Alice Rivlin Admits Chained CPI Is A Benefit Cut To Social Security — But Loves It Anyway

Alice the Malice Rivlin went on with Andrea Mitchell yesterday to discuss the boring sequester debate and, as usual, she trumpets what every other deficit scold in the Beltway says: Cut entitlements or adopt Simpson-Bowles. At least she admits that switching to a chained CPI is an actual cut in benefits.

Rivlin:… one thing is the reform of the consumer price index which is really a technical adjustment, but it would mean slightly lower social security benefits and other benefits going forward. Now you could offset that with other changes in the law, but it is the right thing to do and his own troops were kind of unhappy about that, but he put it out there and he has certainly put Medicare adjustments, various sorts on the table.

Now, why is cutting benefits to seniors the ‘right thing’ to do, Alice? Why do we have to pay for the Iraq and Afghanistan war and not the rich? And why do we have to pay for the financial economic collapse and not the rich, Alice? And WTF are these mythical offsets to draconian cuts to Social Security that she speaks of? Is she talking about the proposed ‘birthday bump? That’s really a horseshit thing to do.

And it doesn’t cover anything for like twenty years after you retire, which won’t help many people since only the wealthy have seen an increase in life expectancy.

Some propose adopting the chained CPI with an added “birthday bump” – a 1
percent benefit increase for each of years 20 to 24 after initial retirement eligibility. But this supposed “sweetener” only affects those who live until becoming eligible for the birthday bump. Wealthier seniors live longer than their lower-income counterparts, so the “birthday bump” does not adequately protect those who need Social Security benefits the most. Even with it, the birthday bump does not fully compensate for the cut the chained CPI entails.

Digby explains in detail how the chained CPI hurts seniors moving forward.

The problem is not that their private pensions run out. (Not very many people have private pensions anymore.) The problem is that the Chained-CPI reduces the cost of living adjustment down by 0.3 percentage points annually. That translates into a cut in benefits of 3 percent for those who have been retired ten years, 6 percent after 20 years, and 9 percent after 30 years.

The people who have been retired the longest and are, therefore, the poorest, will see the largest cuts. A 1% “bump” isn’t going to make much of a difference. This is a cut. And it’s substantial. It will affect the poor the most and it’s going to take a lot more than “tweaking” to make up for it. Moreover, it’s not just the poorest of the poor who will be affected. There seems to be some belief in Washington circles that 70-year-olds who are living on 25k- 35k a year won’t feel a cut in their incomes, which just goes to show how distant they are from the way people really live.

And why bring in Social Security at all, since it has nothing to do with the federal deficit? The GOP needs its pound of flesh from the working class, but the Beltway never asks them why? Why be so f*&king cruel and inhumane? I wish we lived in the Land of Oz and we could throw water on the Fix The Debt and Alice Rivkin assholes of the world so that they would all melt away for good.

The entire Beltway cable TV establishment never has on any liberal members of Congress or any other proponents that are against cutting safety net benefits –except when they want a Crossfire-style formatted segment with another deficit scold.
(h/t Scarce for the video)

Teamsters float contract outline to UPS as talks race to meet unofficial March-end deadline

Investment firm says UPS shippers ready to move to FedEx next month.

The Teamsters Union over the weekend disclosed for the first time the broad strokes of a contract proposal made to UPS Inc., as the company races to ink a tentative pact with the union by month’s end to avoid possible shipper defections to rival FedEx Corp.

Ken Hall, director of the union’s package division, outlined the Teamsters proposal, which calls for a five-year contract, in a national conference call Saturday with UPS shop stewards. All UPS Teamsters would receive a $1-per-hour wage increase in each year of the contract and a $1.50-per-hour annual increase from current levels to cover pension and health benefits. The current contract, signed in 2007, calls for a $1 an hour annual increase in the company’s contribution benefits.

The union proposal also calls for the creation of an undefined number of so-called “22.3 jobs” in each year of the contract. Those jobs are named after the article in the 1997 agreement reached after the Teamsters shut down UPS that summer with a 15-day strike. The language of the article required the company to create 20,000 full-time jobs between 1998 and 2008 by combining part-time positions into full-time work. The Teamsters, and in particular the dissident group Teamsters for a Democratic Union (TDU), have said UPS has not done all that it could to create that many full-time positions.

The proposal would increase the starting pay for part-timers to $15 an hour from the current $8.50 an hour. The union will not accept any contract offer calling for active members to pay premiums on their health insurance.

The contents of Hall’s proposal were contained in a communiqué by TDU issued soon after the conference call ended.

TDU said in the communiqué that Hall reviewed a “series of tentative agreements” relating to the company’s “SurePost” program with the U.S. Postal Service (USPS). Under the program, UPS transports packages—mostly merchandise ordered online—deep into the USPS physical network, where it is delivered the “last mile” to the final destination by letter carrier. The program is offered at low cost to retailers and e-tailers and has been a successful revenue-generator. However, the Teamsters have long complained that SurePost takes business away from UPS drivers.

One of the proposals, according to TDU, would require that all SurePost parcels weighing more than 10 pounds or wider than 3 feet would be delivered by a UPS driver. Hall said a program called “SurePost Redirect,” where UPS uses technology to reroute SurePost packages to the UPS system and away from the Post Office, has resulted in 20 percent of all SurePost shipments moved by UPS drivers.

UPS did not return a request for comment. The Teamsters declined to comment on Hall’s proposal or even confirm that he had made one. It is believed UPS is seeking a seven-year contract, which the union does not favor.

The current agreement expires at the end of July, and both sides have been negotiating on and off since September with the goal of announcing a tentative agreement by the end of March. In its weekly “Friday Freight” column published March 22, investment firm Wolfe Trahan said it was told by an unidentified Teamster source that it’s unlikely a tentative deal will be struck by the end of March due to the complications surrounding the health care discussions. However, the contact expressed confidence that a deal will get done long before July.

The firm also said it’s been told by some shippers they would accelerate shifts in volumes to FedEx starting next month if a tentative deal isn’t reached by March 31. Ed Wolfe, a long-time transport analyst and co-founder of the firm, surmised that diversion is already occurring. Wolfe noted that FedEx reported a 15-percent year-over-year increase in ground volumes in its fiscal third quarter that ended in February. That compares to year-over-year gains of 11 and 8 percent, respectively, in the prior two fiscal quarters, he said.

The volume figures include shipments generated by FedEx’s own initiative with the USPS, called “SmartPost.”

A FedEx spokeswoman declined comment.

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