Category: Politics

Keeping the faith

In a recent riveting analysis of decision making by President Obama, Praising the Hostage Takers, liberal Paul Leob painfully laments the President’s overweening zeal for compromise.
Will Obama ever hold the Republicans accountable for their reckless and destructive actions? No matter how outrageous their demands, he keeps giving them legitimacy, first resisting, then compromising, then praising the result as bipartisanship. He’s forgotten the basic lesson of negotiation — you don’t hand everything over before you start, particularly to people who have utter contempt for your values and goals. He’s also forgotten the importance of fighting for your principles, so people have a reason to support you.

As I write, top brass from both parties are scrambling to come up with something feasible by Monday morning.  Ultimately, the parties will strike an agreement on easing the deficit crisis, though it’s likely to be bad news for most of us, with options for changing the cost-of living formula for social security, applying a means test to both, and eliminating the mortgage deduction among those on the table.  Meanwhile, no tax increase on incomes above $250, 000.  It’s no secret there’s been a massive transfer of wealth going on to the upper class for some time, ultimately creating something like what you have in South America: you’re basically poor or well off.  The upcoming scenario simply expedites that trend.

In my own case, a retired prof with a still working spouse, my own income from social security and a retirement annuity invested in over the years has been declining even as inflation heats up and Medicare premiums and deductibles soar.  Meanwhile, I’ve not received any cost-of-living payout in social security due to inflation in the last two years. That doesn’t stop the Feds from taxing my social security heavily, as they count my wife’s income as total family income.  It’s worse for others.

The scandal is that fifty percent of Americans pay no tax at all.  Family size, mortgage exemptions, low wages, etc., contribute to this scenario.  Unlike South America, in our country, the poor get attended to and the wealthy get their loopholes.  Wall Street and the banks get their bailouts.  You and I, the middle class, we’re the pack mules

But I want to get back to Obama.  In campaigning for the presidency, he posed as the people’s protector.  On the other hand, he hasn’t walked the talk since getting elected. Loeb, gives us a disturbing litany of what the President has “compromised” away:

Obama’s almost pathological devotion to compromise started early in his presidency. Republicans and a handful of corporate-funded Democrats used the Senate filibuster to block action on issue after critical issue. Instead of calling them to account and marshalling public pressure against them, Obama responded as if their intransigence was reasonable, giving them instant political cover. He did this on health care, financial regulation, and attempts to pass a sufficiently large economic stimulus. On climate change, he tried to prove his reasonableness by allowing offshore oil drilling (just before the BP oil disaster) while securing not a single vote in return. Republican Lindsay Graham was planning to offer precisely this enticement to convince borderline Senators to support at least some price on carbon, and said Obama effectively killed the bill by leaving him with nothing to offer people Obama similarly refused to take a firm stand on ending the Bush tax cuts, which he could have simply let expire. He’s now retreating on the debt ceiling battle, saying he might have to sign off on a deal that cuts spending now a the vague promise of reforming taxes later.

Anything to get the deficit ceiling raised:  erosion of social security, betrayal of the environment, continuation of the Bush tax cuts, perpetuation of corporate loopholes, et cetera ad infinitem! Obama might take a lesson from Ronald Reagan, who raised the deficit several times during his presidency.  Up against it on several occasions, the Great Communicator would take his case to the American people.  And he always won.

Mr. President, call the Tea Party bluff.  No deficit agreement?  So be it! We’ll get through, but the Tea Party won’t.

Mr. President, if nothing else, exercise your Constitution option.  Raise the deficit!  Pay the bills!

We don’t need a Chamberlain buying peace for now, mindless of tomorrow. You don’t betray the American people to placate the opposition.

You want to be liked?  I tell you this: Keep your promises and to paraphrase Carole King, “they’ll come running.”

Do nothing Congress: let’s hope

 

While at the vet office this morning having our cat’s nails trimmed, l picked up the local paper and read the front page national news story:  “New report warns social security and Medicare could run out of money even earlier than feared.”  I’m of course, as you are, well aware of the media’s capacity for alarmist reporting.  Anyway, what a lousy way to start off a Saturday meant for more pleasant things like doing some gardening or watching the Red-Sox-Yankee volatile match-up. 

Still, this matter of our nation’s financial ills, how it all happened, and what we might do to preempt its becoming a contagion is serious business that we can’t simply ignore without putting ourselves at considerable risk for a precarious future of escalating expenses concurrent with diminishing income.  Today’s news story only underscores our economic cancer.  We may not be able to even sustain two enormously successful entitlement programs:  Social Security and Medicare, both of which are now projected to be depleted by 2036, or a year earlier than anticipated. 

As to Medicare, representative Paul Ryan (R-Wisconsin) has unleashed a storm of controversy, proposing to slash 5.8 trillion in federal spending over the next decade.  Presently, and this is real sticker shock, our federal deficit is 14.3 trillion!  Ryan’s linchpins focus on revamping Medicare and Social Security.  Medicare recipients would receive vouchers to help pay their medical costs.  It’s conceivable that Medicare patients might ultimately fork-out 68% of their costs, versus 25% at present.

Right now, cutting back on entitlements is a brave thing to do, fraught with controversy, and perhaps so frightening to public constituencies that Republicans may have assured Obama’s second term in a landslide.  Almost by way of hypocrisy,  even the Tea Party, whose focus is reducing government taxes through reduced spending, bristles at the idea of cutting back on Medicare and Social Security, a recent poll indicating that 70% of them are opposed to such measures.

As it stands right now, we have several unpleasant options:

  Increase payroll taxes for both programs and remove the current salary cap for Social Security, presently set at $106,900.  Republicans are adamantly opposed.  Democrats also are reluctant, except for the President’s proposal to levy a 2% increase on incomes above $250,000.  One problem here:  in running for his first term, Obama pledged he wouldn’t raise taxes on those making less than $250,000.

 Cut benefits.  In order to keep these programs solvent, some have said that cutbacks in Social Security, for example, need to be made in the 15% range.  This is doubtless DOA.

Ironically, the Republicans (and I write as an Independent) are responsible for a good deal of the budget debacle.  House Speaker John Boehner has recently said that “if the President begins the discussion by saying we must increase taxes on the American people–as his budget does–my response will be clear:  tax increases are unacceptable and are a nonstarter.”  (The President is actually proposing an increase on just 2% of wage earners.)

Laurence Mitchell of the Economic Policy Institute, hits the nail on the head, commenting that “In a way, all of this debate, all of this bravery is largely about paying for the Bush tax cuts.”  The facts are that keeping the George W. Bush cuts through 2018 will cost 4.4 trillion in revenue with its reduction of the top marginal rate from 39.6 to 35%. 

Of course if the Congress does nothing about revenue, the Bush cuts will expire at the end of 2012, resulting in 75% of the deficit problem being erased over the next five years, according to David Leonard (“Do-Nothing Congress as a Cure.”  New York Times, Apr. 13, 2011).  Hey, that’s not a bad thing!

I personally think we should all–not just the wealthy–pay a fair share in taxes, and I don’t like the Obama political game of playing one economic class against another.  As I pointed out in an earlier entry (April 18), 40% of Americans pay no federal tax at all, apart from  payroll taxes for Social Security and Medicare.

There’s no free lunch!  We all pay our share or we all sink together.