Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
20 December 12
hy 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 to 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.
Robert B. Reich, Chancellor's Professor of Public
Policy at the University of California at Berkeley, was Secretary of
Labor in the Clinton administration. Time Magazine named him one of the
ten most effective cabinet secretaries of the last century. He has
written thirteen books, including the best sellers "Aftershock" and "The
Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
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