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Less than Super ideas

Locked_Wallet.jpgAfter months of closed-door meetings and apparent deadlock, the Super Committee is finally working toward achieving their goal of $1.5 trillion in cuts - by proposing $4 trillion in cuts.

According to the Washington Post yesterday, Committee leaders suggested picking up where Obama and Boehner left off in June, discussing a plan that included provisions to raise taxes, raise the Medicare eligibility age and using a less generous measure of inflation to calculate Social Security benefits.

Both parties have proposals, and they look like this:

Democrats outlined a package in the range of $3 trillion, including about $575 billion from health-related programs like Medicare and Medicaid and $400 billion more in cuts from appropriations. An additional $250 billion would come out of other federal benefits such as farm subsidies or the retirement system for federal workers. Though it is still a contentious issue inside the party, the leadership has also signaled it might include adjustments in the Consumer Price Index, impacting Social Security payments, as well as annual adjustments in the tax code. But all this would be contingent on also getting the added $1.3 trillion in tax revenues.

The Republican plan shares much of the same ground but allows for only $640 billion in revenues, and when this is broken down, very little comes directly from the sort of tax increases Democrats have been demanding.

Time after time, elected officials seem to be looking at cutting costs for those who can least afford it. Here, about $440 billion appears to be generated by increased government fees and high patient co-pays under Medicare. Changes to the way the CPI (or Consumer Price Index) is calculated with the cost of living adjustment are also on the table, yet another terrible idea to "generate" revenue.

The chained CPI would be harmful to the well-being of older Americans, veterans and beneficiaries with disabilities. A typical worker who retired at age 65 would lose $1,000 a year by age 85, according to data from the Social Security Chief Actuary. New disabled worker beneficiaries would face similar cuts within Social Security. A disabled veteran who started receiving VA disability benefits at age 30 would have his or her benefits reduced by nearly $2,300 at age 65. Also, if applied to SSI, the percentage impact on benefits would be even greater due to the structure of the current SSI program.

Nor would use of the chained CPI amount to shared sacrifice. Over two-thirds of the revenue generated by adopting it government-wide comes from middle-class and low-income spending programs, with over half the total revenue coming from Social Security. Only about one-third comes from increased taxes, which are regressive coming disproportionately from lower- and middle-income taxpayers.

Cuts to Medicaid would also be disastrous, since it is a lifeline for the more than 50 million Americans who have nowhere else to go. Medicaid is especially crucial to people in need of community- and institutionally-based long-term care services. Medicare does not cover most long-term care costs, and private insurance plans that cover long-term care are often prohibitively expensive. As a result, many individuals exhaust their assets under the weight of steep long-term care costs, and have nowhere to turn but Medicaid. In short order, long-term care patients and their families can go from the middle class to a life of poverty in which they need assistance. But surely, the Super Committe thinks, these folks can afford more cuts.

Politcio also reports that on the spending side of the equation,

The GOP proposal assumes more cuts than the Democrats, but differences are less dramatic than on the tax side. The health-care and benefit savings are both larger, including $400 billion – or $150 billion more than the Democrats proposed — that would come from mandatory spending other than Medicare and Medicaid. The details of these savings aren’t known, but the numbers suggest a new round of potential cuts from food stamp and federal nutrition programs, which have already been a target for the GOP in this Congress.

Why lawmakers would be looking for savings from food stamps of all places is absolutely baffling. Though when you consider that some senators think the food stamp program is, "Out of control", then the tortured logic becomes more clear. Never mind that over 45 million Americans, nearly 15% of the entire country, depend on the already underfunded program. To qualify for food stamps, an individual's income can't exceed $1,174 a month or $14,088 a year -- an amount that is 130% of the national poverty level. The average food stamp benefit was $133.80 per person and $283.65 per household. Can you live on less than $15,000 a year?

Yes, these are all just proposals that are designed to be opening offers in an ongoing negotiation between two very different factions. But the very fact that cuts to these vital programs are on the table at all is very, very disturbing. In a time when the richest 1 percent of earners more than doubled their share of the nation’s income, it's pretty clear that we can do better than this.

We have to do better than this.