As we predicted here a few weeks ago, President Obama and the congress are moving forward with their intentions to alter how the government measures inflation as a way to save around $300 billion over 10 years.
The government is required by the Social Security Act to match inflation when it pays out benefits to seniors and other beneficiaries of Social Security. By manipulating the way the government measures inflation, it can pay out less and less to seniors, the disabled and survivors of deceased workers. They’ll still be receiving the same check, but it will continue to be worth less as real inflation increases.
This essentially amounts to theft from the weakest and poorest elements of our society, many of whom rely on a fixed income. We pay into the program all our lives through our payroll taxes and are entitled to receive a certain benefit from it. What President Obama and the Republicans in congress have agreed to is a small, but ever increasing tax on all Americans who use Social Security. In addition, you’d have to be an idiot to actually believe government statistics these days, but this obvious manipulation will only further serve to further enrage detractors who’ve been complaining about inflation for months now.
What’s worse is that the projected $300 billion in savings won’t even go toward stabilizing Social Security for future generations, but instead will go to paying down the existing national debt. So Republicans say “tax increases are off the table,” but taxing the elderly and the disabled is acceptable?
From today’s Wall Street Journal:
The idea of using this different measure of inflation, known as a “chained” consumer price index, has won support from numerous deficit-reduction commissions as well as many liberal and conservative economists… [I]t’s seen as a central way of reducing the deficit because it simultaneously cuts spending growth and increases tax revenues. And many also like it because much of its impact doesn’t come from “cuts” in spending. Rather, it would reduce the “growth” of spending pegged to inflation. And it would affect the way tax brackets and deductions adjust for inflation, so it could appear less like a tax increase than simply raising tax rates.
Some liberal groups and top lawmakers believe that it’s the same thing as slashing benefits and have been holding press conferences pre-emptively blasting the idea to try and keep it out of any deal. And some influential conservative groups believe the impact on taxes is tantamount to a tax increase and are likely to fight it.
Perhaps with enemies on both sides the idea just might have a chance.
Good Lord. Regardless of your ideological preferences, the idea of taxing the poor to support the corporatocracy in Washington has no economic benefit WHAT-SO-EVER. We hear from Republicans that taxes hurt growth. We hear from Democrats that a strong working class is important for a healthy economy. Now we have a plan that simultaneously violates both principals and both parties are on board. What a surprise.
That’s not all. The President has also called for the Payroll Tax cut (put in place this year with the intention of stimulating hiring) to be extended into 2012 to help his reelection chances. Never mind that this only further weakens the already crippled Social Security system.
Update: The AARP has issued a statement condemning the plan and already Democratic House Minority Leader Nancy Pelosi has come out saying that cuts to SS are unacceptable. The more attention this gets, the less likely it is to be enacted.