Despite its severity, reports tell us that the chained CPI isn't this budget's only harsh austerity measure. The president will also propose increasing Medicare premiums for higher earners. The figure that's been reported is $47,000 per year. That targets comfortable seniors, not just the wealthy.
In less than 25 years, that more than one retired person in four would be paying an increased Medicare premium. (See the Kaiser Family Foundation's analysis for more.) This cost hike wouldn't do anything to reduce runaway health care costs. It's just cost-shifting.
The president's budget also includes some plain, old-fashioned austerity. According to reports, the new Obama budget calls for $400 billion in cuts to health programs, along with cuts to federal employees' retirement programs, the Post Office, and farm programs.
That follows the European model of cutting budgets during a Long Depression. Hey, what could go wrong?
Off-Balance
The White House is defending these cuts by saying they're only acceptable as part of a "balanced package."
But their current budget is already unbalanced. Dean Baker's calculations show that the president's asking the typical financially-strapped senior to sacrifice more than three times as great a share off income as the average wealthy American. Disabled veterans could be hit even harder, since they tend to spend more years collecting the benefit.
What's more, Social Security shouldn't be included in deficit discussions at all. It doesn't contribute to the deficit. Suggesting that they be part of these negotiations is reinforcing a false sense of "balance."
The president's budget is also out of balance because it includes much more in cuts than it does in revenue hikes, and the increases being proposed -- "closing loopholes" -- skirts around this country's real tax inequity. While it's important to close loopholes, their preferred approach also has the potential for being directed against the middle class as well as the wealthy.
Austerity, Democratic-Style
No matter what the spin doctors say, the President isn't "negotiating." Negotiation is a process in which one party proposes X and the other counters with less than X. But the chained CPI isn't in the Republican budget. It is only in the president's.
And remember: The president's budget is just the starting point for negotiations.
Sure, the Republicans like this cut too, and they've raised it on other occasions. But it's in Obama's budget, not theirs. Their fingerprints aren't on it. Obama owns this.
That means his party owns it -- unless other Democrats oppose it, fiercely and publicly.
The Defense Should Rest
Some of the president's supporters are still pretending the chained CPI is a "compromise." They should stop. He's spoken in favor of it a number of times. It's his preferred policy.
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