happy at all if he turns around and takes a chainsaw to Medicare, Medicaid and Social Security in pursuit of some misguided so-called grand bargain.

The question is what organized labor and broad progressive organizations are prepared to do about it. Max Richtman, head of the labor-backed National Committee to Preserve Social Security and Medicare, said Obama assured union leaders that "whatever savings come out of those programs would not come out of beneficiaries or citizens, it would be focused more on providers."

Certainly there's good reason to squeeze health care providers that put profits ahead of patient care. But the health care companies will simply offer worse service as a result, leading to an effective rationing of health care for Medicare recipients.

Worse, the Obama "compromise" on Medicare and Social Security doesn't even begin to address the problem of a historic decline in tax revenues from corporations and wealthy individuals--the people with the money to really address the budget deficit.

And the notion of slashing military spending--$554 billion in 2012--to funnel resources to human needs is unspeakable in Washington. So, too, is boosting taxes on corporations. Obama and Romney both made a point of saying in their debates that they want to lower the corporate tax rate.

The money is there to solve the budget deficit. The challenge now is to build a movement that rejects the notion of "shared sacrifice" and put the squeeze on the 1 percent who are responsible for the recession and the miserable recovery.





Source

saint_monkey 15th-Nov-2012 05:11 pm (UTC)
The problem with compromise:

Working people want a piece of cake.

Big business wants the entire cake.

Obama will give working people half a piece of cake, and big business the remaining cake, and say, "this compromise was difficult, but successful, because no one got everything they wanted."
skittish_derby 15th-Nov-2012 05:55 pm (UTC)
its more like big business wants the whole cake, and working people want half the cake and obama gives 3/4 of the cake to the big business
kitanabychoice 15th-Nov-2012 05:33 pm (UTC)
Sigh. I know that voting for Obama vs. Romney was really the only choice I could make with what was at stake and being a WOC but damn if Obama isn't setting himself up to disappoint me again.
bananainpyjamas 15th-Nov-2012 05:43 pm (UTC)
Duncan Niederauer, CEO of NYSE Euronext, the operator of the New York Stock Exchange, said that business wanted things done its way--or else. "We simply won't be investing in the United States," he told a reporter. "We will be investing elsewhere where we have more certainty of the outcome."

I shouldn't be surprised given the source but that's not what was said in the link. That quote is talking about what would happen if the Obama and Congress don't manage to avoid the fiscal cliff and end up sending the country back into recession.

IDK, I'm slightly optimistic that as a second-termer Obama will have more freedom to force the Republicans to compromise. The fact that this fiscal cliff involves major tax increases should help force their hand.

hinoema 15th-Nov-2012 05:45 pm (UTC)
Yeah, I don't trust sources that compromise their own sources to construct a narrative.
farchivist 15th-Nov-2012 06:46 pm (UTC)
Correct. Also, when they talk about the deal that was offered back in 2011, they don't mention that Boehner has re-offered it now. Or rather, he tried. Boehner was trying for the $800 billion tax hike that was offered in August 2011...and Obama shot him down and said "How about 1.6 trillion instead? Yeah, I think so." This has gotten the Conservative Bass in a right tizzy.

To me, the upping of the ante signifies that Obama is perfectly willing to play hardball and dicker like mad. I don't think he's going to cave on this.
hinoema 15th-Nov-2012 05:43 pm (UTC)
Wow, you and these sources. Socialist worker? Not biased at all, nope.
halfshellvenus 15th-Nov-2012 07:34 pm (UTC)
No kidding. This is not a socialist country.

That doesn't mean most of us don't want better for our workers (or those who canNOT work), but socialism is not and never will be the goal.

There is, however, another continent where these ideals are readily embraced...
mirhanda 15th-Nov-2012 06:33 pm (UTC)
I'm not surprised really. While he's better than the pubbies, MARGINALLY, he's still in the pocket of big business. I hope congress will hold the line and not let them cut SS and medicare. Social Security has a $2.6 trillion surplus and can pay out every benefit owed to everyone for the next 25 years. That's what Big Business and the pubbies want to get their filthy hands on and what Obama is going to roll over and let them take from us.
fenris_lorsrai 15th-Nov-2012 06:47 pm (UTC)
One of the revenue sources that always seems to be missing from these discussions is permitting and leases for federal lands, which are RIDICULOUSLY cheap, especially for many minerals. The leases are understandably cheap to offset the cost of exploration... but the rates paid back to the government when they DO move forward are often ridiculously low.... so low the government would get a better return with a savings account!

Federal land is everyone's land and areas that DO have high value resources are let go for a fraction of what most people would ask for a lease on private land. some of these are renewable resources (grazing, logging), some are not. the ones that are finite should have much tighter contracts that kick a lot more back to the government. right now... well, some of the rates look like they belong in 1912.
skellington1 15th-Nov-2012 08:32 pm (UTC)
I think it's a combination of two factors -- very few people have any grasp of how complex government revenue and spending actually are, and the few who are quite aware of the low lease rates are benefiting from it.

I'd be happy to see them tied to market rates -- even to the low end of market rates. There's no reason any one individual or company should be benefiting disproportionally for land held in the public trust.
aviv_b 15th-Nov-2012 06:56 pm (UTC)
Uh no. There has been discussion on raising the eligibility age on social security and medicare but nothing along the lines of privatization or elimination. Frankly, social security is not only solvent for the foreseeable future, but could be solvent in perpetuity if people paid social security taxes on all of their earnings, not just up to a cap. I hope this is one of the areas where the rich will pay a little bit more.

The Medicare tax will also have to increase for everyone if its to be solvent. But that's still not elimination.
thecityofdis 15th-Nov-2012 07:26 pm (UTC)
lestat 15th-Nov-2012 09:22 pm (UTC)
lmao can this be posted in all of their posts from here on in?
wrestlingdog 15th-Nov-2012 09:42 pm (UTC)
DYING
celtic_thistle 16th-Nov-2012 05:02 am (UTC)
This gif is so appropriate for all of OP's posts.
crossfire 15th-Nov-2012 07:36 pm (UTC)
Okay. Who was it who had "9 days" in the "Time from the election until acmeeoy starts up their grudgewank against Obama" pool?

I had my money on 3 days. YOU DISAPPOINT ME BB ;-)
skellington1 15th-Nov-2012 08:29 pm (UTC)
I don't think the article writer is making their own point, honestly. Obama already threw back Boehner's offer, so he's clearly willing to push harder than he was in 2011. And I don't think anyone sane thought that we'd get through this with no cuts -- it's fine to talk a big game about purism, but some compromise IS actually required to get anything through the house. We just have to hope he starts his bargaining far enough left that they meet in the middle, not to the right -- and again, rejecting the Boehner deal he was willing to take before is a sign of that. Starting too close to the center has been a big problem over the last four years, and it makes compromise feel like a flat-out loss -- but it's not a given.

Also, writing like "the housebroken White House press corps"? Not really necessary to compare people to pets to make your point. (I'm also pretty appalled at "For the progressives who threw ourselves on hand grenades for the president over the past 24 months", but that's a quote, not something from the article author).
shhh_its_s3cr3t 15th-Nov-2012 09:01 pm (UTC)
I am giving my most serious Side Eye to this article and its source.... yeah SERIOUS SIDE EYE.
shortsweetcynic Re: Because Grudgewank Always Means a Macro Party!15th-Nov-2012 09:42 pm (UTC)
OMG, that kitten. :D
halfshellvenus Re: Because Grudgewank Always Means a Macro Party!15th-Nov-2012 09:58 pm (UTC)
It's the Ice-T one that I really love.

Completely clear, with no words at all. And it's not even "hammy"-- this looks like someone trying to restrain their WTF, and it's still leakin' out anyway.
ms_maree 15th-Nov-2012 11:20 pm (UTC)
This community is so blindly partisan it's ....just...honestly. If anyone wants to argue it's not then they are deluded.
kishmet 16th-Nov-2012 07:58 am (UTC)
I think it's tough for a lot of us because the GOP is so full of hateful vitriol about Obama (and, you know, everyone else). Sometimes I find myself with a knee-jerk defensive reaction to any criticism of Obama due to the fact that most of it in irl for me comes from fundamentalist racist misogynistic homophobes, or from libertarian racist misogynistic homophobes

Or some of it's also come from people who have no real clue about Obama's record and what he's actually managed to accomplish. I'm cool with critiques of his economic compromises and of course criticism of the drone strikes and Guantanamo, etc., but I really don't feel that at the time he could've done much more with the Affordable Care Act thanks to the Repubs pushing back against literally everything the Dems tried to put through

tl;dr sorry. But I do try not to be blindly partisan so much as defending the good I see in Obama - this year I was pretty open about supporting Jill Stein above all other candidates though, so it's definitely not that I think he's perfect.
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