President Obama’s Plan to Cut Social Security Benefits

By Pam Martens: April 8, 2013

President Obama is expected to release his budget proposal this week and, as confirmed by his administration over the weekend, he is planning to cut Social Security benefits for seniors, veterans and people with disabilities by indexing payments to chained CPI.

Damon Silvers, Director of Policy for the AFL-CIO, sent an angry email alert to members over the weekend, saying the action was “unprecedented for a Democratic president” and that chained CPI is “a discredited way of calculating annual cost-of-living increases that does not keep up with actual costs, eating into benefits.” Damon said the president’s proposal would also “require middle-class seniors — people who make $47,000 a year and more — to pay higher Medicare premiums.” (Read the full statement from the AFL-CIO below.)

The sellout by the President, who was elected to save Social Security not gut it, was confirmed by administrative sources. Speaking on ABC’s “This Week with George Stephanopoulos” yesterday morning, Dan Pfeiffer, a senior advisor to the President, had this to say:

PFEIFFER: This president will — this — this chained CPI that’s being referred to here, is something the president will only accept on two conditions. It’s something Speaker Boehner and Senator McConnell asked for in the context of the original negotiations, and those two conditions are, one, it’s part of a balanced package that includes asking — closing tax loopholes to benefit the wealthiest, and, two, that it has protections for the most — for the most vulnerable, including the oldest seniors.

STEPHANOPOULOS: So there will be some carve outs there?

PFEIFFER: Absolutely. And look, this is compromise. And compromise means there are going to be some folks on both sides who are not happy.

Anticipating the proposal from Obama, Senator Bernie Sanders’ wrote as follows in an April 1, 2013 letter to the New York Times:

“Under this proposal, according to the Social Security Administration, 65-year-old retirees would lose more than $650 a year by their 75th birthday, and more than $1,000 a year would be cut from their benefits once they reach 85.

“The proposed change would also affect more than 3.2 million disabled veterans receiving disability compensation benefits from the Department of Veterans Affairs. Veterans who started receiving V.A. disability benefits at age 30 would have their benefits reduced by $1,425 a year at age 45, $2,341 at age 55 and $3,231 at age 65. Benefits for more than 350,000 surviving spouses and children would also be cut.”

There are dozens of writers in America who saw this coming and their work is bound together in Hopeless: Barack Obama and the Politics of Illusion, edited by Jeffrey St. Clair and Joshua Frank. (My article, Obama’s Money Cartel, is included in the anthology.)

In the book, in an article titled Occupy the System, St. Clair and Frank write:

“President Obama wasted little time bailing out the greed-infested financial sector. When he took office in 2009, Obama nominated Rubin-trained economist Timothy Geithner, former president of the Federal Reserve Bank of New York, to serve as Treasury Secretary. Geithner, if anything, is an insider among insiders and Wall Street’s main man in DC.

“It was certainly not the hope and change Obama supporters had voted for, especially in a time when the economy was suffering and jobs were scarce. Obama’s modest stimulus program did little to sustain job growth and was nowhere near the scale of the New Deal’s robust Works Progress Administration. In short, Obama has been an economic disaster for the majority of Americans, sans the Wall Street crowd that continues to profit and is protected under the guise of ‘too big to fail’…

“There’s a Wilsonian quality to Obama: trim, aloof, pedantic and shank-you-in-the-back dangerous. Obama has never wanted to be seen socializing with the poor or working class stiffs. He doesn’t even want them in his orbit, except as props behind his teleprompter…

“Making the connection between the continued economic disparities on Main Street and the policies that fuel this divide is paramount to bringing about real change.”

Only a few months into his second term, the President has installed a Citigroup executive who took $940,000 of bailout funds as a bonus as his Treasury Secretary (Jack Lew); and picked a corporate lawyer who worked for the too-big-to-fail banks as his Chair of the SEC (Mary Jo White). Should his base really be surprised by this sellout on Social Security.

Full Text of the email sent April 6, 2013 by Damon Silvers, Director of Policy, AFL-CIO:

From all reports I’ve seen, President Obama is going to propose a budget plan next week that is unprecedented for a Democratic president. It will propose a cut to Social Security benefits for seniors, veterans and people with disabilities.

It appears the proposed cut will take the form of “chained” CPI—a discredited way of calculating annual cost-of-living increases that does not keep up with actual costs, eating into benefits.

But there’s more. The president’s budget proposal also would require middle-class seniors—people who make $47,000 a year and more—to pay higher Medicare premiums.

These cuts are bad policy. And the only way we’re going to stop them is if President Obama and all members of Congress hear that we’re not going to tolerate them. Sign our petition to the president NOW.

It is unconscionable to ask seniors, people with disabilities and veterans who are barely making it to be squeezed even tighter at a time when corporations and the wealthiest 2% are not paying their fair share of taxes, despite soaring profits.

It’s bad policy to make cuts that will weaken our economic recovery.

And it’s wrong, at a time of record income inequality and stagnant wages, to make the gap even worse by undercutting the retirement security of working- and middle-class Americans.

The majority of Americans oppose cuts to our country’s most important family protection programs. It’s time to make some noise about it.

We need to invest in America’s working families, not pull the rug out from under them. That starts with repealing the sequester and making corporations and the richest 2% pay their fair share. And that should never, ever include cuts to benefits that millions of working families rely on.

Tell President Obama: No “chained” CPI and no cuts to Medicare, Medicaid or other cuts to Social Security benefits. Period.:

In Solidarity,

Damon Silvers
Director of Policy, AFL-CIO 

Bookmark the permalink.

Comments are closed.