Former Wyoming Senator Alan Simpson, the co-chairman of President Obama's deficit commission, has sparked calls for his resignation after sending an offensive and sexist note to Ashley Carson, the executive director of the Older Women's League. While such calls are reasonable -- Simpson's comments were certainly more offensive than remarks that led to the resignation of other people from the Obama administration -- the Senator's determined ignorance about the basic facts on Social Security is an even more important reason for him to leave his position.
I was also a recipient of one of Simpson's tirades. As was the case with the note he sent to Carson, Simpson attached a presentation prepared for the commission by Social Security's chief actuary. Simpson implied that this presentation had some especially eye-opening information that would lead Carson and me to give up our wrong-headed views on Social Security.
While I opened the presentation with great expectations, I quickly discovered there was nothing in the presentation that would not already be known to anyone familiar with the annual Social Security trustees' report. The presentation showed a program that is currently in solid financial shape, but somewhere in the next three decades will face a shortfall due to an upward redistribution of wage income, increasing life expectancy, and slow growth in the size of the workforce. The projected shortfall is not larger than what the program has faced at prior points in its history, most notably in 1982 when the Greenspan Commission was established to restore the program's solvency.
It was disturbing to see that Simpson seemed surprised by what should have been old hat to anyone familiar with the policy debate on Social Security. After all, he had been a leading participant in these debates in his years in the Senate.
Simpson's public remarks also seem to show very little knowledge of the financial situation of the elderly or near elderly. He has repeatedly made references to retirees driving up to their gated communities in their Lexuses. While this description may apply to Simpson's friends, it applies to very few other retirees, the vast majority of whom rely on Social Security for the bulk of their income. Cutting the benefits of the small group of genuinely affluent elderly would make almost no difference in the finances of the program.
Furthermore, the baby-boom generation that is nearing retirement has seen most of its savings destroyed by the collapse of the housing bubble that both wiped out their housing equity and took a big chunk of the limited money they were able to put aside in their 401(k)s. Simpson shows no understanding of this fact as he prepares to cut benefits for near retirees.
He also doesn't seem to have a clue as to the type of work that most older people are doing. While it is possible for senators to continue in their jobs late in life, nearly half of older workers have jobs that are either physically demanding or require they work in difficult conditions. Simpson seems totally clueless on this point when he considers proposals to raise the retirement age.
The key facts on Social Security are not hard to understand. The shortfall is relatively minor and distant. Most retirees have little income other than their Social Security, and most workers would find it quite difficult to stay at their jobs in their late 60s or even 70. We might have hoped that Senator Simpson understood these facts at the time when he was appointed to the commission, but we should at least expect that he would learn them on the job.
His determined ignorance in the face of the facts is the most important reason why he is not qualified to serve on President Obama's commission. Someone who is co-chairman of such an important group should be able to critically evaluate information, not just insult and demean his critics.
First, the money that is put into payroll taxes isn't ours. Once that check is cashed it belongs to the government and it is up to them whether or not the people receive a dime of it. That was decided by the Supreme Court in 1960:
http://www.ssa.gov/history/nestor.html
Second, the “garbage I've been fed” comes directly from the CBO statistics. Not the analysis of the statistics, but the statistics themselves. It's called "primary source material."
Third, the national debt is not a partisan issue. Watch IOUSA the movie at
http://www.youtube.com/watch?v=O_TjBNjc9Bo
Finally, the only thing worse than what the Bush administration did to the national debt is what the current administration is doing right now. For every trillion dollars spent, every American citizen takes on another $2,800 each in debt. That includes the 50 babies who were born in the time it took me to type this reply. And remember that only half of our population even pays federal income taxes, so the actual cost to those who pay taxes is much higher. Sales taxes don’t provide federal tax revenues. It took a Democratic president and a Republican congress (who kept shutting down the government until budgets were cut) to create that surplus everyone is so proud of.
http://action.firedoglake.com/page/s/CanTheCatfoodCommission
Also FDR's Grandson speaks out:
FDR's Grandson Debunks "Mythology of Fear" About Social Security
http://crooksandliars.com/karoli/fdrs-grandson-debunks-mythology-fear-about
For someone earning $1,000,000, their SS tax base is capped at $106,800, thereby paying SS taxes at the effective rate of less than 1%.
If Social Security taxes were paid on all earned income, the SS tax rate could be decreased for all Americans. But, that is too reasonable - that top 2% needs to pay less so they can up that total ownership of America to more than 53% (with those tax savings).
Alan Simpson apparently has NO understanding of how the majority of Americans live. I think there was an article just the other day that reported that 60% of Americans retiring now, don't have enough money to live on. Maybe, Mr. Simpson should find that article and read it.
Gads! haven't the American people been ripped off enough? then they INSULT US too!
Or is it that facts do not matter?
What do you mean by "average". I'm sure it varies wildly depending on what one has paid into it.
It's not a lot, I can tell you that
For evey year you paid SS tax, you get a credit equal to the amount you were taxed on (top 35 years, starting the year AFTER you turn 21). If you made nothing in a year, a zero is entered (even though there are special provisions for those who have a lot of zeros).
When you retire, they "bring forward" every dollar that you received a credit for by using tables that "inflate" prior year earnings to current year dollars. The "inflating" stops at the year you turn 62.
They add it all together, and divide it by 1260 (the number of months in 35 years). This is your Average Idexed Monthly Earnings (AIME). From here a factor is applied to determine the Primary Insurance Amount (PIA). PIA equals -
(a) 90 percent of the first $761 of his/her AIME, plus
(b) 32 percent of his/her AIME over $761 and through $4,586, plus
(c) 15 percent of his/her AIME over $4,586.
Once your PIA is determined, then they adjust for the age at which your retiring (early, middle, late, or really late).
Couple points -
1. Payout is HIGHLY progressive.
2. This is straight up retirement, there are NUMEROUS other benefits (survivors, disability, spousal, blah blah, blah).
3. Even if the payout is progressive, every dollar that a person has been taxed on gets credited to the account in the end.
He has suckled at the nipple of the Congressional mother most of his adult life, has a snazzy lifelong set of benefits and a pension, and hasn't had to live in reality for years - if he ever had to to begin with.
Anybody 'shocked' by the Fmr. Senator having this viewpoint should be taken out an publically mocked.
http://www.ssa.gov/pressoffice/pr/trustee10-pr.htm
http://www.youtube.com/watch?v=O_TjBNjc9Bo
From my comfortable desk in a very expensive office I see clear that your problem is "you are too lazy to work until death, so myself and a few like me can drive our Lexuses .
His ignorance goes hand to hand with Obama's.
http://www.ssa.gov/pressoffice/pr/trustee10-pr.htm
Talk about the Ultimate WS Cash Cow. Trillions delivered to them on a gold platter. Easy money and they won't even have to earn it the hard way.
Sheeesh! Will 'Muricans have to be living under bridges, freezing to dealth on grates and starving before they get it?
Either learn to speak the truth or silence yourself so you can stop being part of the problem.
It is a bit depressing to see how little comprehension of economics and mathematics there is on HP. No wonder the Chinese and Koreans are the only ones in Gifted and Talented math.
Next I'm going to have to tell you that smoking is bad for you and not to give you children too many sugary drinks.
Simpson has no real-world knowledge of what most seniors encounter. He's 79, receiving a generous Congressional pension and a deficit commission salary, has Cadillac health insurance coverage, and is no doubt cashing a Social Security check. We won't even go into "good deals" he may have gotten if he's a board member for any for-profit company.
I have often suggested that people who believe they owe nothing to the society that gives them health, wealth, and happiness should live somewhere else for a while where the benefits Americans enjoy are not available. Such as Waziristan, or the Congo.
He displayed a vulgar, misogynistic and totally irresponsible demanor and thought pattern in his tirade and he should be dismissed if he doesn't have the decency to resign, and let's face it, he doesn't have the decency to do so or he would have already done so.
I shudder when I think that there are individuals such as Simpson, who did suck at the teat of the government and taxpayers for so long, in so much as he received a handsome salary, free travel expenses, gifts of meals and travel from special interest groups, and special care and assistance throughout his career. He became so insulated from life that he does not understand, know, or care to know what the lives of so many Americans are like. He also is DRAWING A HANDSOME SENATE PENSION, several times what Social Security recipients receive, and he MADE NO CONTRIBUTION TO THAT PENSION, unlike the social security beneficiaries who did.
The man also receives social security, undoubtedly, and I am sure he cashes and spends that money.