Notes on a Theory…

Thoughts on politics, law, & social science

Chained CPI, Social Insurance and Two Kinds of Politics

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Social Security was enacted in response to mass mobilization. It can only be saved through mass mobilization.

The president’s new budget proposal includes both Chained CPI, a cut in Social Security benefits, and cuts in Medicare benefits.  As Shawn Fremstad  notes, the White House’s assurances that the ‘most vulnerable’ will be protected are not to be taken seriously.

It’s troubling for any number of reasons, including that the defenses offered are nonsense.  Chained CPI is arguably a more accurate measure for working people, but the existing measure clearly underestimates inflation for seniors, who spend far more of their income on health care, where costs are rising faster. Social Security doesn’t contribute to the deficit, which doesn’t matter (at least at the moment), and no one actually cares about it, and Medicare costs could be dealt with through costs controls rather than benefit cuts.

These programs are so wildly popular across all age groups and political affiliations that seeking to cut them is electoral suicide–or rather it would be if one party were willing to call it what it is.  Democrats had their chance to do that, when Paul Ryan’s budget proposed privatizing Medicare.  They briefly used this to stir up their base (mostly for donations, it would appear) and then Republicans insisted it was no fair to use their proposals against them. Many Democrats, including Bill Clinton, agreed, and pretty soon the phrase “Ending Medicare” was modified with the nonsense qualifier “as we know it” as if turning a social insurance programs into a voucher program and calling it the same thing made it so.  This wasn’t just politicians, but the media and the online chattering class too.  Republicans are movable, but Democrats have shown they prefer not to move them.  The exact reasons why are unimportant, but none of them are acceptable.

For some time, the possibility of cuts to either Social Security or Medicare have been periodically floated, in stories citing anonymous sources close to the White House. This is how politics works in DC–anonymously float proposals to see how people react without having to take a stand on them, to see what the reaction is to gauge the existence and strength of support or opposition.  Sometimes it was White House allies, or members of Congress, or staffers themselves, on the record, suggestion that these things might be necessary, or should be considered, or what have you.  Some used this opportunity to try to demonstrate opposition.

The process seemed to work like this: first Social Security cuts were floated, these were attacked, and then they were “taken off the table,” which only means some staffer said those words to reporters.  There was much rejoicing, and little follow-up, and soon Medicare cuts were floated .These too were attacked, taken off the table, at which point the Social Security cuts returned–a shell game.

But there were plenty of people there to tell us we weren’t serious.  These things would never happen. Obama himself hadn’t said it, or if he did, he didn’t mean it. The Republicans were forcing him to say it, somehow. Even now, we hear that it’s all a ruse to–when the Republicans (inevitably) reject the proposal, it will (finally) demonstrate to everyone that Obama is reasonable and the Republicans are not. Obviously, lacking any evidence for that proposition before, and because people care more about this then whether their grandparents slip into poverty and whether they themselves will have retirement security, they will flock to the president’s side.  That’s right, the White House is proposing a cut that harms current and future retirees.  At least the Republicans had the good, if evil, political sense to only harm one of those groups at a time.

Since the opposition appeared small, divided and weak, the White House has placed both cuts into the budget. And the GOP, all of whom have been screaming about “entitlements” and demanding cuts and some of whom have been calling for Chained CPI are now attacking the Democrats (all of them, regardless of their position on this issue) for attacking seniors from the left, which while cynical is entirely true.

This is obviously bad politics, if by politics you mean democratic politics.  But sadly, that’s not the only meaning, nor even the dominant one, in our discourse. When you hear Jonathan Alter or Chris Matthews talk about what’s politically possible, they aren’t talking about public opinion or votes. That’s why they can insist that raising the cap on for collecting payroll taxes for Social Security so that it is less regressive is considered impossible but the massively unpopular policy of cutting benefits for current and future retirees is seen as reasonable. They are talking about elite politics, the elites who, most of the time, hold all the power in our system.  Saying that outright is inconsistent with what we tell ourselves about our system of government–that it is democratic, that the people have all the power, that public opinion in reflected automatically in policy.

It’s also inconsistent with the dominant critique of that view among Democrats, which is that the only thing that stands in the way of this is Republican intransigence and the filibuster (never mind that Democrats in the Senate refused to take this abused tool away from the Republicans in a deal that would supposedly stop them from abusing it. This deal fell apart within seconds, and Harry Reid and Dick Durbin sheepishly shrugged their shoulders and scolded Republicans for doing what they were obviously going to do. For what it’s worth, they weren’t the suckers. Anyone who believed them was a sucker.) Besides, here we are with Democrats proposing to cut Social Security and Medicare, and pretending its a good thing. It takes some serious delusion to convince yourself that the filibuster made them do that.

People keep asking the question: why is Obama doing this? Usually, the question is phrased this way, directed toward the president himself, as if these policies don’t enjoy widespread support among party elites, as if the last Democratic president doesn’t support them (see above) and try to do it himself (thank you Lewinsky scandal).  Still, Obama has been talking about this for a very long time.  Regardless, I think the reason for this confusion is twofold. First, there is the idea that a politician’s personal views dictate the positions they take, and that these views spring immaculate from their soul uninfluenced by the system in which they operate and rose.  I find that odd, even more odd to describe what an institution does. The presidency is an institution, much larger than one person.  And second is the idea that the public typically gets what it wants, and that anyone who fails to deliver that will necessarily be punished.

The latter is not true. The evidence for it is clear and convincing, and has been for a long time.   Who supports cutting Social Security? It’s pretty simple, as this chart from Demos shows, based on research by Page, Bartels, and Seawright.

The donor class versus the people.

That’s right. That’s what our ‘democracy’ looks like.

In fact, this instance may be particularly egregious, but it is in no way usual. The concerns of the donor class, generally speaking, determine the boundaries of what is politically possible. (Lawrence Lessig lays out the case in his wonderful, infuriating book, Republic, Lost.  Thomas Ferguson’s Golden Rule is also essential reading here.) In policy area after policy area, policy and the agenda are a reflection of elite concerns not the population.  If you can’t get funding to challenge a candidate for opposing the public, and you can’t find a way to run that doesn’t rely on big money, then no one will face the music. And aside from that, the reason the concerns of regular Americans are largely ignored is because the concerns of elites, and protecting the profits of large corporations (not to mention raising money from them) take up so much of their time.

The reality is that our donor class, and the media and political elites that operate on their behalf (whether they do so because they believe it or not is irrelevant) has it exactly backwards.  The basic system of retirement security in the US had three parts–pensions, personal savings (mostly the value of a home) and Social Security. But pensions have been largely replaced with 401Ks, which even at their best provide less for most retirees than pensions do also have the problem of relying on the stock market, so they are not secure.  Remember the tech bubble crash and then the financial crisis?  And speaking of the financial crisis, that was ultimately caused by the popping of the housing bubble.

For most Americans, Social Security is all that’s left, not because they are lazy or unwilling to do what they were told to do but because what they were told to do was inadequate and insecure. (But on the bright side, the rich got much richer). Only one leg of the retirement security school is left standing, and the elites have decided even that small level of security is too little desperation.  Instead, we should be expanding it–I’d fund it with a financial transactions tax. I’d also suggest expanding Medicare–for example, temporarily lowering the retirement age to 55 until we get back to a reasonable level of employment, and covering chronic, costly illnesses that are made worse by lack of primary care. (In fact, it wold be better to expand it to everyone–but we’ll leave that for another time).

There was a time when Social Security was considered the “third rail of American politics.”  That time has passed. Sure, people still say it, but it’s not longer true.  What that meant was that no one in politics was willing to even suggest touching it.  The only legitimate options were expanding it or standing pat. To suggest cutting it in any way would bring about massive push back. No one wanted to be the lonely soul to step out of that consensus. At one time, the AARP would at such a suggestion mobilize its massive constituency.  Now it demands straight talk.

While we receive endless emails to sign a petition to let the Democrats know we don’t want them to cut Social Security and Medicare (something they most certainly already know), after these same groups spent months announcing their opposition to such cuts, it’s not clear that any of them have the capacity or the inclination to do anything about it. This has been a long time coming, yet full-scale mobilization never occurred. Only 31 Democrats in the House to date have opposed these cuts. (Check out the link–calls do matter.  Here’s information on Democrats in the Senate.) The White House has chosen not to listen. Why would they care how many people signed a petition?

And once the precedent is set, cuts will be used to justify more cuts.  The donor class is overwhelmingly hostile to these programs, in part because they are licking their chops thinking about all the money they can make when it is redirected into non-public hands.

But that doesn’t mean it can’t be saved, and it doesn’t mean we can’t recapture that consensus.

Social Security was enacted in response to mass mobilization. It can only be saved through mass mobilization. Let’s take the third rail metaphor seriously.  Touching the third rail on train tracks means you get shocked. That’s what we need. Something shocking.  Something isn’t standard. Something that challenges the donors–the funders, and the politicians they fund.  They have made it clear they aren’t listening. But they would if they feared us.

Ernesto Cortes, Jr., organizer of the Industrial Areas Foundation network in Texas and the San Antonio-based Communities Organized for Public Service (COPS), has plainly described activists’ necessary relationship to public officials. “It’s unfortunate that fear is the only way to get some politicians to respect your power. They refuse to give you respect. They don’t recognize your dignity. So we have to act in ways to get their attention. In some areas, what we have going is the amount of fear we can generate. We got where we are because people fear and loathe us.”

So, how we can we make them–Republicans and Democrats, office holders and funders– fear and loathe us?

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9 Responses

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  1. I think you and others are causing me to come around on the importance of not using the chained CPI. But I have to say, the Obama administration appears to be between a rock and a hard place politically. They just can’t win.

    In any case, I don’t think the chained CPI will be used. Now the GOP seems to be balking at it, as if they weren’t the ones to suggest it in the first place.

    • Thanks Susan. Not just balking, but attacking the Dems for it. That may help stop it, but it means that they can tag the Dems as the party of cutting Social Security, and themselves as its defenders. Very perverse.

      David Kaib

      April 11, 2013 at 4:06 pm

  2. This is outstanding! This should be in The Guardian.

    As for loathing, I’d say they already loathe us sufficiently, so we can scratch that one off. As for fear, I’m not sure. I don’t have any faith in electoral strategies, because of the overwhelming power of the Donor Class, as you point out so well. They’re pushing this now because in a year, they’ll be gearing up for the Most Important Election Evah® and they’ll want all this off their plates. This has to stick to their plates like day old BBQ sauce. The sticky kind with lots of molasses.

    I like your idea of disrupting fundraisers from the other day. It would certainly be a great start: “You want our money? Fine, we’ll make your wallet thinner too!” It could focus a few minds.

    Perhaps a call for progressives in office to bolt the Party en masse might shake a couple people up–if the entire CPC bolted, they’d have just as much power as they do now (which is none), without the embarrassment of kowtowing to crooks. But whatever it is, the entire Party apparat should be delegitimized. I don’t know how else to drive a wedge between those who give a shit and those who don’t. I watched the first few minutes of a clip from Maddow’s show last night, in which The Axe displayed some brazen DoubleThink. Yes kids, cutting SS and Medicare is “progressive,” because…. Republicans! So I turned that off after three minutes or so. Revolting.

    So getting people to turn off MSNBC might be a good idea too. Perhaps we need our own BDS movement.

    Ford Prefect

    April 11, 2013 at 6:38 pm

    • THanks so much. You are anticipating where I am going next with the fundraiser idea.

      Am I following you on Twitter? Because if I’m not it’s an oversight.

      David Kaib

      April 12, 2013 at 12:13 am

      • I’m not on twitter. I read your feed, but until I get better at one-liners (in progress, I think)…. I used to be emocrat at OL and ML. Now I’m Ford Prefect, as it better reflects my temperament and doesn’t contain a vague reference to the Party I used to belong to. I’m Rick E on Le Facebook. At some point, I’ll give up the pseudonym altogether. Sorry if I confused you.

        Ya know, you are very good at making the larger context accessible, especially the institutional aspect, which doesn’t receive nearly enough attention in the larger discourse. So I wasn’t joking when I suggested the Guardian. In a just world, your byline would be next to people like Stiglitz, Greenwald et al, on occasion. I’m not saying that to be kind. Pieces like this one speak on that level. I won’t make a point of pushing that idea, but it had to be said once. (I could be wrong, of course, so your mileage may vary. But since Rosenberg has done well on AJE, the thought did occur to me.)

        Ford Prefect

        April 12, 2013 at 1:25 pm

  3. Heretical Question for All Democratic parties: On FDR Social
    Security (SS) and LBJ Medicare and SS Medicaid – Are y’all
    BiPetersonSheep or DEM? : http://www.youtube.com/watch?v=n3O_ZoCyCbQ – NOT!

    Bruce

    April 12, 2013 at 10:10 pm

  4. […] Constitution” which opens with the above quote. It makes a good follow up to my last post on the role of money in putting deeply unpopular Social Security cuts on the agenda, or more simply, the power of the […]

  5. […] to cut Social Security and Medicare is that this position is deeply unpopular with everyone but the donor class. Whether people use this language because they are intent on attacking these programs or because […]

  6. […] squealed that this was unfair and soon Democrats shifted to the weak phrasing “ending Medicare as we know it,” which makes as much sense as saying replacing the U.S. Army with a voucher system for national […]


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