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Four Myths About the "Deal" -- and Four Ways It Can Hurt You

By       Message Richard (RJ) Eskow     Permalink
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from the Huffington Post

 

Today we're watching the end of a brief manufactured crisis -- and the beginning of a long national nightmare. This deal's designed so that "centrist" (right-wing) Democrats and Republicans can finally implement the draconian measures they both want in an indirect way that gives them as little accountability as possible.

There's nothing to celebrate in this deal unless you're either an economic right-winger or very wealthy -- or both. Even the "defense cuts" some Democrats are touting could turn take the form of sharp reductions in veterans benefits or State Department diplomatic activities.

It's a plan they've tried to execute before. It creates a secret extra-democratic process designed to implement highly unpopular and harmful policies, which include "revenue increases" that could further decimate the middle class; pre-timed cost-cutting "triggers" that let politicians hide their role in the process; potentially slashing cuts to Social Security, Medicare, and Medicaid; and a refusal to address the depression-like economy that still binds million of Americans.

And all to protect the rich from additional taxes.

A Three-Stage Plan

The nation's austerity plan is to be rolled out in three stages. The first, which apparently has already been concluded, was to have economic conservatives in both parties agree that they will do nothing more to help the country's devastated economy. As the New York Times reported, "The nation's political leaders agreed on Sunday to spend and invest less money in the American economy, a step that economists said risks the reversal of a faltering recovery." That plan of inaction is an integral, if unspoken, part of this agreement, and it's likely to have as great an impact as their agreed-upon actions.

The second step will take place if and when this deal is passed, and will consist of nearly $1 trillion in mandatory cuts. We're told that half of the cuts will be from "defense spending," but that doesn't mean what you might think it means. As the Democratic Policy and Communications Center explains, "security spending includes defense, state and foreign operations, homeland security, and military construction/veterans affairs." In other words, these cuts could include layoffs for TSA workers, reduction in health care or other veteran spending. and shutdowns of US diplomatic missions around the world.

The other half of the cuts will come from a cap on non-security spending, and the specifics haven't been laid out their either. We're told that Social Security, Medicare, and Medicaid are "off the table" for this round of cuts -- but then comes Step Three.

In Step Three a Super Committee of six Democrats and six Republicans will be empowered with creating $1.5 trillion in additional cuts. Similar groups "bipartisan" groups of Republicans and conservative Democrats have been convened in the past. They've consistently come up with cuts that are widely opposed by most Americans (often including most Republicans), while refusing to raise taxes on the wealthy (widely supported by most Americans).

Four Myths

As might be expected, there's a lot of confusion around the deal -- in fact, it's designed to create confusion. Here are four myths that sprang up overnight:

Myth #1: It "preserves Social Security and Medicare."

False. It only defers the day of reckoning. Social Security and Medicare are exempted from the first and smaller round of cuts, but not from the larger $1.5 trillion in cuts that the unelected "Super Congress" must find.

The likeliest outcome? Unnecessary and drastic benefit cuts to Social Security that probably involve raising the retirement age even more than it's already scheduled to rise, the "chained-CPI" that artificially lowers cost-of-living standards to well below what seniors need for their expenses, and possibly a means-testing system that sounds reasonable but will quickly target middle-income Americans.

Myth #2: Military spending faces deeps cuts under this plan.

Even the eagle-eyed Ezra Klein falls for this myth when he writes that "a year ago, defense spending was supposed to be sacrosanct" but that "The Pentagon" will now be facing deep cuts.

Not necessarily.

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Richard (RJ) Eskow is a former executive with experience in health care, benefits, and risk management, finance, and information technology. Richard worked for AIG and other insurance, risk management, and financial organizations. He was also a (more...)
 

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