Wednesday, December 19, 2012

President Obama on the Republican's stubborn refusal to compromise on fiscal cliff negotiations, "After this week we should have perspective."

Visit for breaking news, world news, and news about the economy
Now the President has REALLY gone out of his way to negotiate in good faith with the Republicans, and is already getting blowback from his Democratic base over his decision to offer cuts to Social Security. However it is important to note that the changes to Social Security are far less dire than many have been implying:

The White House proposal would raise $1.2 trillion in new revenue, in part by changing the treatment of itemized deductions, which will hit the rich hardest. It would extend unemployment benefits and boost infrastructure spending—both key pieces of economic stimulus. And it would prevent Republicans from holding the economy hostage over the debt ceiling for two years. But it would end the Bush tax cuts only for those making $400,000 or more—a climb-down from the $250,000 mark Obama had previously insisted on—while failing to extend the payroll tax cut, meaning middle-class taxes will rise. It would cut $1.22 trillion in spending. And, perhaps most controversially, it would cut Social Security by changing the way inflation is calculated, meaning payments grow more slowly, by about 0.3% each year.

So there are NO actual cuts to Social Security, however the growth of payments to match inflation is now reduced. Clearly not optimal but hardly catastrophic.

Compare that with the dangers of actual going over the fiscal cliff, or curve if you prefer, and you may have some idea as to why the President is working so hard to reach a deal:

If the current laws slated for 2013 go into effect, the impact on the economy would be dramatic. While the combination of higher taxes and spending cuts would reduce the deficit by an estimated $560 billion, the CBO estimates that the policies set to go into effect would cut gross domestic product (GDP) by four percentage points in 2013, sending the economy into a recession (i.e., negative growth). At the same time, it predicts unemployment would rise by almost a full percentage point, with a loss of about two million jobs. A Wall St. Journal article from May 16, 2012 estimates the following impact in dollar terms: “In all, according to an analysis by J.P. Morgan economist Michael Feroli, $280 billion would be pulled out of the economy by the sunsetting of the Bush tax cuts; $125 billion from the expiration of the Obama payroll-tax holiday; $40 billion from the expiration of emergency unemployment benefits; and $98 billion from Budget Control Act spending cuts. In all, the tax increases and spending cuts make up about 3.5% of GDP, with the Bush tax cuts making up about half of that, according to the J.P. Morgan report.” Amid an already-fragile recovery and elevated unemployment, the economy is not in a position to avoid this type of shock.

So although the President just won reelection, and is currently enjoying the highest poll numbers since he killed Osama Bin Laden, the fact remains that he realizes it is HIS job to protect the American people from a possible recession and dramatic job loss.

I don't think it makes a difference to the President WHO gets blamed, his job  is to make sure it never happens. You see unlike a certain party of douchebags I could name, Obama does not play politics with the lives of the American people.

And how did this party of douchebags respond to these remarks by the President? Much like you would imagine: 

Boehner, R-Ohio, responded to Obama with a defiant tone. In an appearance before reporters that lasted under a minute, Boehner called on Obama to offer a deficit-cutting plan balanced between spending cuts and tax increases and predicted that the House would pass his backup plan. 

"Then the president will have a decision to make," Boehner said. "He can call on the Senate Democrats to pass that bill or he can be responsible for the largest tax increase in American history."

Essentially Boehner said "Fuck it, let it burn!"

I think the next time I see one of those Teabagger assholes holding an "America First" sign I am going to punch him right in the face.


  1. Anonymous1:11 PM

    Cuts to Social Security do not appear catastrophic however it is a slippery slope. Once you start "touching" social security, like pensions, we will turn around and it will be gone.

    No democrat should ever touch Social Security the repugs will run against them as the party who cut social security, a real popular election message for all.

    Most child molesters usually start by fondling children. It gradually progresses to rape.

    Obama is fondling social security now. If we don't stop him........

  2. The chained CPI is a bad deal for recipients and, from all the reports I've read, will result in cuts to benefits which would disproportionately affect elderly women who rely more on RSDI than men do. E
    The chained CPI assumes that people adjust their spending based on inflation. But elderly people spend more of their income on health care which rises much faster than the general rate of inflation and it's not like they have a choice. I would rather see them raise the cap on income subject to payroll taxes from $110,000 to $250,000.

    1. Eliminate the cap. Then let's run the numbers and see the impact.

      It's supposed to be a social safety net, but the high end of the income range gets an unnecessary pass on all of their "excess income". Call me a fucking socialist, a commie, or even a librul. I don't give a shit. I'm for the people who need it most, and won't lose a minute of sleep on what some of my peers might say or think, if we're helping out those who have to live on fixed incomes maintain a little bit of dignity in their retirement or disability.

    2. I agree with both Nancy and BoneyBooBoo about the SS cap. Eliminate it, but allow a MAXIMUM of what can be drawn from SS by the wealthy (I can already hear them squealing like pigs).

      BTW, Gryphen, NO SS COLA (2010 and 2011), a remedial 3.2% SS COLA (2012) and a 1.7% SS COLA (2013) is quite a bit different from the proposed 0.3% proposed in this "chained CPI".

      It seems to be a low-value poker chip for everyone but we seniors, whom it'll hurt, and the neocons, who seemingly MUST WIN or they start sucking their thumbs and having tantrums unless they can make someone else miserable.

    3. Anita Winecooler8:05 PM

      I was trying to explain this to a few relatives of mine on SS, they're really upset over this deal. One gets approx 1200 a month, pays rent, car insurance, etc. and is in a medigap program that costs 380 a month. This year's increase of 1.7 percent sounds like a lot to other people, but inflation and the economic conditions really hit them harder than others.

      There should be a cap for wealthy people on Social Security, and that's what I think President Obama is holding that card close to his chest.
      I think POTUS is looking at the bigger picture and still has the upper hand in negotiations.
      If we do go over the financial ant-hill, Boehner's Screwed. If we don't go over the financial ant-hill, Boehner's screwed.

    4. The chained CPI assumes that you eat beans instead of steak during times of inflation, things like that, so adjusts the COLA to reflect that you are now eating beans so not spending as much. One problem with that is that many Social Security recipients are ALREADY eating beans, haven't seen a steak in ages. The impact on income accumulates over time too. Your base income is smaller when the next COLA is calculated. When that happens over and over, you lose ground.

      The COLA equation was already changed for Social Security recipients. Now cost of living calculations for SS do not include food or heat. It used to include those things. I think that was the doing of Newt and his Contract On America. Seems to me food is relevant. Also heat. Older people do actually eat. They don't necessarily buy new cars, which I think ARE included in the current COLA formula. COLAs have already been reduced as a result.

      I've unfortunately had to be on disability for 20+ years. I have seen a regular decline in my buying power over that time. I am thankful I have that income but it has been shrinking for a long time now. Combine that with the fact that average wages have risen significantly during that same time, I have been steadily dropping down the income ladder. New retirees have their benefit figured on much higher salaries than were the norm when I retired. When I first retired I got almost the highest benefit available. Now I am below the average and my medical costs are skyrocketing.

  3. The president has shown the spirit of cooperation and compromise. Inarguably. Unmistakably.

    The Speaker has displayed intransigence. Endlessly.

    I love chess.

  4. Sharon2:21 PM

    How do this fucktards sleep...kiss their children? How in the hell do they take our money for a job so horribly done. It is beyond my feeble brain to understand how they look in the mirror and tell themselves they are Americans. Traitors one and all, the bullshit I hear heralding LBJ super powers over getting deals done with a GOP congress is so absurd.
    LBJ had moderate sane GOP, LBJ did not have the teabagger know nothings, LBJ wasn't black, and LBJ gave us the Vietnam war. Boehner will go down in history as the worst leader, just as Bush is the worst pres, as is Rice the worst SOS, and Cheney as the worst VP. We expect this intelligent, thoughtful, dedicated man to compromise with narrow minded bullies that could care less about the majority of americans. It is not possible to do anything but hate the entire party, they are the worst disease of this nation.

  5. lostinmn2:40 PM

    It's NOT a freaking tax increase. When are we going to admit all he's doing is taking us back to what tax rates were before Bush cut taxes - temporarily - to encourage small business to invest in jobs. Instead they pocketed the savings and said "screw you America. I got mine and you can't force me to use it to help Americans"
    That's all this is, a return to where we were.
    Do we get all up in arms when our favorite store has a sale and then returns prices to what they were before the sale? Hell no - we suck it up and either buy at regular price or wait for another sale.

  6. Anonymous2:45 PM

    Be careful who you punch...those TeaBaggers are armed.
    As far as SS, I think he knows Boehner will never take this deal, will lets all taxes go up, and then Obama is in the driver's seat, as the GOP will rightly be blamed for not being able to make ONE sane compromise offer in 5 years. Not one. They repeat the same hyperbole and lies, over and over again, and like Cantor's plan, there is nothing there. No plan, no ideas, just blaming the Dems. Kind of like SArah, only she m akes more money to spew her lies. Disgusting, the lot of them.

  7. Anonymous2:51 PM

    No, Gryphen. Do it Palin-style - punch him in the neck. Lord, I strongly dislike that woman!

  8. Gryphen: "I think the next time I see one of those Teabagger assholes holding an "America First" sign I am going to punch him right in the face."

    BBB: Not if I happen to see that same dirt-bagger first, because I know you won't punch an idiot that just got his ass kicked by the guy who got there first.

    I'm just about tired of all the RW politicos that are afraid to tell the baggers in their district "NO!" and just do the right thing. I'm not going to take the time to list all of these cowards in the Louie Gohmert/Steve King goat-fuckin' mentality crowd of yahoos, but we know who they are and they ain't worth a bucket of doo doo.

    So I say, "Fuck those ignorant bastards in the Tea Party. They're useless (in my humble opinion)".

  9. Anonymous3:05 PM

    These clowns give themselves generous raises every year, with no voting about it. Why aren't their wages frozen, until they actually do some WORK? All they have done this year is talk about rape and abortion, granted these are vitally important, but more people are affected by social security changes than this. Now they are swiftboating Chuck Hagel. It never stops, they must think people do not know what is going on, they act like kids.

  10. Anonymous3:10 PM

    Sorry, G, but although I love the president, I am not a supporter of the deal he's offered. Social Security has no place in the deficit discussion. It is not a part of the deficit at all. Even Reagan admitted this. I think Obama has gotten rattled by the massacre and his attention has turned towards ways to prevent future massacres. I'm afraid he's lost some of the resolve he initially showed in the negotiations.

    It's up to progressive to let their representatives know that we won't stand for any cuts to Social Security or Medicare. And taxes should rise for those making $250,000 and over. The whole election was over this, and the Democrats won. Biden and many of our representatives told us specifically that they would defend Social Security and Medicare. They can't go back on their words now.

    You better believe that the Republicans are licking their chops right now, seeing a huge opportunity to get more of what they want - protection for the very richest and a dismantling of the public programs the majority of us depend on. I understand why the president is heartbroken right now. Can't imagine what it was like to have to meet with the families. But his supporters need to remind him, and all the other Democrats, of the principles we stand for, and demand that they fulfill the promises they were making such a short time ago.

  11. dorkenergy3:18 PM


    There is no fiscal cliff; there is no slope.

    The fiscal cliff carousel is a lie. The deficit is not the enemy -- not now; not in the long-term. It is simply misunderstood.

    No need to cut spending OR raise taxes to fix something that doesn't need to be fixed.*

    It's balancing the economy, not the deficit, stupid!

    Increase spending AND (as appropriate) cut taxes in down times to ensure FULL employment.

    See, e.g., re modern monetary theory, sovereign currency, full employment, platinum coin seignorage, Nixon Shock (no more gold-backing of currency). Other good sources: Warren Mosler, The 7 Deadly Innocent Frauds of Economic Policy [Kindle Edition] at; Mosler and Stephanie Kelton, Modern Money & Public Purpose 2: Governments Are Not Households at

    *Spending and taxation can and should be adjusted to rectify power imbalances or other aggravating causes of social and environmental welfare.

  12. dorkenergy3:56 PM

    It takes some time to get your head around -- we have been so indoctrinated with the Austrian farce.

    But once you get past the first step, outlined above, you can appreciate that money is a societal construct that can be issued in infinite supply subject only to actual inflation (not fear of inflation).

    The lies have been propagated in all the standard economic texts. Economics doesn't even rate as a science. It's another myth machine -- that benefits, most of all, selfish rich such as the Kochs and their libertarian and otherwise society-pathic Norquist-type acolytes who want to drown government in a bathtub (except for the MIC-funding part).

    But wait, it's worse -- Larry Summers, Tim Geithner, our leader who they serve, and most democrats have been fooled. Completely.

    Given that most progressives (including even Paul Krugman) have also been fooled -- because old school economics was we (including you and me) were ever taught -- that's not surprising.

    So far, it has to be taught one-person-at-a-time. We need to help change that.

  13. dorkenergy11:19 AM

    A timely piece today to emphasize and urge you to join the saners in this needed re-framing:

    William Black (at UMKC with Kelton and Mosler) has a piece re Obama's mis-understanding at the hands of "Treasury Secretary Geithner and William Daley, Obama's chief of staff (Wall Street's leading representative within the administration and, like Geithner, a strong opponent of stimulus and a strong proponent of austerity)".

    For background on how this has caught on -- though with only partial and inadequate understanding in the blogosphere -- see this piece by Letsgetitdone (at dailykos) aka Joe Firestone (at "Origin and Early History of Platinum Coin Seigniorage In the Blogosphere" at


Don't feed the trolls!
It just goes directly to their thighs.