This morning brings news of a possible deal on the horizon, concerning the “fiscal cliff.” Obama would get the an extension of the Bush tax cuts for households with incomes under $400,000 (not $250,000, which was his goal), a two-year debt limit reprieve, the elimination of the sequester, and additional revenue and the extension of emergency unemployment benefits.
What he is willing to give up for this? Quite a lot, actually. It amounts to about half a trillion dollars in future cuts to social programs (the nature of these cuts have yet to be determined), and also significant cuts to Social Security benefits, in the form known as “chained CPI.” “Chained CPI” is an alternative way of calculating the cost of living which will lower benefit amounts.