This page has been archived and commenting is disabled.

Obama - "I need a lever"

Bruce Krasting's picture




 

 

As a long time watcher of Social Security I was shocked (yes, shocked) at the recent Congressional Budget Office (CBO) report on America's largest entitlement program. CBO concluded that the long term outlook for SS deteriorated substantially over the last twelve month. (CBO link)

CBO revised its assumptions regarding mortality. This is a huge variables for SS. With people living longer, they will receive more checks; this eats into the solvency of SS over a long-term period.

CBO concluded that one option to 'balance' the solvency of SS required an "Immediately and Permanent" payroll tax increase of 3.4% (Wow!). A year earlier, CBO stated that a payroll tax increase of 1.9% was required to balance SS. The change in the tax increase required is 70% higher than that reported just a year ago!

SS's taxable payroll is equal to 36.3% of GDP. That comes to $5.8 Trillion for 2013. A 3.4% tax increase translates to approximately $200 Bn! A tax increase of this magnitude would absolutely sink the economy. There is no chance in hell that anything like that could (or should) happen. However, there are a variety of other alternatives to tweak SS that would not have the negative consequences of such a big tax increase.

 

Were it not for the fact that the country is managing its finances on a month to month basis, the rapidly growing problems at SS would be high on the list of problems that need attention. Clearly, the White House has read the CBO report. I wonder if the WH will use the rapidly deteriorating condition of SS as its "lever" in negotiating with Republicans over the budget and the debt limit.

Would Obama throw SS under the bus to achieve an extension of the debt limit and an end to the shutdown? Of course he would. Some things that might happen as part of a 'big deal' to buy a resolution of the immediate crisis(s):

I) Raise the cap on taxable earning- liberals love this.

II) Raise the retirement age - Obama has already pushed for this.

III) Means test SS retirement benefits - Republicans wanted this for Medicare.

IV) Change the COLA inflation adjustment. Liberals hate this, Republicans want it, Obama has pushed for it.

If all four of these steps were adopted, it would have Zero consequence to the economy for the next three years. Obama would love that outcome.

What's the most important thing for Obama? To end the debate over ACA. Would he trade ObamaCare for big changes to SS? In a New York minute.

 

As near as I can tell, there is currently no basis for a resolution to the budget impasse, and it looks like we are headed off the cliff on the debt limit. Something has to give. SS may be the lever that the Big O needs for a deal that saves his presidency. The Tea Party folks in the House will not vote for anything that allows ACA to continue, but there are a fair number of moderate Republicans who would trade SS for ACA. Nancy Pelosi (D-CA) would puke at this result, so would Harry Reid (D-NV. But if they apposed a deal, then they would be the ones responsible for a national default (Republicans would love this outcome).

Would Obama push his pals off a cliff to get a deal? The answer is that he has no other viable options.

 

request__pushing_off_cliff_by_awsomegaby-d2y8voy

 

Note:

The "Non Partisan" CBO did not have to make dramatic changes to its mortality assumptions in September of 2013. The 5/13 SS Report to Congress did not have changes in its mortality rates, but CBO did. Why? CBO knew that it was teeing up SS with its revisions. Was the timing of the revisions related to the then pending crisis over the budget and debt ceiling? Who really has levers in D.C.? Technocrats?

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 10/03/2013 - 13:01 | 4019033 SmittyinLA
SmittyinLA's picture

That's what makes Obama such a great tool, his willingness to lie to everybody's face and stab anybody in the back.  In CA his base is pushing looting CALPERS foreclosure assets to give to illegal alien SEIU workers FOR FREE. 

Thu, 10/03/2013 - 12:27 | 4018814 MrBoompi
MrBoompi's picture

Removing the salary cap altogether would take care of the problem and it might even allow an overall cut in the rate.  Do I give a shit if Jamie or Lloyd get taxed an extra 2% on their $15 million?

Thu, 10/03/2013 - 12:17 | 4018748 NoTTD
NoTTD's picture

I misread the headline as "Obama - 'I Need a Lover'".  I thought he was about to burst into song. 

Thu, 10/03/2013 - 10:44 | 4018279 New American Re...
New American Revolution's picture

Yes, in a NY second.

Thu, 10/03/2013 - 05:23 | 4017572 geewhiz
geewhiz's picture

O'bama can do nothing useful, he should play golf for 3 years then leave and spend time reminiscing that he was president, twice even. Then make way for another useless puppet clown to continue oversight of the decline.

Thu, 10/03/2013 - 01:57 | 4017463 BeetleBailey
BeetleBailey's picture

FUCK Obama and his band of free-be takin cunts.

Sometimes you gotta thin the fuckin herd, and it's getting to that time.

KEEP the gubbermint shut down. FUCK ObamaNoCare....

 

FUCK YOU WASHINGTON!

Thu, 10/03/2013 - 01:53 | 4017459 q99x2
q99x2's picture

Obama would sell himself for a bad deal.

Dude's lost his touch.

Thu, 10/03/2013 - 01:26 | 4017429 Fish Gone Bad
Fish Gone Bad's picture

The date of the next crisis is 11/13/13.  Personally I like the number 11/12/13 as it has a nice pattern.  On 11/13 the power grid is "tested" in a drill.  Anyone remember the last drill?  The Boston Marathon.  So everyone has about a month to go until the next "big day".

Fish Gone Bad

Thu, 10/03/2013 - 06:48 | 4017632 etresoi
etresoi's picture

The next scheduled "crisis" is a false flag op against Chicago in mid-October.  Your dates fit my info.  Get out the popcorn.

Thu, 10/03/2013 - 07:42 | 4017704 Greenie
Greenie's picture

Chicago Marathon Oct 13 coming up, its one of the "big 5" like Boston. There's no way to secure 26 miles in that jungle.

Thu, 10/03/2013 - 01:01 | 4017398 icanhasbailout
icanhasbailout's picture

Keeping Obamacare is not on the table as a possible outcome. Should the GOP cave on this, 2014 will be a revolutionary election year with incumbent losses hitting record numbers.

Thu, 10/03/2013 - 11:36 | 4018564 1000 splendid suns
1000 splendid suns's picture

This might be a realistic thought if there weren't electronic/rigged voting machines.

Wed, 10/02/2013 - 20:47 | 4016607 Trying to Understand
Trying to Understand's picture

At this point what difference would it make if bennie baby printed SS and SSD and Medicare/Medicaid totally solvent... I mean really, what difference would it make at this point of indebtedness???  We are just shy of 17B, with 211 in unfunded liabilities, granted not all of those "liabilities" are worth funding (obummercare comes to mind, as do fish, frogs and other off the wall projects...)  We owe more than we take in already I know, but at this point it is seriously doubtful we are going to stand good for it, we never have, so why should we even begin to think we will now? 

Wed, 10/02/2013 - 23:41 | 4017250 Escapeclaws
Escapeclaws's picture

I shudder in revulsion and turn away in horror at the idea that the FED would print money for such an unworthy cause as shoring up Social Security or enabling ordinary Americans to have guaranteed healthcare!

These are not too prone to fail banks, after all!

Suffering and hardship for the masses--it's what's fiscally responsible!

Thu, 10/03/2013 - 00:37 | 4017377 AGuy
AGuy's picture

Here what I think will happen:

1. Obama does not negotate. Period!

2. Obama go on the war with the GOP, when Oct 17 comes and he orders Furloughs of Air Traffic controllers to shutdown air traffic. Tells the Public that he tried everything in his power, but they need to cut SS and other entitlement payments. But the GOP won't allow him to send out the checks.

3. The Liberal Media goes Nuclear on the GOP.

4. With no options left the GOP caves in (as usual)

5. The Obamacare  disaster unfolds. But because of the Gov't Shutdown Obama use the crisis to regain the Super-Majority in the Senate and Congress.

6. Liberal Utopia is ushered in! Gun control, state controlled businesses, Price controls, all happen. We become the Venzuela of North America.

 

 

 

 

Thu, 10/03/2013 - 08:28 | 4017801 GeezerGeek
GeezerGeek's picture

Re #6: I urge all ZH readers in the US to begin stocking up on toilet paper now. 

I have to admit, though, that there is so much shit coming out of DC that there may not be enough TP in the world to handle the deluge.

Thu, 10/03/2013 - 01:34 | 4017437 Fish Gone Bad
Fish Gone Bad's picture

Interesting.

Try this on:  Anything that can be destroyed can be controlled.  The GOP is in the position of being a loser and the DEMs are in a position of being the big winners.  If the GOP crashes the government, then the DEMs lose as well.  LOSE/LOSE.  This in an interesting kind of way, puts the GOP onto a more level playing field.  The big strong president and the big strong Senate, beaten by a GOP freshman and the Tea Party.

This whole thing will get downright ugly in the end.

Thu, 10/03/2013 - 09:20 | 4017977 AGuy
AGuy's picture

" If the GOP crashes the government, then the DEMs lose as well. LOSE/LOSE. "

I am pretty confident that the GOP will cave in before it comes to that.

"The big strong president and the big strong Senate, beaten by a GOP freshman and the Tea Party."

Not really, The DNC has the upper hand and is using the GOP tactics against them. When this all plays out the majority of voters will blame the crisis on the GOP and vote them out of the office. The GOP is playing checkers in a chess game with the DNC. They stand to lose. The DNC doesn't really give two craps about the US, all they want it power and control (totaliarisim), which is exactly where the country is headed.

Wed, 10/02/2013 - 20:08 | 4016402 Intoxicologist
Intoxicologist's picture

Intoxicologist - "I need a liver"

Wed, 10/02/2013 - 20:13 | 4016434 akak
akak's picture

Selling out and pushing his pals over a cliff is just the blobbing-up of the inherent eternal nature of duplicitous US 'obama' leverism.

Wed, 10/02/2013 - 21:02 | 4016658 Intoxicologist
Intoxicologist's picture

Oh, I know.  Just too much dangdangedness the last couple of days - and I haven't even blobbed up ZH! 

The natural wildlife-ism resources department lost control of a "controlled burn" behind my land ,and I sat in my yard watching planes fly over dumping water on it as ashes fell on my head. My house and everything in it smells like a campfire.  I got closer to it, out of curiosity, but not that close since the authoratahhh had the roads blocked.  I was standing on the road, pants up, talking to a neighbor who is an avid photographer.  With all the planes flying around, he mentioned something interesting that had happened to him recently.

He was taking pictures of some eagles that are nesting nearby.  In flight, one was, and he snapped some photos.  He told me when he got home, he cropped one picture he particularly liked, zoomed in on it, and lo and be-hornswaggled-hold, there was a military drone flying behind the eagle.

You know you need a new liver when the National Symbol isn't even immune to Big Brother. 

Wed, 10/02/2013 - 19:16 | 4016144 butchtrucks
butchtrucks's picture

Good on the Tea Party Republicans for standing up against the communistical outrage that is Obamacare. They should not give ONE INCH in their refusal to pass a budget or raise the debt ceiling until this law is TOTALLY wiped off the statute books. If that means some pain for governement workers etc. then GOOD - they are nothing but leeches anyway. The important thing is to prevent deadbeats getting access to healthcare - that is a noble cause which it is worth fighting for every inch of the way.

But this is only a START. The Republicans need to ensure the defunding of ALL socialist programs that are bringing this once great country to it's knees including Medicare, VA, Medicaid and Social Security. These government-run programs are just pandering to people’s laziness and lack of personal responsibility and are totally un-American.

In this country good health is not a birth-right – it is a privelage – and a privilege that should only be available to those who are hardworking, wealthy, and smart enough to pay for their own insurance.

We should not try and emulate socialist hell-holes like Australia, Canada or Scandanavia where every dead-beat can access free public health systems regardless of whether they’ve saved up to pay for it or not.

The US got to be great through people standing on their own two feet and taking responsibility for their own health and well being. Not one dime of my taxes should go towards supporting socialized free health care for those too lazy, poor, old, or stupid to look after themselves.

Medicare in particular is the worst socialist program ever introduced in this country (by another socialist Dem President – Lyndon Johnson in 1965). It’s a single payer government run program funded from taxes paid by you and me – to support old sick people we don’t even know.

Back in the ’60s the GOP fought long and hard to prevent this communistic system becoming law. As Ronald Reagan said at the time the Dems were trying to force this thing through “If you and I don’t stop Medicare then one of these days we are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.”

George HW Bush Described Medicare in 1964 as “socialized medicine at its worst” and. Same with Barry Goldwater who said: “Having given our pensioners their medical care in kind, why not food baskets, why not public housing accommodations, why not vacation resorts, why not a ration of cigarettes for those who smoke and of beer for those who drink.”

Social Security is another Communist program that needs to be abolished right now. Did you know that the U.S. Social Security program is the largest government program in the world and the single greatest expenditure in the federal budget, accounting for 20.8% of the total budget? Needless to say it was introduced by yet another socialistic Democrat President – Franklin Roosevelt back in the 1930s. And what is ‘social security’ ? Its nothing but a program to take hard-earned money from the likes of you and me to allow lazy old people who didn’t bother to save for their retirement during their working years to live high on the hog.

So good on the Republicans for declaring war on Obamacare. Now I just hope they will see fit to start unwiding the other socialist and communistical atrocities such as social security, Medicare, Medicade and VA – which are also totally unconstitutional and totally un-American.

Wed, 10/02/2013 - 23:27 | 4017220 Escapeclaws
Escapeclaws's picture

Butchtrucks, ZH's new liberal version of MDB! Good one,BT, and and congratulations on picking Krasting's blog for your little joke'

Wed, 10/02/2013 - 22:13 | 4016946 max2205
max2205's picture

Kill soc sec? Fine, give me my money back or else....

Thu, 10/03/2013 - 08:29 | 4017807 GeezerGeek
GeezerGeek's picture

Just giving me my money back is insufficient. Give me my purchasing power back.

Wed, 10/02/2013 - 20:47 | 4016613 MrSteve
MrSteve's picture

Plus one  (+1) for "communistical outrage", a whole new undefined kind of term in political analysis....

Wed, 10/02/2013 - 19:13 | 4016112 ebworthen
ebworthen's picture

Retirement age at 70-1/2 is a joke but they'll have it up to 80 'ere long.

A "life expectancy" of 76 means you save and save in the Ponzi Wall Street Casino then have five of your most sick years to spend it all on healthcare.  Wow, what a deal.

That is, if you make it to 70.  Fully one-third never make it to 50, car accidents and cancer mostly.

The "save for retirement" industry is a scam so Wall Street has poker chips to gamble with.

Government promises are as hollow as the heads of the mandarins in D.C.

Either be rich or go on the dole; if you're in the middle you're a mule.

Wed, 10/02/2013 - 18:52 | 4016046 no more banksters
no more banksters's picture

The banksters cut the finance of US government, as they completely control the US money supply through the supposed "Federal" Reserve.
http://failedevolution.blogspot.gr/2013/10/the-1-blackmails-obama-us-gov...

Fed holds a significant percentage of the US debt, but it's not the only available source, so, no problem, stop begging Fed banksters and borrow money from China. Neoliberal hypocrites did it with Greenspan about 10 years ago:
http://failedevolution.blogspot.gr/2012/07/the-illusion-of-self-regulati...

After all, China still holds a significant percentage of the US debt too.

Wed, 10/02/2013 - 18:34 | 4015972 Randoom Thought
Randoom Thought's picture

IMO, the ENTIRE reason for what the US government is doing now is to create tension and mistrust between people. The US government is demanding that the US people pick sides and fight against each other. If you benefit from a corrupt government that steals from those who work and give to the elitist banking classes and those who work for government, then you are supposed to be on one side. If you are seeing your hard work and property stolen by the government then you are supposed to be on the other side.

My guess is that the outcome will not be exactly what the government expects. What will happen is that instead of fighting each other, the people will start pulling into small, local groups to come up with their own solutions... and simply just stopping giving the Federal government power over them. They will opt out of the Federal government... and for the Federal government to regain control they will have to use paid nonthinking goons and drones operated by who knows whom to murder and imprison the vast majority of the people they are sworn to serve. (Guess they lied about that too)

Wed, 10/02/2013 - 18:30 | 4015952 chart_gazer
chart_gazer's picture

no matter what solutions they come up with for the budget and the debt ceiling, they will be mathematically impossible to attain and will be sold to the american people with great fanfare using lies and twisted logic.  the stock market will rip and they will continue to manipulate precious metals lower.    

Wed, 10/02/2013 - 20:50 | 4016619 Tall Tom
Tall Tom's picture

Good. WE will continue to buy up Gold and Silver, shorting the Paper, and using the profits from that to buy up the Physical Gold and Silver. We will continue to do that till they have no more Physical to sell.

 

What is the problem with that? I like free Gold and free Silver.

 

Please don't throw me into that Briar Patch Brer Fox. Oh....Whatever you do..You can do what ye will but please don't throw me into that Briar Patch.

 

LMAO.

Wed, 10/02/2013 - 17:55 | 4015785 riphowardkatz
riphowardkatz's picture

this is a cockamamie scheme you are proposing here and one Obama would never go for.

Maybe you do not get it but a huge number of people do not want obamacare.  No one can negotiate away that fact. The constituents of the tea party won't say "ok you changed SS we will take ACA" 

Wed, 10/02/2013 - 20:05 | 4016384 Bruce Krasting
Bruce Krasting's picture

The problem with this is that it is the death of the Repubicans. Look at the polls. They indicate that the GOP is taking a hit over this. They would be murdered in the Bi elections if they take the country into default.

The 'Reds' can't gamble that big. It would be better to let ACA play out. Like you say, in two years everyone will hate Obamacare. That is what elections are made of.

Thu, 10/03/2013 - 02:43 | 4017503 John_Coltrane
John_Coltrane's picture

Bruce,

You forget mid-term elections are won by the most determined voters since turnout is always so low.  As an example, take the recent recall of those Colorado legislators who voted for gun restrictions, despite being outspent by out-of-state interests like Bloomberg (which, of course, actually worked in their favor since Bloomberg, that Fascist, is so hated).  They all got recalled by huge margins and the the others will be out by 2014-and you can take that to the NRA shooting range which is much better than any bank.  You just don't understand how determined and single minded we tea partiers are-Obama voters are a bunch of pussies.  We we retake the senate and increase the lead in the house in 2014.  Polls don't mean shit as the 2010 mid-terms showed.  No poll a year in advance predicted the landslide in 2010 or in 1994.  How great when Ted Cruz is running the senate and Rand Paul is the whip.  Finally competence and ability will rule the day.

(Full disclosure:  Perhaps a lot of confirmation bias, but in 1995 the shutdown didn't hurt in the 1996 mid-terms, and Obama is a lot weaker than Clinton)

Wed, 10/02/2013 - 20:45 | 4016596 Tall Tom
Tall Tom's picture

Yes in two years everyone will hate the ACA if it is allowed to be implemented. Then Obama cancels it and has a Single Payer Plan...National Health Insurance.

 

That has been the plan all along.

 

The Heritage Foundation. a Republican Think Tank, wrote this damned plan in the first place. Mitt Romney endorsed it and implemented it in the most liberal state of Massachusettes.

 

The Red Team DESERVES TO GO TO HELL OVER THIS. The Blue Team can also GO TO HELL as far as I am concerned.

 

Go back to the Main Stream Media and stick your head in the sand. The kick to your ass won't hurt...er...too much.

Wed, 10/02/2013 - 23:21 | 4017194 Escapeclaws
Escapeclaws's picture

The real issue with ACA is that it will cause Americans to think that they have a right to health care, like people in other first world countries. Sure ACA is a bad plan because it gives big pharma and insurance companies all they could ever ask for, but presumably it could be tweaked and adjusted later on to reduce those privileges and be less costly as a result. But as Bruce well knows, the greatest danger is to have Americans thinking they have a right to healthcare. There are further problems, such as it not being tied to an employer, which means with the collapsing economy that people would not lose their healthcare, an undesirable outcome. On the other hand, if ACA fails, insurance companies could continue to deny coverage for preexisting conditions, a desirable outcome.

Suffering and hardship for the masses--it's what's fiscally responsible!

Wed, 10/02/2013 - 20:10 | 4016406 akak
akak's picture

With all due respect, fuck the polls.

"Watching the polls" is exactly the kind of pandering, short-sighted bullshit that got us into this mess in the first place.

Wed, 10/02/2013 - 17:04 | 4015592 falak pema
falak pema's picture

you got it wrong; he doen't need a lover he needs a friend. 

Wed, 10/02/2013 - 16:29 | 4015358 andrewp111
andrewp111's picture

Obama doesn't need a deal. Once the debt ceiling is breached, he simply declares the GOP to be a terrorist organization, siezes its assets, and chucks all GOP representatives in jail. All he has to do is bring in the 82nd Airborne to DC and have them storm the House side of the capital after banning the republican party forever. Then he holds special elections in each district in which only Democrats can run.

If Lincoln could jail the entire MD legislature, and Truman could seize the steel industry, Obama could certainly do this.

Wed, 10/02/2013 - 18:43 | 4016005 Randoom Thought
Randoom Thought's picture

Yes, Reid, Durbin, Pelosi, Boxer and many of the rest are most likely irrecoverable souls lost to satan. Who the heck knows exactly what the Obomber is. He does not seem to be a human being... as least not as we know human beings.

Who the heck is wearing the Kerry wig and pretending to be Secretary of State? It sure doesn't look like Kerry... or is there some technology involved that we are not being told about? It would explain a bit, if those who play along are allowed to live in their current human bodies forever... a totally retrograde society from here on in.

Thu, 10/03/2013 - 05:30 | 4017575 geewhiz
geewhiz's picture

Kerry looks like an mkultra slave to me.

Thu, 10/03/2013 - 07:22 | 4017677 Titan Uranus
Titan Uranus's picture

Yeah, but he's got better hair than John Edwards.  You can't say that about too many guys...

Wed, 10/02/2013 - 17:40 | 4015738 Cosmicserpent
Cosmicserpent's picture

Obama's a pussy.  People line up for the whitehouse tours just to kick sand in the lawn jockey's face.

Wed, 10/02/2013 - 14:32 | 4014755 Walt D.
Walt D.'s picture

IV) Change the COLA inflation adjustment. 

This is the Arithmetic-Geometric Mean Inequality fraud - the Geometric Mean is always less than the Arithmetic Mean unless all the numbers are equal. Takes a Ph.D. in math to dream up this type of fraud. Hard to explain as well.

Arithmetic Mean : Take the sum of say 10 numbers. What number multiplied by 10 is equal to this sum.

Geometric Mean : Take the product of say 10 numbers. What sing number multipled by itself is equal to the product.

Example: 3+4+5+6 +102 = 120 = 24 + 24 + 24 + 24 +24  - 24 is the Arithmetic Mean.

             3*4*5*6*102 = 36720 = 8.184*8.184*8.184*8.184*8.184 - 8.184 is the Geometric Mean - much less than 24!

See how this scam works. 

Of course, no supermarket is going the let you take the Geometric Mean of the prices of 20 items in your cart and let you pay 20 times the Geometric Mean.


 


Thu, 10/03/2013 - 00:23 | 4017339 Escapeclaws
Escapeclaws's picture

(a + b)^2 = a^2 + 2ab + b^2

Hence, sqrt(ab) < (a + b) / 2, where ab > 0

Wed, 10/02/2013 - 14:14 | 4014657 oddjob
oddjob's picture

Hopefully someday it will read...

Obama - "I need a lawyer"

Wed, 10/02/2013 - 14:25 | 4014718 Almost Solvent
Almost Solvent's picture

But he is a lawyer!

 

Those that represent themselves have a genius for a client - or something like that.

Wed, 10/02/2013 - 14:11 | 4014640 orez65
orez65's picture

"... it looks like we are headed off the cliff on the debt limit."

Fucking thieves!

Learn to live without stealing.

No more counterfeiting.

No more increase of the debt limit.

Fuck you all.

Wed, 11/06/2013 - 21:24 | 4017444 Widowmaker
Widowmaker's picture

Remove the income tax.

Wed, 10/02/2013 - 14:04 | 4014606 Big Ben
Big Ben's picture

ACA is unpopular. If the House is able to delay it, most people will be grateful to the House.

Changes to SS would be very unpopular. So it would be extremely stupid for trade SS changes for ACA deferral. Which means that is probably what they will do...

Do NOT follow this link or you will be banned from the site!