United States of Austerity

So this is also going on:

WASHINGTON (AP) - Just as 55 million Social Security recipients are about to get their first benefit increase in three years, Congress is looking at reducing future raises by adopting a new measure of inflation that also would increase taxes for most families - the biggest impact falling on those with low incomes.

If adopted across the government, the inflation measure would have widespread ramifications. Future increases in veterans' benefits and pensions for federal workers and military personnel would be smaller. And over time, fewer people would qualify for Medicaid, Head Start, food stamps, school lunch programs and home heating assistance than under the current measure.

Taxes would go up by $60 billion over the next decade because annual adjustments to the tax brackets would be smaller, resulting in more people jumping into higher tax brackets because their wages rose faster than the new inflation measure. Annual increases in the standard deduction and personal exemptions would become smaller.

Despite fierce opposition from seniors groups, the proposal is gaining momentum in part because it would let policymakers gradually cut benefits and increase taxes in a way that might not be readily apparent to most Americans. Changes at first would be small - the Social Security increase would be cut by just a few dollars in the first year.

[...]

The proposal to adopt a new Consumer Price Index was floated by the Obama administration during deficit reduction talks in the summer. Now, it is one of the few options supported by both Democratic and Republican members of a joint supercommittee in Congress working to reduce government borrowing.

The committee of six Democrats and six Republicans is struggling to come up with a plan to reduce government red ink by at least $1.2 trillion over the next decade. Changing the inflation index alone would put them a sixth of the way there.

"I think the thought process behind this is, slip this in, people won't understand it," said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.

[...]

In all, adopting the chained CPI would reduce Social Security benefits by $112 billion over the next decade. Federal civilian and military pensions would be $24 billion lower, according to the nonpartisan Congressional Budget Office.

If adopted across the government, fewer people would be eligible for many anti-poverty programs because the poverty level also would increase at a lower rate each year. That would result in fewer people living below the official poverty line, despite having the same income.

The tax increases would hit low-income families the hardest, while high-income taxpayers would see smaller changes. The wealthiest taxpayers already pay taxes at the highest marginal rate, currently 35 percent.

For example, by 2021, taxpayers making between $10,000 and $20,000 would see a 14.5 percent increase in their federal taxes with a chained CPI, according to an analysis by the Joint Committee on Taxation. Taxpayers making more than $1 million would get a tax increase of 0.1 percent.

Who are some of the taxpayers making $1 million a year (or more)?

The number of Americans who are millionaires is pretty low — about 1 percent of the population. Members of Congress who are millionaires? Nearly 50 percent.

That's according to the Center for Responsive Politics, a nonpartisan watchdog group that tracks money in politics.

Of the 435 members of the House, "244 current members of Congress are millionaires — that's about 46 percent and that includes 138 Republicans and 106 Democrats," says Center for Responsive Politics spokesman Michael Beck.

Beckel is talking about net worth, the total amount of money and assets lawmakers have, according to their own financial disclosure forms. In fact, there are probably many more millionaires in Congress, since lawmakers don't have to include the value of their family home and other details.

Sorry apple pie, you are being replaced by bootstrap pie.