Hunter Blair — The Trump administration’s infrastructure plan remains empty talk and will be paid for by cuts to programs that help working people

"Smoke and mirrors."

Economic Policy Institute
The Trump administration’s infrastructure plan remains empty talk and will be paid for by cuts to programs that help working people
Hunter Blair

Jessie Hellmann — White House: Trump hasn't shifted on not cutting entitlements

President Trump has not changed his position on protecting entitlement programs from funding cuts, White House press secretary Sarah Huckabee Sanders said Wednesday.

After last month's GOP victory on tax reform, many Republicans are calling for changes to the social safety net as a way to cut government spending. But, asked about Trump's repeated campaign pledge to protect Social Security, Medicare and Medicaid, Sanders said he doesn't support cuts to the programs.

"The president hasn't changed his position at this point," she said at a White House briefing, adding that conversations with lawmakers are ongoing.
Speaker Paul Ryan (R-Wis.) has set his sights on entitlement reform for 2018.

“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” he said in an interview last month.

Medicare and Medicaid “are the big drivers of debt,” Ryan said, “so we spend more time on the health-care entitlements, because that's really where the problem lies, fiscally speaking."

Ryan said Trump is beginning to warm to the idea of slowing the spending growth in entitlements....

The kicker.

The White House has said it doesn't consider slowing down Medicaid growth rates to be funding cuts....

The Hill
White House: Trump hasn't shifted on not cutting entitlements
Jessie Hellmann

Alicia H. Munnell — Social Security’s real retirement age is 70

Social Security’s retirement age is 70. The simple fact is that monthly benefits are highest at age 70 and are reduced actuarially for each year they are claimed before age 70. This is a relatively new development, which may explain why Social Security’s retirement age is the best-kept secret in town. But I think it’s time we told folks. And then we need to clarify what all this talk about raising the so-called full retirement age really means.... 

Social Security’s full retirement age used to be a meaningful concept. Before 1972, maximum monthly Social Security benefits were paid at 65, and monthly benefits were not increased for claiming later. In 1972, Congress introduced a Delayed Retirement Credit, which increased benefits by 1% of the full retirement age benefit for each year of delay. The result was that those who retired later got a little bonus for delaying. But a 1% credit did not come close to compensating for the fact that late claimers had to wait and would get benefits over fewer years. In 1983, the adjustment was raised to 3% and that percentage was increased gradually to 8% in 2008. At this point, the adjustment provided by the Delayed Retirement Credit is actuarially fair – that is, it keeps lifetime benefits constant for those who claim after the full retirement age. In doing so, the Delayed Retirement Credit has rendered the full retirement age a largely meaningless concept. It does not describe the age when benefits are first available. That is age 62. It does not describe the age when monthly benefits are at their maximum. That is age 70. It really does not have any meaning in terms of an official retirement age.

MarketWatch
Social Security’s real retirement age is 70
Alicia H. Munnell
(h/t Gaius Publius at AmericaBlog)

Mark Thoma — Democrats Will Have to Swallow Entitlement Cuts?

I honestly can't remember if I voted for Obama or Hillary in the primary, but if I voted for Obama, it was a mistake.

Economist's View

Democrats Will Have to Swallow Entitlement Cuts?
Mark Thoma | Professor of Economics, University of Oregon

Get ready for the sh*t storm. Any Democrat who votes for this will face a primary challenge from the new wave, and this issue will be chief focus of the presidential campaign in 2016. 

Democrats must realize that this is a GOP trap that Ryan is setting for them. Voting for entitlements cuts as a Democratic proposal in exchange for anything just hands the GOP a club to beat the Democrats with.

Social Security and Medicare still constitute the third rail of American politics. It's the GOP that wants to cut them while making the Democrats grab the third rail with both hands while standing in a puddle. What's not to like about that for the GOP and what's to like about it for the Democrats, other than to fund Obama's library and lucrative speaking tours upon his retirement, leaving the rest of the party holding the bag. Craven. And who does Gene Sperling represent and really work for? Wall Street, of course.

Dave Johnson — Republicans Demand Social Security And Medicare Cuts, Is It Reported?

Republicans are demanding cuts in Social Security and Medicare if Democrats want to change the terms of the “sequester.” I’m sure their Tea Party “base” would be shocked if they understood this. So would most Americans. So is the media giving Americans the information they need in order to make informed decisions?

Yesterday The Hill reported, in “House GOP says sequester is leverage in next budget battle,” that House Budget Committee chairman Rep. Paul Ryan is pushing for cuts in Social Security and Medicare:

In a meeting with House conservatives, Rep. Paul Ryan (R-Wis.), told rank-and-file lawmakers that, as the party’s chief budget negotiator, he would push instead [of killing Obamacare] for long-term reforms to entitlement programs in exchange for changes to sequestration spending cuts that Democrats are expected to demand.

[. . .] Rep. Matt Salmon (R-Ariz.) said that during the GOP meeting, Ryan pointed to sequestration as the party’s leverage with Democrats and said the Republican negotiators would not accept revenue increases in exchange.

“We’re going to try to push for some substantial reforms on entitlement spending and our backstop is sequestration,” Salmon said in describing Ryan’s remarks....

To many in the voting public the word “entitlements” does not translate to “Social Security and Medicare.” Ryan and the Republicans understand this. This is why they talk about “reforming” something that is not clearly understood as Social Security and Medicare.

So again, have any major news outlets explained to the public, using words that the public understands, that the Republican position in the current budget negotiations is a demand to cut Social Security and Medicare?

  Campaign for America's Future

Republicans Demand Social Security And Medicare Cuts, Is It Reported?
Dave Johnson

The obvious Democratic response is to accuse the GOP of attacking Social Security. Doh.

RJ Eskow — What Are Democrats in the Senate Smoking? Caving into Right-Wingers to Cut Medicare Would Be Political Disaster

Any scenario which leads to Social Security or Medicare cuts would be bad for seniors. It would also be bad for any politician who supported it.

A recent poll by Lake Research shows that 82 percent of all Americans oppose cuts to Social Security, including 83 percent of Democrats, 78 percent of independents, 82 percent of Republicans -- and, in one of the most startling findings of all, fully three-fourths of all self-described Tea Party members (74 percent). (Social Security Works has a video and a petition on this subject.)

Democrats hold the advantage on this issue right now, which means it's theirs to lose. There's a historical precedent: in 2010, after two years of presidential rhetoric about trimming entitlements, Democrats experienced a 20-point plunge on the question "which party do you most trust to handle Social Security?" Republicans responded with a thoroughly predictable, utterly insincere -- and very effective -- "Seniors' Bill Of Rights."

2010 is the year Democrats lost control of the House.

AlterNet
What Are Democrats in the Senate Smoking? Caving into Right-Wingers to Cut Medicare Would Be Political Disaster
RJ Eskow, Curbing Wall St. Project

More push back against the trial balloon Sen. Durbin sent up.

All the spin is wrong: The GOP shutdown was about more than tactics

The GOP's desperate to spin their shutdown in order to camouflage very real divisions. They do have one way out

Salon
All the spin is wrong: The GOP shutdown was about more than tactics

Brian Beutler

I would put it somewhat differently. The GOP's aim is to preserve Norquistism and get the Democrates to agree to cut Social Security. First, Norquistism is an iron clad rule since Poppy Bush broke his "Read my lips. No new taxes pledge." 

Secondly, the primary aim of the GOP is to end the welfare state created by New Deal, which means ultimately privatizing Social Security. They know that Social Security is very popular, especially with their older base. They cannot cut Social Security or Medicare alone, and they need Democratic leadership to do it.

Many Democrats realize that this is a trap and than if they agree to cut Social Security, especially if they propose the cuts as part of a Grand Bargain, then they will be beat over the head with it in coming elections.

The problem is that the Democratic Establishment is also aligned with the forces lobbying for entitlement cuts, that is, the wealthy donor who see the welfare state as increasing their taxes.

In addition, first Bill Clinton and now Barack Obama regards it as a matter of establishing presidential legacy as a Very Serious Person who dared to confront difficult political problems.

This may look like a Republican problem but it is a much more serious Democratic problem that could refashion the party in the future away from the Democratic Establishment. Which would be a good thing, but not at the expense of cutting Social Security and Medicare and "fixing the debt." 

The economic fallout would be horrendous if the government contribution is pared substantially. The GOP Establishment knows that and would try to increase military spending to offset the cuts in social programs, were this to happen.

Zach Carter — Why Democrats Might Cave On Social Security Cuts

Durbin said that Republicans had to put tax revenue on the table to get entitlement cuts.

Fox host Chris Wallace noted that Durbin has previously supported entitlement cuts, and asked why Republicans should have to give up tax increases to get something that many Democrats support. President Barack Obama has repeatedly endorsed Social Security cuts as part of budget deals, and Durbin acknowledged that he did support Social Security reforms.

"Social Security is gonna run out of money in 20 years," Durbin said. "The Baby Boom generation is gonna blow away our future. We don't wanna see that happen."

Huh?

Social Security will not run out of money in 20 years. The program currently enjoys a surplus of more than $2 trillion. Social Security will, however, be unable to pay all benefits at current levels if nothing is changed. If a 25 percent benefit cut were implemented in 20 years, the program would be solvent into the 2080s.

Craziness of economic morons. As Alan Greenspan testified to Paul Ryan, the issue is not affordability but rather the availability of real resources in the future. That will depend on economic policy now.

The Huffington Post
Why Democrats Might Cave On Social Security Cuts
Zach Carter | Senior Political Economy Reporter

Brett Logiurato — Paul Ryan Writes An Op-Ed On 'Ending The Stalemate' In Congress, And It Doesn't Once Mention Obamacare

Rep. Paul Ryan has a must-read op-ed in the Wall Street Journal tonight on ending the fiscal impasse in Washington.

It's perhaps more notable for what it doesn't once mention — Obamacare — as what it eventually proposes. That omission seemed to ignite the ire of conservatives Tuesday night. 

The key proposition in Ryan's op-ed, though, is a trade of entitlement reform for repeal of the sequester cuts. 

From the op-ed:

"For my Democratic colleagues, the discretionary spending levels in the Budget Control Act are a major concern. And the truth is, there's a better way to cut spending. We could provide relief from the discretionary spending levels in the Budget Control Act in exchange for structural reforms to entitlement programs."

Ryan also proposes a few ideas for entitlement reform — making wealthier Americans pay higher premiums for Medicare, reforming "Medigap" (Medicare supplement) plans to "encourage efficiency" and reduce costs, and asking federal employees to contribute more to their own retirement.

Ryan's entry into the current debate is significant — until now, the former Republican vice presidential nominee had been almost entirely silent....

Because of that clear omission, Ryan's op-ed was immediately slammed by conservative groups that have led the "defund" charge. 

Business Insider

Paul Ryan Writes An Op-Ed On 'Ending The Stalemate' In Congress, And It Doesn't Once Mention Obamacare

Brett Logiurato

Uh oh. Look out. Here's comes the Grand Bargain.

Dan Popkey — In Idaho, Boehner vows to succeed with entitlement reform this fall

Bonehead energizes the troops:

House Speaker John Boehner said Monday that getting the GOP-controlled House to agree to raising the U.S. debt ceiling will only come with a bipartisan deal to make cost-saving changes to Social Security, Medicaid, Medicare, farm programs and government pensions....

“I made up my mind that we weren’t going to kick the can down the road any more,” Boehner, R-Ohio, told a Boise lunch crowd at a fundraiser for Idaho’s 2nd District Congressman Mike Simpson. “We’re not going to inflict all of this pain and suffering on our kids and our grandkids.”

Translation: The establishments of both parties are preparing for a deal that benefits the plutocrats that they can each sell to their own base as the best deal that could be gotten. The good side is that both parties will try to gain maximum advantage, which is likely to scuttle the deal as it has in the past.

McClatchy
In Idaho, Boehner vows to succeed with entitlement reform this fall
Dan Popkey | Idaho Statesman

Reuters — IMF urges repeal of 'ill-designed' U.S. cuts

The International Monetary Fund urged the United States on Friday to repeal sweeping government spending cuts and recommended that the Federal Reserve continue a bond-buying program through at least the end of the year.

In its annual check of the health of the U.S. economy, the IMF forecast economic growth would be a sluggish 1.9 percent this year. The IMF estimates growth would be as much as 1.75 percentage points higher if not for a rush to cut the government's budget deficit.

The IMF cut its outlook for economic growth in 2014 to 2.7 percent, below its 3 percent forecast published in April. The Fund said in April it still assumed the deep government spending cuts would be repealed, but it had now dropped that assumption.

Before you get all excited:

The IMF said the United States should reverse the spending cuts and instead adopt a plan to slow the growth in spending on government-funded health care and pensions, known as "entitlements." The Fund would also like the United States to collect more in taxes....

"Now our advice is not just to slow down (budget cuts)," IMF Managing Director Christine Lagarde said at a news conference. "Our advice is also to hurry up: hurry up with putting in place a medium-term road map to restore long-run fiscal sustainability." 

Just as neoliberal as ever.

Reuters

IMF urges repeal of 'ill-designed' U.S. cuts

Anna Yukhananov

Michael Stephens — This Time Is Indifferent

Yet, revealingly, there are some deficit hawks who are treating the rapid shrinking of the deficit as bad news — and not for the Keynesian reason that this indicates the government is failing to do its part in supporting the economy, as Bernanke stressed in his remarks yesterday, but because the disappearing deficit is easing congressional pressure to pass “entitlement reform” (which, as we’ll see below, does belong in scare quotes)....

For the fauxsterian, the question of whether austerity can be expansionary, or whether economic growth falls off a cliff when countries’ public debt ratios surpass 90 percent of GDP, is really all beside the point. Deficit and debt hysteria have simply been a useful tool for pushing specific legislative changes that may or may or may not be related to the budget balance — changes that might be difficult to pass outside an atmosphere of imminent crisis.

A recent Washington Post column by Steven Pearlstein, “The Case for Austerity Isn’t Dead Yet,” more or less endorses this line. The problem with fiscal stimulus, the column tells us, is that it works: it boosts short-term economic growth, thus easing the pressure to pass “structural reform.”

Multiplier Effect
This Time Is Indifferent
Michael Stephens

Paul Krugman: The 1 Percent’s Solution

Has Paul Krugman been reading Rodger Malcolm Mitchell and getting that the problem is class warfare perpetrated by the 1%? Sounds like it.

Economist's View
Paul Krugman: The 1 Percent’s Solution
posted by Mark Thoma | Professor of Economics, University of Oregon

Robert Reich exposes Obama's offer to cut Social Security as a give-away

John Boehner, Speaker of the House, revealed why it's politically naive for the president to offer up cuts in Social Security in the hope of getting Republicans to close some tax loopholes for the rich. "If the president believes these modest entitlement savings are needed to help shore up these programs, there's no reason they should be held hostage for more tax hikes," Boehner said in a statement released Friday.

House Majority Leader Eric Cantor agreed. He said on CNBC he didn't understand "why we just don't see the White House come forward and do the things that we agree on" such as cutting Social Security, without additional tax increases....

"I'm encouraged by any steps that President Obama is taking to save and preserve Social Security," cooed Texas Republican firebrand Ted Cruz. "I think it should be a bipartisan priority to strengthen Social Security and Medicare to preserve the benefits for existing seniors."...

They're already characterizing the president's plan as a way to "save" Social Security -- even though the cuts would undermine it -- and they're embracing it as an act of "bi-partisanship."

AlterNet
Republicans Have Drooled Over the Idea of Slashing Social Security for Years, and They've Found Their Ideal Partner in Obama
Robert Reich | Chancellor’s Professor of Public Policy at the University of California at Berkeley, and Secretary of Labor in the Clinton administration

Michael Hudson — Obama’s Catfood Reform

Video and transcript.

Michael Hudson
Obama’s Catfood Reform
Paul Jay interviews Michael Hudson

Yves Smith — Obama Wants to Be the President Who Rolled Back the New Deal

The president wants to cut Social Security and Medicare to protect the investor class.
There is no more pretense possible. As we’ve warned for some time, Obama is eager to put a notch on his belt by being the President that rolled back the New Deal programs that helped create broad-based middle-class prosperity and dignity. He’s cast himself as an adult inflicting discipline on profligate Americans....

We now have the absurd spectacle of Paul Ryan’s budget being to the left of Obama’s on the issue of Social Security and Medicare. If the Republicans have an iota of sense, they’ll take full advantage of the weapon Obama has handed them. Every poll ever done over the last 50 years shows substantial majorities favoring continuing and increasing Social Security and Medicare provisions, and either increasing taxes or cutting other spending to do so....

But Obama wants his legacy and the public be damned. And Bill Clinton proves that being a front person for neoliberalism is a very lucrative post-Presidential line of work....

...the battle to get Obama’s fondly-desired Social Security cuts passed means persuading legislators to take a memorable vote that their constituents are likely to hold against them....

This “have old people die faster” plan will be contested. The normally complacent public is unlikely to sit by quietly and have its ox gored. Even the Times is not trying to soft pedal what is going on; it’s not using the anodyne language of “chained CPI” but “cutback” and in the headline, no less. 

AlterNet
Obama Wants to Be the President Who Rolled Back the New Deal
Yves Smith

Ryan Grim — Chained CPI Only Acceptable As Part Of 'Balanced Package,' White House Says

OMG. What's the superlative of moronic?

The president's move makes him the first Democratic president to propose cutting Social Security.

House Speaker John Boehner (R-Ohio) responded to the president's offer on Friday by suggesting that if he wants to cut Social Security, he should just go ahead and do it. “If the president believes these modest entitlement savings are needed to help shore up these programs, there is no reason they should be held hostage for more tax hikes. That’s no way to lead and move the country forward," he said in a statement. 

There it is, folks. President Obama has just dropped a bomb on the Democratic Party. It will be interesting to watch the fall out. This is the moment of truth for Democratic politicians.

The president knows exactly what he is doing. This is a direct strike at the left in an effort to solidify the Democratic Party as the moderate Republican Party in the belief that American politics is center right, ending the Democratic coalition built by FDR in an effort to "capture the center."

Will the base roll over again to prevent the take over of the country by right-wing extremists? I would not be putting any money on that bet. There is already a firestorm rising. Obama Budget Proposal Cuts Are 'Unconscionable,' Says AFL-CIO. Make that moronic and unconscionable.

The Huffington Post
Chained CPI Only Acceptable As Part Of 'Balanced Package,' White House Says
Ryan Grim