Obama's Austere Budget + Glenda Jackson Takes on Thatcherism

Obama's budget is the lead story in the New York Times this morning. Nothing much new is covered by Jackie Calmes' story, "Obama Budget Whittles Democratic Party Pillars," compared to the one she wrote last week where she confirmed that Obama was indeed going to propose a reduction in Social Security cost of living adjustments. Calmes' focus today is more on the politico-historical aspect of a Democratic president going after the landmark programs, Social Security and Medicare, associated with the New Deal and the Great Society.

I found myself in agreement with the analysis of the unsigned editorial on the Opinion page, "The President's Budget." There the Times argues that a chained CPI is a bad idea; that it would have been a better to raise "the wage cap subject to a payroll tax." But the rest of Obama's budget ideas the editorial board is in agreement with:

Rejecting the president’s budget also means passing over a host of good ideas — chief among them, replacing the arbitrary and damaging sequestration cuts with more sensible reductions, along with ways to make the rich pay a larger share of revenues. 

The plan would cut spending by about $1.2 trillion over a decade, which is more than is necessary and more than Mr. Obama previously offered. The cuts include $306 billion from Medicare providers by relying more on generic drugs and demanding greater efficiencies from doctors and hospitals. Drug companies would have to pay a much larger share of the costs borne by low-income Medicare recipients. Farm subsidies would be cut by $38 billion, and spending on the military, the State Department and homeland security would also be reduced. 

Couples with incomes starting at about $170,000 a year would have to pay about 5 percentage points more for Medicare premiums. And there would be several other significant tax increases: The carried-interest tax break used by wealthy hedge fund operators would rise to ordinary-income levels, overall tax breaks for couples making more than $250,000 would be reduced, and a “Buffett Rule” that would ensure that millionaires pay at least 30 percent of their income in taxes. The federal cigarette tax would almost double to $1.95 a pack. Collectively, new revenues would bring in about $600 billion in a decade.

The Times interprets Obama's offering on Social Security as a feint to expose the phoniness of Republican posturing on deficits. This perspective is completely demolished by a Yves Smith post yesterday on naked capitalism, "Obama Moves Forward with Cutting Social Security and Medicare as We Lecture Europe Otherwise." I think her concluding paragraph is one that needs to be taken to heart by all of us who have stuck with Obama up until now:

This is what the defenders refuse to acknowledge: the Obama critics, again and again, have been proven right, yet we have seen remarkably few mea cuplas, let alone apologies (and that includes you, Charles Pierce and Scott Lemieux). Obama is proving to be a litmus test of where commentators’ loyalties really stand: is it to “liberal” beliefs, which get redefined evermore to the right, or is it to the Democratic party neoliberal technocrats, which Obama embodies? The budget battle is pure and simple about squeezing the middle class dry, and those who pretend otherwise are simply insulting the intelligence of their audience.

Let's conclude this morning with a video from yesterday of MP Glenda Jackson taking on the hagiography of the matriarch of neoliberalism, Margaret Thatcher: