President Obama's comments on Social Security privatization in the last week sound like something that he stole from the playbook of the last Democrat in the White House. Just as President Clinton tried to tell us that the veracity of one of his statements on the Lewinski affair depended on "what your definition of 'is' is," President Obama is telling us that he will stand up against Republican plans to privatize Social Security.
That is nice to hear, but it really is beside the point. President Bush did try to privatize Social Security in 2005 and, no doubt, many Republicans would still like to do so today, but privatization is not currently on the agenda of their leadership. The immediate threat to Social Security is plans to cut benefits by either changing the benefit formula and/or raising the retirement age.
This threat comes not just from the Republican Party, but from the top levels of the Democratic Party as well. Rep. Steny Hoyer, the majority leader in the House, explicitly called for raising the retirement age to 70 in a speech earlier this summer. Erskine Bowles, the co-chairman of the deficit commission appointed by President Obama, also explicitly said that cuts to Social Security would be on the agenda of the deficit commission. Of course, former Wyoming Sen. Alan Simpson, the Republican that President Obama appointed as the other co-chair of the commission, never misses an opportunity to say that he wants to cut Social Security.
It has become quite fashionable in elite policy circles to call for Social Security cuts like raising the retirement age. In fact, support for cutting Social Security is almost a requirement for being accepted as a serious person in places like the Washington Post opinion pages and other centers of elite opinion.
This is really bad policy. Thanks to the incompetent economic management of these same elites, the huge cohort of baby boomers at the edge of retirement will have little other than their Social Security to support them in retirement. The typical older baby boomer (ages 55 to 64) has about $180,000 in accumulated wealth, counting equity in their home. This would be roughly enough to pay off the mortgage on the median house, leaving them nothing other than their Social Security to live on in retirement.
The typical younger baby boomer (ages 45-54) has accumulated about $80,000 counting the equity in their home. This is roughly enough to pay off half of the mortgage on the median house.
There is no evidence that the elite Social Security cutters have any idea of the financial situation of those approaching retirement. They continually tout the idea of cutting benefits for the "affluent elderly." Unless we redefine the concept of "affluent" down by quite a bit (maybe to $50,000 a year), there are not enough affluent elderly for cuts to their Social Security benefits to make any difference either for Social Security's solvency or the unified government budget, which includes Social Security's finances.
The elite Social Security cutters also seem to have little clue about the sort of jobs most workers hold when they suggest raising the retirement age. While the Washington crew can probably hold their breakfast meetings and power lunches well into their 70s, nearly half of workers over age 58 work at jobs that are either physically demanding or involve difficult work conditions. To these people, the idea of working into their 70s isn't quite so cute.
It should also bother workers that plans to cut Social Security would take away benefits for which they have already paid. The Social Security trust fund has accumulated a surplus of more than $2.5 trillion. According to the report issued just last week by the Social Security trustees, the program can pay all future benefits through the year 2037 with no changes whatsoever. The workers who will be retiring in the next 15-20 years have paid for their benefits. They have every right to be furious if President Obama or anyone else suggests taking these benefits away from them.
So, the real question is: where does President Obama stand on the plans being put forward to cut Social Security? This should be on the table for all to see. We have an election in two and a half months. If Social Security cuts are on the table, then voters should have the right to know where their representatives in Congress stand. This would be one of the most important issues addressed by Congress. It would be an offense against democracy if it were not discussed in the election and voters given a chance to express their views.
The Republicans are right to attack President Obama for creating a false crusade against Social Security privatization. It's good to know that he's against it, but we don't need to know what his definition of "is" is. If he wants to defend Social Security, then he should speak up clearly against the real threats facing the program today.
Richard (RJ) Eskow: "310 Million Tits" -- If Simpson Doesn't Resign, the President Must Fire Him
He seems to think payroll taxes should be cut. That is taxes for Social Security and Medicare contributions, unemployment in some states, and the bulk of your Federal and State income tax.
Is he playing into the hands of the 'starve the beast' crowd, who want to keep as much money as possible from the government, so it can't pay for anything but war and research.
I would like to hear Baker's reasoning on cutting payroll taxes.
What is needed from the budgetary standpoint is higher taxes (the only question is when), and reduced spending. Given that untaxed funding for our middle east interventions are a large part of the cause of our financial woes, if you approach the budgetary problem logically, this is a key target for correction. Federal medical costs are also in crisis, given they have increased way faster than inflation for two decades, Part D legislation still forbids the goverment from negotiating rates, and non-competitive markets are still protected (by McClellan-Ferguson and drug anti-importation laws, among other things).
Republican politicians indicate they want to use our budgetary woes for their own political purposes, rather than solving our problems. President Obama has shown himself unable to directly and bluntly explain to the American people what are problems are. Good luck to us all.
How is it possibly wrong to point this out? If conservatives want to hate-monger on Social Security, let them officially go on record with it. Let their constitutents know what they REALLY want to do.
For those wealthy crybabies that complain that they will be paying more money than the poor, get over it. The rich already get all of the benefits of wealth, so do rich people really want to see poorer seniors starve to death because they can't afford to retire on the pittance of an income that many rich companies pay?
If I was rich, I wouldn't be able to sleep at night if the only method I had to obtain wealth, was to take money away from needy poorer people, who worked hard all of their lives.
Wealthy people need to grow a pair!!!!!!!! Let's have a country where ALL working Americans can retire with dignity. If you don't like my idea, you can always go to Somalia, where there is no government. That should turn on the Teabaggers.
There should be NO cap on FICA payments. With the cap, SS is a scam... a scam which benefits the wealthy.
Wake up people. The Democrats are just as anti-workers as the GOP.
Then raise it back up in 5 years. The money spent will return to the economy by almost 2 to 1.
For the younger people get your money out of the market and into protected tax free vehicles.