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Obama to Progressives: “Campaign Isn’t Over”

Official White House Photo by Pete Souza

Obama “wasn’t talking about what was on or off the table” and didn’t discuss specifics in terms of Social Security, one participant said. [The Hill]

THE REPORTS out of the meeting with progressive leaders and unions revealed a couple of things. President Obama told the group at the White House that he won’t budge on rescinding the Bush tax cuts for the wealthiest. How he’s going to get that done is unknown. What Obama plans to do with entitlements, specifically Social Security, is unknown.

However, the Huffington Post’s Sam Stein and Jennifer Bendery offered a different take from The Hill, getting one unnamed source in the meeting to give a hint on Social Security, which was not confirmed as of this post.

The first source said that the president “seemed to agree that Social Security” should not be part of any grand bargain because it “didn’t add to the deficit.” [Huffington Post]

This is exactly correct. There is no reason to make Social Security part of any “fiscal cliff” push for a grand bargain. “Seemed to agree” means absolutely nothing.

From the sounds of what’s being reported from the Huffington Post and The Hill, everyone attending the meeting with President Obama on Tuesday was in an all hands on deck mode.

In the process of putting together a far-reaching piece of legislation, the president will have the help of the progressive community’s political arms. All of the meeting’s attendees pledged to keep their election-season campaign apparatuses intact for purposes of drumming up support for the president’s budget priorities.

The President is right, the “campaign isn’t over” and that goes both ways for the coalition willing to take on the White House where Social Security is concerned, led by people like Senators Sherrod Brown, who won a tough race in Ohio, and the stalwart fighter Bernie Sanders. A specific concern is COLA, cost of living adjustments, which add up to significant money for fixed income elderly, especially women.

I’ve quoted “feminist economist” Susan F. Feiner before, but here she is again:

Listen up, sisters! Deficit hawks will eat your lunch, your kids, your jobs and your retirement. [...] Today’s deficit hawks (and way too many Democrats are flying with this flock), fundamentally and deliberately misinform by insisting on a fictional symmetry between private sector (household and corporate) bookkeeping and the U.S. federal debt.

… Here are the facts: U.S. government borrowing creates interest-bearing assets. The bonds are bought with dollars, the interest on them is paid in dollars and, at maturity, the bonds are paid off in dollars. Since the U.S. government is both sovereign in its own currency and the sole issuer of dollars, it can never run out of them. How could it?

Don’t think printing presses here: Federal debts are paid off by Treasury clerks making a few clicks on computer keyboards–keyboards identical to the one I’m typing on now.

In contrast, families and businesses have to earn income or sell assets to get dollars to pay off debts. The federal government does not face any such constraint. It can spend as much as it likes and borrow as much as it likes. With so many people out of work–nearly 30 million and counting—and so many firms operating well below capacity, there is no danger of inflation. So, right now, government borrowing and government spending will do one thing and one thing only: It will pump up aggregate demand, call jobs into being and reduce economic pain. Our children will be better off.

Meanwhile, the ceiling limiting the federal debt is an arbitrary constraint.

[...] Fiscal austerity–aka, reducing the deficit–endangers our lives. Deficit spending lies behind virtually all the social services, public amenities, and consumer safety standards that distinguish the U.S. from Rwanda, Bangladesh or Guyana. The Chicago Tribune recently reported that Congress is “moving to eliminate the only national program that regularly screens U.S. fruits and vegetables for the type of E. coli that recently caused a deadly outbreak in Germany.” Clearly, this $4.5 million program is too expensive. (Note to reader: $4.5 million is just over half the median pay for top executives at the nation’s 200 largest firms, according to The New York Times. Executive pay is up 23 percent over 2009. What if each of these guys chipped in a measly $22,500 so the rest of us could eat untainted food?)

The possible COLA (Cost of Living Adjustment) cuts impact women more than anyone.

Research from IWPR has shown the current Social Security program is a mainstay for women, and these findings have been supported by research from other organizations. Adult women are 51 percent (27 million) of all beneficiaries, including retirees, the disabled, and the survivors of deceased workers (52.5 million). Women are more likely to rely on Social Security because they have fewer alternative sources of income, often outlive their husbands, and are more likely to be left to rear children when their husbands die or become permanently disabled. Moreover, due to the recession many women have lost home equity and savings to failing markets. Older women–and older low income populations in general–have become more economically vulnerable and dependent on Social Security benefits. — IWPR

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10 Responses to Obama to Progressives: “Campaign Isn’t Over”

  1. Cujo359 November 14, 2012 at 12:35 am #

    Ms. Feiner is absolutely correct – the government doesn’t have to worry about money and debt the same way we do as citizens (whether corporate or individual ;) ). Government borrowing and spending can have an effect on inflation and interest rates under some conditions, but we’re not in those circumstances now. I wish that more politicians could grasp this basic notion, but they seem to be beyond reach.

    As for progressive organizations being in “campaign mode”, good luck with that. What these campaigns always seem to end up being is support for whatever the Obama Administration comes up with, no matter how little resemblance it bears to progressive policy. I already don’t trust those organizations, and that’s not going to change easily or quickly.

  2. fangio November 14, 2012 at 12:47 am #

    There’s already some talk floating around that they might raise the cap at which higher rates kick in. I’m not so sure that’s such a bad idea; two hundred and fifty thousand is not really wealthy these days.

    • Cujo359 November 14, 2012 at 1:06 am #

      Nor do I. There’s a long-term problem looming with Social Security (I remember it being about the same time as UNIX clocks wrap around, say 2035 or later), but a small increase in the withholding cap now would take care of it.

  3. Art Pronin November 14, 2012 at 1:57 am #

    The salon pieces on the meeting had some added juice. Trumka addressed chained cpi saying it was a non starter and a cut. For Trumka if any of these prgrams are targeted his org which is still in the field in blue collar swaths of america will go door to door, run on air etc to press ds and rs to back off.
    On ed Schultz aother labor leader said he is ready to order hsi troops still out in campaign mode all over to launch protests etc.. against a grand bargain if ss etc is targeted.
    we shall see. I fear the deed is done. but doesnt matter. we are going to fight like hell over the principle of this notion

    • Taylor Marsh November 14, 2012 at 8:31 am #

      I’ll believe Trumka when he actually DELIVERS, same goes for other union leaders.

      They’ll get mentioned when they actually take on Democratic power instead of aiding and abetting it.

  4. TPAZ November 14, 2012 at 4:56 am #

    We’re screwed. Obama will fold at the first chance he gets (because he wants to). This is not a prediction it is past performance for the POTUS.

    Turn on CNBC and every day, all day long, two-bit CEOs pontificate on what the government should cut and what individuals must give up to avoid missing the budget deadline (Fiscal Cliff is a Jerry Bruckheimer film title to sell tickets). Business speaks with one voice. However, they never say what the business community (the term job creators is bullshit, too) will sacrifice. I wish someone in the media would ask business if they are willing to do their part to balance the budget and reduce the national debt (after all the SCOTUS and Mitt called corporations people)?

    Here are suggestions (the annual deficit is approximately $1.5 Trillion and debt is $16 Trillion:

    1. All government contracts performed by business will be done at cost. Period. Sure, shareholders will take a hit in their dividend checks each quarter but families on food stamps and welfare, and in lower paying jobs are being asked to take a hit in theirs, too, and they can least afford it.

    2. DO NOT RAISE INCOME TAX RATES. Instead, suspend corporate tax rates until the national debt has come down to 20% of GDP (it sounds official and ominous but it’s a bullshit matrix. I can name 20 of them to argue both sides of the question) and impose a 7% gross revenue tax on all businesses on sales to their end users.

    3. Repatriate the $2 Trillion dollars that’s offshore avoiding taxation with the following understanding; these dollars will go into special government bonds for five years. These bonds will fund the building of a smart electrical grid, a new national broadband system, and a national natural gas distribution system. After five years businesses will no longer owe taxes on that capital.

    4. To provide business with some relief, for a one time $1,000 transfer fee, business may elect to enroll any and all of their employees into Medicare until debt has fallen to 20% of GDP. Then, the responsibility for paying for healthcare will fall to the individual.

    5. Tariffs will be place on the wage differential only of imported goods and services, for a like amount, to make American workers and their labor more competitive in the global marketplace. This will also reduce the incentive for businesses to move American jobs overseas.

    What do you say big business? The White House? Big labor? The American people? What say you?

    • Joyce Arnold November 14, 2012 at 8:21 am #

      “This is not a prediction it is past performance for the POTUS.” TPAZ

      Absolutely.

    • Cujo359 November 14, 2012 at 4:47 pm #

      “This is not a prediction it is past performance for the POTUS.”

      Yep. If past is prologue, this is the prologue of another disaster movie.

  5. Jane Austen November 14, 2012 at 6:32 am #

    Repeat “social security didn’t add to the deficit.” And Ronald Reagan said the same thing – social security is not part of the deficit. It is a separate fund.

  6. james richardson November 14, 2012 at 2:39 pm #

    Yeah… campaign isn’t over has different meanings depending on what exactly we’re campaigning for. And “seems to agree” on SS and deficit is a little worrisome. This is not a revelation that the President should be coming to just now. If he didn’t know, that’s worrisome but tolerable. Either way, he knows now. It has been stated categorically. If he throws it on the table anyway then it is not for lack of knowledge but a deliberate act. And God help me if his Obamabots cheer him on for doing it.

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