Ezra Klein, who's been a reliable White House conduit, says the White House is going to make a deal with the Republicans that will accept a relatively small increase in taxes on millionaires -- in exchange for the chained CPI that will cut benefits for the vulnerable elderly. By the way, not only will the chained CPI cut benefits for the elderly (disproportionately affecting women), it will also affect benefit payments for disabled veterans.

In addition to being an actual cut, it's a cut that hides its face behind the skirts of technical jargon. After voters were told that Social Security cuts are "off the table," we learn that they're simply going to be hidden under a different shell in this game. (Remember when I told you to pay attention to Obama using the word "slash"?) This is more than discouraging; it's undemocratic. Voters were clear and unambiguous: they supported Obama to prevent Medicare and Social Security cuts, and the president accepted their support by assuring them it wouldn't happen. But he used enough weasel words that some of us figured what was coming.

As Atrios says, we're kicking it old school. Get your dialing fingers ready and tell your senators and congress critters: No Social Security cuts! The White House switchboard is 202-456-1414. (Leave their responses in the comments.)

Hi, my name is [NAME] and I'm a constituent living in [CITY].

I would like the senator to commit to opposing any cuts to Social Security, Medicare or Medicaid benefits.

This includes committing to oppose any plan which raises the retirement age or Medicare eligibility age, or changes the cost-of-living adjustment to reduce benefits over time -- all of which are benefit cuts.

Can I count on the senator to vote against any bill that includes any cuts to Medicare, Medicaid or Social Security benefits?

Here are the coming attractions:

Boehner offered to let tax rates rise for income over $1 million. The White House wanted to let tax rates rise for income over $250,000. The compromise will likely be somewhere in between. More revenue will come from limiting deductions, likely using some variant of the White House’s oft-proposed, oft-rejected idea for limiting itemized deductions to 28 percent. The total revenue raised by the two policies will likely be a bit north of $1 trillion. Congress will get instructions to use this new baseline to embark on tax reform next year. Importantly, if tax reform never happens, the revenue will already be locked in.

On the spending side, the Democrats’ headline concession will be accepting chained-CPI, which is to say, accepting a cut to Social Security benefits. Beyond that, the negotiators will agree to targets for spending cuts. Expect the final number here, too, to be in the neighborhood of $1 trillion, but also expect it to lack many specifics. Whether the cuts come from Medicare or Medicaid, whether they include raising the Medicare age, and many of the other contentious issues in the talks will be left up to Congress.

The deal will most likely attempt to modify the effect of the chained CPI with a bump in benefits, as recommended by the Simpson-Bowles chairmen's report. For the typical single elderly woman, the cut from the chained CPI would reduce her monthly benefits by an amount equal to the cost of one week’s worth of food each month at age 80. She would still have two years to wait before receiving any help from the bump-up.The Bowles-Simpson bump-up would restore her monthly benefits to current levels for only two years – and then benefits would fall behind again.

The White House has found a prominent progressive economist to give them protective cover.

Neither of the two proposals released yesterday include a continuation of the payroll tax cuts -- which the CBO says would have the same negative effect on the economy as having no deal at all.

Digby points out that making a deal at this stage that only postpones the debt-ceiling fight for one year means more cuts will be coming -- and that Obama wants it that way. She also informs us that the chained CPI will hike taxes in the lower brackets.

Krugman's reaction is a little more optimistic than mine:

Unlike what we’d heard from Republicans before, this contains stuff that Obama can’t get just by letting us go over the cliff: more revenue than he could get just from tax-cut expiration, unemployment and infrastructure too. But it has a cost, those benefit cuts.

Those cuts are a very bad thing, although there will supposedly be some protection for low-income seniors. But the cuts are not nearly as bad as raising the Medicare age, for two reasons: the structure of the program remains intact, and unlike the Medicare age thing, they wouldn’t be totally devastating for hundreds of thousands of people, just somewhat painful for a much larger group. Oh, and raising the Medicare age would kill people; this benefit cut, not so much.

The point is that we shouldn’t be doing benefit cuts at all; but if benefit cuts are the price of a deal that is better than no deal, much better that they involve the CPI adjustment than the retirement age.

But is this rumored deal better than no deal? I’m on the edge. It’s not clear that going over the cliff would yield something better; on the other hand, those benefit cuts are really bad, and you hate to see a Democratic president lending his name to something like that. There is a case for refusing to make this deal, and hoping for a popular backlash against the GOP that transforms the whole debate; but there’s also an argument that this might not work.

I want to see more — and also want to see whether the Republican crazies scuttle the whole thing before it even gets off the ground. If they don’t, there will be some serious agonizing for progressives, yours truly included.

Dylan Matthews of the Washington Post gets the last word:

Here is a sentence you won’t hear politicians or policy wonks saying in the next few weeks: “We should pay Social Security beneficiaries less in the future and push a lot of people into higher tax brackets.” Here is a sentence you almost certainly will hear: “Let’s adopt chained CPI.”

Mike Lux talks about the Villagers' salivating at the thought of NY Mayor Michael Bloomberg considering a third-party run for the presidency. He's surprised that the third-party push isn't coming from the left wing, but from a certain kind of "fiscally conservative, socially liberal" centrist. He explains:

In my mind, being for the middle class is not exclusive of being for poor people - I am for helping everyone in the other 98%, as my friends at MoveOn would put it. But I am for having a party that is unapologetic about focusing on helping expand and build and promote the American middle class. I am for expanding poverty programs and raising the minimum wage and a strong public education system in poor neighborhoods and a path to citizenship for immigrants because I want them able to join the middle class. The greatest years in American history in terms of the living standards for most Americans were the three decades after the New Deal and World War II. In those years, the labor movement, the GI Bill, the financial stability caused by FDR's financial regulation, the minimum wage, Social Security and the rest of expanded safety net, the building of the interstate highway: all of these things promoted steadily rising prosperity and the biggest, most stable and secure middle class in the history of the world.

My party, the political party I happily associated myself with and worked to promote before I could even vote, the Democrats, were the party that promoted the idea of a strong and secure middle class, and a hand up to the poor so more of them could join in that American dream. But right now, there is no party whose clear and abiding mission is to promote and support and fight for that American middle class. The Republicans do their faux populist anti-intellectual schtick to get working and middle class votes, but all of their policies are unapologetically on behalf of the wealthy and powerful. The Democrats are split down the middle between the Rubin economics acolytes who believe that the best way to build a good economy is to make sure the big banks are healthy, and those of us progressive populists who fight on behalf of the middle class and the poor- that other 98%.

The nice thing about Bloomberg running, and spending 200 million or whatever to do it, is that it would force Democrats to make a choice, and with Bloomberg taking up the pro-corporate space, open things up for a full throated campaign on the side of middle class workers and families. But whether Bloomberg runs or not, the Democrats don't have much hope unless they choose the side of the middle class. The exit polls could not have been clearer that the voters we lost in 2010 were primarily those working and middle class voters who have been hammered by this recession, and they are going to keep voting against the party in power until they find someone who will start fighting heart and soul for a better life for them. This mushy sometimes-with-the-bankers, sometimes-with-the-middle-class thing isn't working, and the real swing voters, as opposed to whatever it is the DC centrists are talking about, are the populist working class folks.

The high school I went to in Lincoln, NE, was 3 blocks from the biggest factory in town, and we were known as the gearhead school- the kids who loved cars and knew how to repair them, kids who went hunting with their dads on the weekend, kids who were going to work at a factory or construction job, or maybe join the armed forces, when they got out of school. They are now in their early 50s, most of them having worked hard their whole lives, with little saved up for retirement and a house that has droped in value. Their most fervent hope is to be able to keep working until they are 65 so they won't be a burden on their kids, because their kids are struggling to find economic security as well. I want a political party that unapologetically fights for those kinds of folks, that puts their economic needs at the core of their party's agenda, and that will prioritize what they need over what the big money lobbyists in DC want. And here's the deal: that kind of party, the party the Democrats were in their heyday in the years after the New Deal when their mission was building the middle class, would actually win a lot of elections. Is becoming that party again, unequivocally and passionately, too much to ask the Democrats for?

See that picture up there, of all the front groups the insurance industry used to erode health care reform? Mike Lux has an interesting piece up at Open Left, where he talks about how much more effective it is when outside groups deliver your message -- and how Obama discouraged big donors from supporting them, funneling the money to OFA instead. Ah yes, I remember it well:

Independent group messages have far more credibility and clout than those from party and candidate committees- even groups with generic-sounding names no one has heard of. Republican strategists like Rove got this early, and went about methodically organizing a network of corporate money to get involved in independent expenditure ads in swing races all over the country. But the Obama White House, sure of its fundraising ability and organizing genius, has consistently sent the signal to Democratic donors to not support outside efforts. They did it after they won the primary in 2008; they did it when they set up OFA to operate solely inside the DNC in 2009; they did it during the health care fight when they felt HCAN was being a little too independent in pushing for a public option, sending a clear signal to donors not to give to them at crucial times during the fight; they did it when ACORN had some bad publicity, very quickly making the decision to distance themselves and let them die even though no group has registered more voters or turned out more people in the last 10 years than ACORN.

I have been fighting this battle inside Democratic strategy circles for 15 years now, but the problem is worse with the current team at the White House. The folks running the Obama political operation have always believed they could control the message and the resources of the party better than anyone else, and that they didn't need or want to empower outside progressive groups. Now embattled House and Senate candidates are paying the price, and it is a bitter price to have to pay. The groups that do have resources that are pro-Democratic- labor, MoveOn, Emily's List, the trial lawyers- are doing their best to stem the tide. But corporate money in the post-Citizens United era is swamping us, and unlike in some cycles in the past (2004, 2006), wealthy progressive donors were sent signals not to engage, or just not cultivated at all, and the result is that we are being badly outspent.

One final note on all this: the irony of outside progressive groups being blamed for not doing enough to help the Democrats when the White House has been complaining about the "left of the left" and the "professional left" for many months- and de-motivating donors the whole time- should not be lost on anyone. You can't attack progressives for being too strident and then wonder why they aren't doing more and still have much credibility.

It's crazy, isn't it? It happens like clockwork the minute a Democrat's in the White House. Mike Lux on the Democratic deficit talk that's all the rage these days (as pointed out by Atrios the other day). Which once again raises the question: What, exactly, do Democrats stand for?

So just to summarize here: the deficit is caused by tax cuts for the rich, an economic collapse caused by wealthy bankers which resulted in bailouts for those wealthy bankers plus massive pain for middle income and poor people, tax loopholes and corporate subsidies designed to help the wealthy, plus two wars and wasteful defense spending (much of which goes into the pockets of wealthy defense contractors). And the solution for the deficit hawks: target middle class and lower seniors for social security cuts, and put in a regressive tax that is a burden to low and middle income people.

Justice: American style.

Elites are selling this as a grand compromise: Conservatives get Social Security cuts, and liberals get a tax increase. Oh, boy. My question is: what do regular folks get out of the deal besides screwed?

Progressives ought to be screaming bloody murder at this phony compromise, but we also ought to have a constructive alternative on how we end the budget deficit. There are plenty of budget cuts we can live with: ending wasteful defense spending, take away subsidies to the big corporate farms, put a strong public option in health care reform, have the federal government negotiate drug prices, end the wars in Iraq and Afghanistan. There are plenty of taxes we can raise that wouldn't soak the people who have been most hurt by the economy of the last decade, including a financial transactions tax on the big banking speculators, an end to the corporate tax loopholes and offshore tax avoidance, bringing taxes on the wealthy back to the level they were before the Reagan tax cuts.

If you did all that, even waiting another year or two to let the economy get on a firmer footing, you could easily balance the budget before the 2010 decade is out and have plenty of money left over to invest in the infrastructure and schools that we so desperately need.

If you want to solve the deficit, target the folks whose time at the money trough caused it in the first place: the big banks, the defense contractors, the drug and insurance companies, the agribusiness giants, and the super wealthy that got all of those huge tax cuts in the first place.

First I want to say that I had an incredible time at Netroots Nation. What a treat to see so many in the liberal blogosphere gather to discuss health care and virtually every other issue we face. Kudos to all the politicians who showed up to represent their positions as well.

Anyway, a huge topic that was raging through the weekend was the state of the 'public option.' Since the Baucus Dogs haven't finished their bill we still don't have the goods to really make any sense of what the House of Lords is going to put forth. We do have the Senate HELP committee bill, but the Baucus Dogs are trying to muck up the works by stalling the process and trying to empower the teabaggers. Any member of Congress that is affected by the lunatic fringe appearing at these events should resign immediately.

I was talking to Digby at length about it over the weekend and she said she had a meeting with Mike Lux and he laid out a possible scenario to her that could come to pass even if Grassley, Bayh, Conrad, Baucus, Nelson and the rest of the paid off shills of the health insurance industry come out with a bill that doesn't have a 'public option.'

He later wrote about it in his piece: The News of Its Death Is Greatly Exaggerated

Here are a couple of possibilities for getting a bill passed:

A. The first is that conservative Senators are given a fig leaf compromise on the public option, so that they can say to people they forced a compromise, and then are brought over with all kinds of other incentives that make them more comfortable with the bigger bill.

B. The second is that the conference committee simply breaks the bill in half, one half being the less controversial part that everyone agrees upon, the other being the public option and the financing, both of which can go through the reconciliation process. Then Obama and Reid muscle the 50 votes they need for support.

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No surprise that a populist progressive Democrat like me would like President Obama's State of the Union address that talked so much about lifting up the middle class. But there's a background story on getting to the president's message last night that is little known but worth telling.

January of 2011 was a very bleak moment for progressive leaders. The Tea Party Republicans had just taken over the U.S. House as well as way too many state legislative chambers and governors' seats, but that wasn't the only reason we were depressed. President Obama, clearly shaken by the massive losses of 2010, was in retreat both in his messaging and in his political strategy. He had decided to spend almost as much of his rhetorical firepower as the Republicans on the deficit issue, and was eagerly looking to compromise with them -- "meet them more than halfway," as he was fond of saying. Obama had just given in on a two-year extension of the Bush tax cuts for the top 2 percent, and it was clear he was willing to give up a lot more.

By the summer of 2011, Obama's political low point, he had given up an enormous amount in spending cuts for progressive priorities on both a budget-cutting compromise in the spring and the debt ceiling deal in the summer, and gotten no concessions at all from the Republicans on tax increases for the wealthy.

Three things happened, though, that turned the political tide and brought us to our present political moment: a handily re-elected and confident president with his highest approval ratings ever and a strong populist progressive message.

First, this president and his political team showed themselves quite good at learning from their mistakes, as they switched strategies and message. Second, the Republicans seriously over-reached, following their far-right base over the political cliff on issues, and nominating the ultimate symbol of Wall Street arrogance as their party's standard bearer. And third, progressives showed that they could create a way to influence the debate and pull the president toward a stronger, clearer message.

The first of these two things are well known and well documented. The third is not, but it is a story progressives should hear and understand as they move forward to work on influencing the debate over the next few years. It all starts in that bleak month of January, 2011. Faced with Tea Party Republicans on a roll and a defensive back-tracking president, progressive leaders from the labor movement, other progressive organizations, and the Netroots movement met together to talk about how we could create a progressive populist center of gravity powerful enough to pull the president in our direction.

What we believed is that we had not been effective over the previous couple of years in telling our story of how the economy works and why Americans should choose progressive policies that focused on helping low- and middle-income families. We invited to the discussions smart message folks like Stan Greenberg, Celinda Lake, Paul Begala, Drew Weston, and Van Jones to help us craft a narrative that would have a strong appeal to the vast majority of American voters.

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