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Robert Reich
NationofChange / Op-Ed
Published: Friday 21 December 2012
Apparently the President is now offering to continue the Bush tax cuts for people earning between $250,000 and $400,000, and to cut Social Security by reducing annual cost-of-living adjustments.

Cliff Hanger: The President’s Unnecessary and Unwise Concessions

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Why is the President back to making premature and unnecessary concessions to Republicans?

Two central issues in the 2012 presidential election were whether the Bush tax cuts should be ended for people earning over $250,000, and whether Social Security and Medicare should be protected from future budget cuts.

The President said yes to both. Republicans said no.  Obama won.

But apparently the President is now offering to continue the Bush tax cuts for people earning between $250,000 and $400,000, and to cut Social Security by reducing annual cost-of-living adjustments.

These concessions aren’t necessary. If the nation goes over the so-called “fiscal cliff” and tax rates return to what they were under Bill Clinton, Democrats can then introduce a tax cut for everyone earning under $250,000 and make it retroactive to the start of the year.

They can combine it with a spending bill that makes up for most of the cuts scheduled to go into effect in January. Republicans would be hard-pressed not to sign on.

Social Security should not be part of any such deal anyway. By law, it can’t contribute to the budget deficit. It’s only permitted to spend money from the Social Security trust fund.

Besides, the President’s proposed reduction in annual Social Security cost-of-living adjustments would save only $122 billion over ten years. Yet it would significantly harm the elderly.

It defies logic and fairness to give more tax cuts to the wealthy while cutting benefits for the near-poor.

The median income of Americans over 65 is less than $20,000 a year. Nearly 70 percent of them depend on Social Security for more than half of this. The average Social Security benefit is less than $15,000 a year.

Even Social Security’s current cost-of-living adjustment understates the true impact of inflation on elderly recipients, who spend far more on health care than anyone else – including annual increases in Medicare premiums.

Hands off Social Security. If the Republicans are willing to raise tax rates on high earners but demand more spending cuts in return, the President should offer larger cuts in defense spending and corporate welfare.

This article was originally posted on Robert Reich's blog.



Author pic
ABOUT Robert Reich

 

ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org. Robert Reich's new film, "Inequality for All" is available on DVD
and blu-ray, and on Netflix in February.

The ONLY reason I voted for

The ONLY reason I voted for Obama and the Democrats is that the Tea Party and its fringe were so appalling as to make me physically and psychically ill.

We must admit that when gut instinct, education, ambition, and experience are to go-along with the established, hierarchical structure we can not expect, nor will we achieve anything different from Obama's continuing capitulation to a system and process that supports his perspective and orientation.

We have no alternative until we are at or over every cliff. The name of the "game"-process is evolution--incomplete as it is.

I think, though, that his father is turning in his grave.

Next election, when the Republicans win, the trek of capitalist enslavement just ticks up a tad. No change in trajectory.

Obama is doing a great job of

Obama is doing a great job of exactly what he has been paid to do - give the 1% exactly and everything they want. Period.

Republicans and Democrats are working together as the vanguard of the 1% assault on the poor and middle class.

Pelosi said two days ago exactly what she said during the health care 'debate' that liberals (vs. progressives in the Chris Hedges sense) might not like losing Single Payer and then the Public Option, but they would take whatever crumbs the Democratic National Party would give them - and be happy with it.

Two days ago she said cuts in Social Security would make it 'stronger.' That is a Republican talking point. She also said that liberals might not be happy with Obama's concessions, but nevertheless would continue to support the Democratic party. Take your little crumbs, go home and be happy with them weak minded liberals!

Weak willed liberals and thuggish conservatives now have only themselves to blame. And they've got 4 more years to wallow in it.

Idiots!

Absolutely!

Absolutely!

Here are a few points a new

Here are a few points a new FDR might offer:
1)- End TARP, replace Bernanke with those I suggested above and raise interest rates to a point which is generating 5% earned interest releasing $385 Billions to discretionary spending into the marketplace?

2)- Create State Banks ala North Dakota, in every state? The State Bank model in North Dakota has worked profitably for 96 years with no semblance of the problems and avarice of corporate banks. Why not has each state create a Public State Bank and nationalize all corporate banks?

3)- Make the energy use-free-Geothermal HVAC the standard by law and cap prices on it so that the grants given for it are not eradicated by greedy HVAC Installers simply raising their prices the grant amount of 30%. Lower energy costs by mandating Insulation of R-30 in walls, R-50 to R-65 Ceilings and build smaller houses of stone/brick? Doing so would perk the building and rehab markets and diminish energy use considerably. Fire all certified appraisers, which appraise homes and replace them with architects, with no ties to banks and builders, thus eliminating the gigantic corruption, which was ignored during the 2000’s.

4- Either by an Executive Order or a new Bill ad huge excise taxes on all imports and currently outsourced jobs which would bring outsourced goods to meet or exceed prices of similar goods made in the USA and do not exempt the robber barons who claim that the pauper wages they are paying workers in the Northern Marianna Islands are just and honest. I suggest Union scale Plus 15% for each Job whether by a corporation of contractor.

5)- Because of the low tax rate for the upper 1% they are each saving, an average $48 million a year, every year since the Bush tax cuts for the very rich. End that discrepancy, now by Executive Order or Bill.

6)-Tie ALL pensions, including state and federal and Social Security to pensions of the US Senate. Tie all healthcares for all citizens, to that of the senate also

7)-Edit the FED, Nationalize all of the banks. Opt for Public banking in each state. Remand Money Creation to the Government. Create enough money to finance Social Security, Medicare and all pensions into a Federal Program.

Raise interest rates to at least 5% earned on savings which will create $385 Billions a year in discretionary income help boost sales and jobs.

Between gasoline at a 9,000% profit margin (it is 12c cents a gallon in Venezuela) and I see it's base cost every time I trade Commodities at 2.6-3.6 a gallon after packing/shipping and no interest income and damage to pensions, SS and Medicare, the middle class will be gone with the last of my generation

Right on target RR. He did

Right on target RR. He did the same thing on the "Debt" issue ignoring many phone calls to the White house by friends, colleagues and others, to simply do an end run around the Republicans, ala Harry Truman by invoking The 14th amendment, article 4. He ignored many who brought it up and when finally asked with camera's on he did not do so, he sarcastically, arrogant reply, said, ala Marie Antoinette falsely attributed "let them eat cake, "Because I chose not to..." He lies and has always wanted to destroy Social Security and Medicare. He is a Bilderberg, Club of Rome, Trilateral Commission, depopulation crazy for which I did NOT vote the 2nd time, voting instead 3rd Party.

This is why I voted for Nader

This is why I voted for Nader in 2008. Unfortunately, there wasn't a viable alternative this election, the third party candidates all getting well under 1 %. MM, the main thing wrong with the UN is that the US and other security
council members can veto anything that the rest of the world wants to do, thereby crippling it. Maybe it would be a good thing if we got out. Then maybe they could get something done.

I find myself in agreement

I find myself in agreement with SUNFLOWERBIO. Many excellent points amongst the comments...as well as a few from somewhere deep in "right" field.
Please forgive me for sounding cliche but wouldn't it "really" be prudent to remember the "original" definition of Fascism coined by Benito Mussolini.
"Corporate owned Government." For all intents and purposes, isn't that what we have now? Didn't this country once wage a horrific battle to "stop" this type of tyranny? Do "we" want to live in a country so governed? Isn't it about time to put a stop to it? Is everybody up on Fascist movements in a historical sense?
Do you know how they turned out? The clock is ticking.

Reich asks WHY Obama is

Reich asks WHY Obama is making unwise and unnecessary concessions.

He should have asked WHY Obama is AGAIN making unwise and unnecessary concessions.

Obama fans point to the easy answer, the one Dems want promoted, which is to say the intransigence of Republicans. And so Obama fans play the role of sheep who acquiesce to the compromises.

Thus the obscene disparity in income and wealth grows wider, year by year, decade by decade, and will again in 2013 and 2014 no matter the outcome of "fiscal cliff" games.
Every 4 years the duped sheep preach against the critics of duplicitous and manipulative Democrats, often making the "lesser evil" argument. They will do so again in 2016.

The primary reason Obama is AGAIN making unwise and unnecessary concessions is this: neither the preponderance of independents nor even registered Dem voters are demanding a REVERSAL of the decades-long transfer of wealth and well-being from the 99% to the 1%.

Most are oblivious to the fact Obama now seeks only to slow the speed of it. Obama and his propagandists are not making that obvious, and neither are mainstream corporate news outlets. Not even occasional critics like Reich are making that clear. Ask yourself why.

Obama truly needs to watch

Obama truly needs to watch the movie "Lincoln" for insight into what makes a great President. It's most definitely not "bipartisanship." Had Abraham Lincoln been "bipartisan," slavery would not have ended... and there most likely would not be a United States of America today. I'm still waiting for the "change you can believe in" that Obama promised in 2008, but the only "change" I've seen has been more handouts to insurance, banking, and brokerage companies. One simple reform that would save Social Security would be to tax ALL individual income, with no ceiling and no limitation to "earned income." Considering the massive dismantling of pensions by corporate employers, there should also be a Social-Security tax on corporate earnings.

Too bad, Professor Reich,

Too bad, Professor Reich, that Obama's not heeding your advice. Just how far can he take his move to "reach across the aisle"? Like most people who voted for him, I'm getting impatient. I don't regret that I voted against Romney, but the President should know if he doesn't deliver what was promised, or even implied, he's going to have millions of pissed-off voters who never want to hear his name again.

Cutting benefits for SS is on the table? Social Security never added a penny to the deficit, so why should their modest benefits be cut to pay down the deficit?

Michele, buck up your husband and tell him to start showing he has some cojones. This shilly-shallying is getting us nowhere and is simply wearing on the nerves of the whole country. Tell Boehner to take a hike and let's fall off the fiscal cliff, if that's what he and his Tea-Party yahoos want. Maybe then we can finally get those loafers out of the House and get some working members elected.

Most of the debt we hold is

Most of the debt we hold is money owed to Social Security, Civil Service Pensions and Military Pensions. Implementing the "Chained CPI" in calculating increases is actually forcing those recipients to PAY FOR THE DEBT CREATED WHEN POLITICIANS TOOK THE MONEY THEY HAD PAID INTO THEIR RETIREMENT FUNDS! Can you say Chutzpah? What kind of a plan forces people to pay back the money that was stolen from them? Unfair and immoral!

Increases to Social Security benefits have not kept up with inflation in recent years - and now you want to manipulate the calculations to cut them further? Nonsense! Social Security is not the source of the deficit - and a few minor changes can keep it solvent for decades. Simply remove the cap on SSI payments allowing people making more than $110,100 a year to not pay SSI taxes on 100% of their income. Everyone making $110,100 or less pays the tax on 100% of THEIR income - why should rich people get a break the majority don't?

Large numbers of the very wealthy don't get "Wages" - their income is from Capital Gains - which means they pay ZERO in FICA taxes on that income - unlike the majority of Americans who pay FICA taxes on 100% of their income! Extend FICA taxes to Capital Gains and there will be plenty of money to pay for Social Security and Medicare benefits without any cuts.

Finally - implement the "Robin Hood Tax" of 1/2% on all financial transactions! It will produce significant amounts of revenue from the right source - the financial speculators who crashed the economy while benefiting enormously from it before, during and after the crash they caused!

Stop protecting the rich and screwing the poor and middle class!

. . The problem is Boehner

. . The problem is Boehner walked out - and that calls off all bets. By walking out there is now nothing on the table. Boehner wanted plan B and that is what he got. his party turned it down and with it they refused all / everything that was negotiated BACK TO GROUND ZERO
If the Presdient takes it any other way he's playing the part of a fool and selling the people out. . . .

How hObama inteprets the

How hObama inteprets the Gettysburg address:

"that I here highly concede that all those dead struggling for justice shall have died in vain—that this nation, under wallstreet corporate rule, shall abort all attempts of freedom and equity—and that socialized elistist government of the few, by the few, for the few, shall not perish from the earth. Money, money, money for me! Yippee!"

The president has definitely

The president has definitely cast his lot with the republicans. If it walks like a chicken and talks like a chicken then it's a chicken; time to switch parties, Barach.

Minnesotamark: Reform what

Minnesotamark: Reform what entitlements? What, exactly, do you mean by "reform"? Remember, our budgets have lost several trillion dollars since the Reagan admin., to tax cuts to corporations/the rich. Every one of these generous tax cuts was made on the excuse that "it's necessary for job creation." Decades of corporate tax cuts have actually left us with far fewer jobs, at worsening wages. Instead of taking from the poorest, let's start requiring the richest to assume some responsibility.

i agree that many loopholes

i agree that many loopholes are rediculous and the rich can and should pay more, but is there enough from the rich to get to the point of paying off some of the national debt. also just as the conversation on entitlement reform needs to be specific, the loop holes discussion needs to be done carefully. example some think it is a loop hole to write off capital equipment quicker to encourage the spending on capital equipment which always leads to more jobs, One mans loophole is anothers entitlement reform. In the end is is not about shared sacrifice. Being a life long conservative I have now become appaled by the extremes on both sides. those who say no taxes for the rich are perceived as clueless and/ or greedy , and those who say we voted to solve the problem by taxing the rich and the corporations are both missing the point. the govermant needs more revenue(higher tax rev), less spending, and more efficeicey. I hate paying income taxes, 30K last year, but i would pay more if it were to pay down the debt or if I was not so aware of the incredible ineffeicency and waste that seems naturally to come with goverment spending. We need balance, or true austerity measures are in our future. ( spelling has never been my strong suit)

This is how welfare "reform"

This is how welfare "reform" began, with concessions (benefit cuts/freezes) to the right wing, leading to wiping out General Assistance, and then "reforming" AFDC right out of existence. Back then, before Clinton, the consensus was that there was no way that Americans would simply throw impoverished fellow citizens off the cliff -- especially babies and children. We were wrong. What might save Social Security is that the middle class depends on it. At the least, how can most families afford to provide for aging and disabled family members? Just what happens from here depends on us. We CAN say no to any/all cuts, demanding that the richest/corporations, who have benefited so extravagantly from tax cuts, etc., in recent decades, start pulling their weight. If they don't want to pay taxes, they have the means to leave.

my plan< 1. We need to cut

my plan<
1. We need to cut spending miitary, spending is ruining us but no one wants to talk about it seriouly, redUce overseas depLoyment by 50%. Military spending helped destroy the old soviet union and will do the same to us. Cut out of the usa spending by a full fifty %
2. reform entitlements because those of us in the taxed class where we make 80-200K pay taxes that hurt, reject the idea that 48% pay nothing, sure the rich need to pay more but everyone needs to pay something even 1%.
3. legalize and tax pot. this will reduce spending and raise revenue and stop with the charade of stopping pot when anyone can get it in any county in the US within a couple of hours.
4. Kick out the UN and stop subsidizing a worthless organization, support charities that do the good work. Our support flies in the face of what most americans stand for. This is a corrupt organization that is no longer relevant.
5. increase the employee contributions to social secirty by 1% including on welfare and unemployment payments, because we cannot keep adding to the number taking out and not increase the inflow. Take the cap off of employee contrinuions on the high side. add a month per year to the retirement age for the next years with a ladder for early retirement. Maybe inclome asset test the starting age for benefits.
6. put congress on the same retirement and health plan as the military, cut the eligibilty minnimum because we do not want them hanging around congress too long.
Immediately reform immagration to allow for skilled and educated workers who go to college here to work here toward citzenship or green card or stop education our competiors n the taxes of the US tax payers. This makes no sense, to do what we are doing now.
STOP THE INCIVILITY ON THESE CHATS, HOW ABOUT A CIVIL DISCOURSE.

Are you really from

Are you really from Minnesota, Mark? Most Minnesotans can articulate exceptionally well and produce accurate syntax and grammar. You produce decent points but...?

I'm in agreement about

I'm in agreement about incivility, MARK. And you have some good suggestions among some I don't care for at all. For example, I think pot should be legalized and taxed, and we should stop wasting money and lives by criminalizing the recreational use of a drug that is less harmful than alcohol.

I don't think kicking out the UN would be a good idea. Anything that encourages dialogue instead of warfare should be encouraged, no matter how disappointing the results.

Cutting our military spending is a given, and we have to stop being the policemen of the world. I think we're wasting time, money and lives by continuing in Afghanistan. We disrupted al-Qaeda, eliminated many of its top leaders, including bin Laden, and that's about all we can accomplish. Once we pull out, as we definitely should, they'll continue oppressing women and serving warlords, so it's a lost cause, and we should accept it.

About "reforming entitlements." For me, a retiree, that's code for cutting benefits. Look, I paid into Social Security all of my working life, and I was never on welfare, and never got an Unemployment check. And I paid into Medicare for decades. I don't have the retirement cushion I expected to have when I was younger, due to an over-generous divorce settlement to my wife after 30 years together. I always had private health insurance, and it was easier to get doctors then than now, when I'm on Medicare. And every month I have around a hundred dollars taken out of my SS to pay for premiums for Medicare. I don't look on Medicare as some kind of charity or welfare. And in the small city I live in now, it's difficult to find doctors who will accept any more Medicare recipients. So it's not a great thing, and doesn't pay for everything I would like to have, but it's better than nothing. ( I survived colon cancer and a heart-attack, both while I was a salaried employee, not while retired and on Medicare.)

The real way to cut expenditures on Medicare is to cut the exorbitant profits of our hospitals and physicians, along with the cost for drugs from Big Pharma. And increasing the age for qualifying for Medicare would be counter-productive, since it would only increase the health problems of the elderly, thus adding to later expenses.

But Social Security? Look, Social Security never added a cent to our budget deficit. Instead, the SS Trust Fund has been robbed by various administrations to add to the General Fund. It's not fair or just to now start robbing from Social Security recipients because a conservative Republican launched two unpaid wars and spent money like it grew on trees.

Taxing Unemployment or Welfare? That could just have the effect of decreasing those benefits, so why not just decrease them outright instead of all that fooling around to have the government collect taxes on its own payment to recipients?

47% or 48%? Now you're almost echoing Romney. Those who don't pay income taxes include a lot of retirees, including veterans, and their incomes now are too small to have to pay income taxes on. But all of those people still have to pay sales or gross receipts taxes, excise taxes, gasoline taxes, license fees, etc., so they shouldn't be cast as people just floating through life. (Try "floating" on below-poverty incomes if you want to test it.)

No, "reforming entitlements" just sounds like Republican double-talk for cutting benefits for our vulnerable citizens who earned enough working credit to qualify for Social Security retirement benefits.

Ron in NM...you always have

Ron in NM...you always have great insights and this time again-you are spot on, and well stated. Thanks for sharing!

People who don't pay income

People who don't pay income tax still pay lots to run the government, even in states (there are a few) where they don't have a sales tax. There are fees for everything now, and the poor people pay included fees and taxes in goods and services that they can't avoid, like gasoline where they can't take public transportation, for example, to get to work, where payroll taxes are withheld. Those 48% that pay "NO TAX" in fact, pay a lot more of their money every year to keep this country running than, for example, Mitt Romney does of his total.

Excellent points. I have

Excellent points. I have posted similar ones. There are many hidden fees, taxes, and licenses that even the poorest Americans pay that support gov. No one gets a free ride, excerpt maybe the super rich.

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