A video of retired Sen. Alan Simpson's foulmouthed rant toward activist Alex Lawson is making the Internet rounds, as well it should: The sheer audacity and rudeness of the guy makes this clip "must-see TV." It's a political bloopers reel (it can be seen at the bottom of this post).
But, while Simpson's outrageousness makes the video entertaining, here's what makes it important: Alan Simpson is one of two chairs of a bipartisan commission created by President Obama to study the Federal deficit. His comments reveal a number of very important things about his biases, his tendency to distort and mislead, and his ideological extremism. These traits are likely to taint the Commission's work - work which has great implications for the future.
Your future.
Simpson is the former Republican Senator from Wyoming, but those who hope that Simpson's biases will be offset by his Democratic counterpart are probably in for a big disappointment. As Robert Kuttner reports, Clinton Chief of Staff Erskine Bowles was finalizing a deal with New Gingrich to cut Social Security when the Monica Lewinsky scandal derailed their agreement.
Alan's one of the Wyoming Simpsons, although on this video he sounds more like one of the Springfield Simpsons. (D'oh!) Here's what his comments reveal, besides an irascible personality: That he wants to create a sense of crisis around Social Security, that raiding Social Security to pay for other government expenditures is perfectly fine with him ... even though he's supposedly a "small government" conservative, that he's entered an Orwellian world where cutting Social Security isn't really "cutting" it, and that he'll use absurd rhetorical games to defend his position. Jane Hamsher has the whole transcript, but here are the highlights.
The Shock Doctrine Without the Shock
Naomi Klein described the "shock doctrine," where conservatives use a crisis to force unpopular ideas on the public. There is no crisis where Social Security's concerned, but Simpson and other Commission members want us to think there is. That explains exchanges like this:
SIMPSON (regarding Social Security): It'll go broke in 2037.
LAWSON: What do you mean by 'broke'? Do you mean the surplus will go out and then it will only be able to pay 75% of its benefits?SIMPSON: Just listen to me instead of babbling ...
Simpson then goes on to affirm Lawson's statement (without apology, of course.) But he resumes the fearmongering a minute later:
SIMPSON: ... There is not enough in the system by the month ... to pay out what comes in. In other words there is more going out than coming in. That happened 3 or 4 weeks ago.
And, a few minutes later:
LAWSON: ... Social Security is separate, though, from the general budget, right? It's totally in the green.
SIMPSON: But it wasn't. Just four weeks ago, there wasn't as much coming in as going out.LAWSON: Except you're not calculating the interest paid on the bonds, because, if you do include that, it's still in the green this year.
SIMPSON: Well you can go through all the sophistry of babbling that you want to.
LAWSON: It's not sophistry. It's just what the SSA says. So I'm just going on the numbers.
Alex is absolutely right, and Simpson's the one engaging in sophistry (if by "sophistry" you mean, to use Simpson's word, "bulls**t.") If the interest is paid as agreed on those bonds, Social Security is still in the black. And if the government pays back what's it has taken out of the Social Security coffers, benefits can be paid in full until at least 2037. But about that borrowed money ...
Big Government Alan
It's fascinating to watch Simpson suddenly defend big government expenditures, even when (make that only when) people's own insurance payments - money they've paid to cover their retirement is borrowed and then left unpaid:
LAWSON: ... (W)hat about the $180 billion in surplus that (Social Security) brings in every year?
SIMPSON: There is no surplus in there. It's a bunch of IOUs.LAWSON: That's what I wanted to actually get at.
SIMPSON: Listen. Listen. It's 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been setup.
LAWSON: Two wars, tax cuts for the wealthy.
SIMPSON: Whatever, whatever. You pick your crap and I'll pick the real stuff. It has to do with the highway system, it was to run America. And those are IOUs in there. And now there is not enough coming in every month ...
Simpson's capable of mustering an eloquent defense of government spending when it suits his argument (although he opposes it when it's actually being proposed). And welching on an IOU sounds just fine to him, too.
We didn't cut your benefits! Now be quiet and eat your cat food!
SIMPSON: In the year 2037, instead of getting 100% of your check, you are going to get about 75% of your check. That's if you touch nothing. If you like that, fine. You'll be picking with the chickens yourself when you're 65.
So we want to take care, we're not cutting, we're not balancing the budget on the backs of senior citizens. That's bullshit. So you've got that one down. So as long as you've got those two things down, you can't play with anymore, that we're not balancing the budget of the United States on the backs of poor old seniors and we're not cutting anything, we're stabilizing the system.LAWSON: Thanks for being so frank. My question is: raising the retirement age, is actually an across-the-board benefit cut?
SIMPSON: There are 15 different options being discussed in here today, and why nail one of them...[inaudible]... if you would like to get one of them that pisses your people off.
LAWSON: Alice Rivlin was just on CNBC saying that that was one of the favorite methods.
SIMPSON: There are 15 of them in there.
I like the folksy "cutting with the chickens" line (although I don't know what the hell it means.) But this is the thinking: "we're not cutting , we're stabilizing." Expect to hear the word "stabilizing" used to mean "cutting" many times in the month to come - and expect your Social Security to be "stabilized" when it's time for you to retire if this ideology prevails.
Run that by me one more time?
Simpson asserts that Social Security wasn't originally intended to pay for people so far into retirement because life expectancy was low in 1935, when SSI was created. That's true ... but the program's been modified since then to adjust for increased life expectancy. That leads to this whopper:
LAWSON: ---(I)t's my understanding from actually looking at the 1983 commission (which revamped Social Security), they actually started prefunding the retirement of the baby boom by building up that huge surplus.
SIMPSON: They never knew there was a baby boom in '83.
Really? They didn't there was a baby boom ... in 1983?? They didn't know how many babies had been born in the years 1948-1964? Here's the real reason Alan Simpson says outrageously false things like that:
Read my lips: We're cutting your benefits so that we don't have to pay new taxes!
Here's the bottom line. Simpson doesn't want to force the government to pay those bonds back, because it will probably require new taxes to pay for them. The Commission's likely to recommend some new taxes, but the Simpson crowd wants those increases to be a small as possible. Here's an example of that ideology in action:
LAWSON: The government doesn't actually own the bonds, it's the government owing...
SIMPSON: Let me say things in a way so your fans will understand this, so you can go and be a hero. There is not enough in the system ... So, what do they do? They go to that trust fund and say, 'We need the IOUs out of it.' And they say, 'You can have them, but you have to pay for them' ...
Paying for them ... which means more taxes ... is exactly what Simpson and his comrades don't want.
There's more, and you should read/watch the whole thing, but that's the gist of it. It's frightening to consider the implications of Simpson's reaction - the fierceness, the ideological drive, and the closed-mindedness. Remember, his Commission has been entrusted with determining your financial future. That means your economic fate is in the hands of an angry ideologue ... and, for "balance," he's been partnered with somebody who worked with Newt Gingrich to try cutting Social Security.
As Alan Simpson might say, "@#)(@#*)(*@#)!!!!"
Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future. He also blogs at A Night Light. Richard can be reached at "rjeskow@ourfuture.org."
Website: Eskow and Associates
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
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Advocates of cutting Social Security benefits often argue ruefully that they wish that there was some other way to "save" the program. In fact, Social Security's currently strong finances could be sustained beyond a 75-year time horizon.
Someone should ask him how much of that he's willing to give up in favor of reducing the debt and balancing the budget.
I really don't want to get to 65, er, that's right, they moved the goal posts on me again, 67, or is it 70, and be left with nothing for something I've paid into all my life, just because a bunch of rich fu.c.ks didn't want to pay more taxes to pay back the money that the GOP stole from the Social Security Trust Fund to pay for wars, tax cuts for the rich, and corporate welfare.
2. Social Security is neither an insurance policy nor an annuity. FICA is simply a tax and OSDI is a benefit which Congress may legally alter or abolish at any time without regard to prior promises. Don't take my word for it - read what the Supreme Court had to say in Flemming vs. Nestor.
3. You can rail against the unfairness of it all but at the end of the day there's not enough money to pay for everything that's been promised. No amount of threats, protests or temper tantrums will make 2 + 2 suddenly equal 5.
There is not petty cash drawer sitting around with 2.5 trillion dollars in http://www.huffingtonpost.com/rj-eskow/simpsons-social-security_b_617841.html?show_comment_id=51096173#it.
A new fan
He then goes on to suggest that this is all a vast conspiracy of Republicans to get rid of SS. No Joe its simple accounting. This year (FEB as I recall) Social Security came up 29 Billion Dollars short in meeting its obligation to current recipients. Ok time for the trust fund right? U.S. Treasury debt is now $12.4 trillion— which includes $2.3 trillion of IOUs held by the Social Security Trust Fund. So when Social Security goes to redeem its IOUs and cover that $29 billion shortfall, it goes to the Treasury. Sadly, the Treasury is empty except for its tax revenue and whatever it can borrow. So the Treasury went out and had a T-Bill auction to raise cash to cover this unanticipated expense. This was a temporary problem and not the first time that its happened (happened before in the 80s which led to the last effort to reform SS (translation they increased the payroll tax rate).
Continued
Once again this requires actual money which the US Treasury has to come up with. This problem then continues (assuming we do nothing) until somewhere between 2037 and 2041 when all the "Trust Fund " bonds have been cashed in. As I say Joe this is simple accounting. If your outgo exceeds the revenue collection you have two choices. Increase revenues or decrease benefits (or a combination of both). Basically Joe those T-Bills are worthless unless the Treasury comes up with the money to redeem them. Same would be true of those ones held by China and Japan and England etc etc etc. Right now there is about 3.8 Trillion dollars of T-Bills held by foreign governments. As long as those folks all play nice and hold on to their paper and/or redeem it an orderly fashion (and of course continue to buy more paper) all will be great. However if they all suddenly lost faith in the "full faith of the US Government" line and demanded their money we would be in a world of do do. The projections about the SS system of course are just guesses and revenues could magically increase. Bottom line is that Simpson is right. Its all just pieces of paper.
The US Treasury can borrow all the money it needs from the Federal Reserve Bank (Fed). That's where the Congress gets its money the run wars and fund national emergencies.
The US Treasury may be $17 trillion in debt, but it can borrow money from the fiat money machine the Federal Reserve Bank ad infinitum.
It's shocking that a blogger of your financial knowledge did not know this simple fact?
For the third and last time, read, "The Plot Against the Social Security" by LA TImes Editor, Michael Hiltzik, and get the inside story about how and why your Republican Party
tries to destroy the SSS every year ever since FDR created it, and failed.
For the record Joe I have read the editorial and user reviews of Mr Hitzik's book so I get the basic concept of a book that he wrote in 2005 to try and argue against 'W''s plan to give us all "private" SS accounts. I get it JOE. I was against W then and I would be against anyone who suggested a similar idea now. Its not your ideas that I find so troubling Joe its that you are so fast and loose with and facts in a time when we have access to incredible resources at our finger tips. I keep asking you to cite some actual source for any of your numbers (besides what you say this guy wrote in his holy grail like book) and you simply cant do it.
Every year an employee contributes 6.2 % of his whole paycheck to the SSS, the Employer has to contribute matching funds to the Social Security System (SSS).
For a company that employs thousands or millions of workers like Halliburton, this adds up to billions of the Employers matching funds.
If the corporations can kill the SSS by any means, they will save half of the 1.8 Trillion annually that comes into the US Treasury on an average prosperous year, i. e, $900 billion a year.
2. ideologically, it offends them to contribute anything at all.
3. if they had a trillion dollars and you had a nickel, they would stay up all night figuring out ways to get your nickel.
The Great Depression was prolonged from 1929 into 1937 because the Federal Reserve Bank (Fed) held back loans when the economy began to improve.
The Federal Reserve Bank is doing the same strategy today by once again holding back loans for small businesses that would begin employing workers and pulling us out of this Great Depression.
The Fed is prolonging the depression to help the Republicans in the mid term 2012 elections.
The FED controls our politics at the devastating cost of our economy.
WTF do we refuse to see the proof when the whole insidious strategy of the Fed is in our historical records.
How often does a husband have to commit infidelity before the wife decides to divorce?
A radical betrayal of social security by both parties--- the new status quo...Qui bono?
The Greenspan Reagan solution in 1983 was to prefund by applying the FICA tax to 90% of the wage base. Today, due to inflation, the tax applies to 80% of the wage base. Raise it again to 90% and the problem goes away.
Raising the reitrement age must be out of the question. How long can a person be expected to work in a lifetime? Who will hire someone at 64 or 67 or 69? And it is legal to discrminate on age after 65.
Want to see senior poverty in this country again? Unemployment, no defined pension, 401K subject to market whim, now work until 70?
If 65 is too young to retire then why do we let people retire at 62, with a smaller benefit?
And then tell me, that in 1983, nobody knew that there was a baby boom...
And then tell me that you believe in the Tooth Fairy, Trickle Down economics AND a FREE MARKET where Warren just happens to sell billlions in Moodys stocks in the week after they received the Wells letter from the SEC......
And cut it with the "little preppy boy" and "little ones" posturing. It reminds me of Simpson - a windbag full of braggadocio, utterly reliant on better people's restraint.
See that little red sliver? The one labeled Corporate Income Tax?
The one that says 7%.
It seems to me that the answer to funding Social Security and Medicare is clear.
Since corporations are doing everything possible to avoid any responsibility to either their workers or this country, we should adjust the dial.
Our politicians created a contract with the American people when they added Social Security and other payroll taxes.
They need to honor that contract.
We, The People, pay for the government. We, The People, should own it.
We, the People, need to remove anyone from government who is not committed to Our interests.
Of course, let's charge the corporations more so they can charge you more! That way you won't realize that you've been hit with a huge tax increase! And you can laugh at how you screwed those rotten corporations as you complain about those higher prices!
He is not open to others' ideas. He is only there to pursue a pre-determined agenda. Thus he will have no constructive input and provide no useful ideas -- he's dead wood.
His boorish behavior means he can't interact well on a team. He'll poison the atmosphere and damage cooperation.
He does not know, or lies about, basic information relevant to this task.
We need someone who is open-minded and creative, who can work well with others, and who is knowledgeable about the economy.
Show me the stats on the life spans by quintile in this country and you will see that the bottom 10% have about a zero percent chance of collecting ANY Social Security or Medicare....
Social Security System (SSS) It is workman's Compensation program paid for and administered from contributions made by Middle Class Working Citizens.
The SSS brings in 1.8 Trillion Annually depending on the employment for that year. Approximately One Trillion is paid out to beneficiaries; the SS Surplus of Eight Trillion is borrowed by the US Treasury to Run wars and Pay the Interest to the Federal Reserve Bank (Fed), for the fiat dollars they Loans the US Treasury.
The US Treasury buys the Fiat Dollars from the Fed with USA Treasury Bonds (T-Bills)
These T-Bills are sold on the open market by the Fed at a conservative interest rate that varies between 2.5% and 3.5%. guaranteed by the USA.
After the SSS, China holds the largest amount of these T-Bill; some $5.6 Trillion); the SSS holds $6.8 Trillion as of 2000. "The Plot Against the Social Security", by Michael Hiltzig.
President Lyndin Johnson in 1965 had Congress 'Unify" the SSS contributions together with the US Revenues to subsidize his Vietnam Surge into North Vietnam without the knowledge of the people, and he set a precedent for future Presidents.
Today in the red brick building, Federal Building of National Dept, in W. Virginia there is file with $6.5 Trillion as of 2000 in T-Bills put aside for the Baby Boomers; but they will have to fight to get these rightful trillions for their retirement.
Social Security tax revenues (OASI) for 2008 including interest were 695 Billion and the outlay was 516 Billion resulting in a surplus of about 180 Billion. SO I dont know where you dreamed up the numbers you posted but they are not accurate. The balance sheet for the SS Trust fund at the end of 2008 was 2.2 Trillion dollars.
The Disability Insurance (DI) portion of the tax had income of 109 Billion in 2008 and an outlay of 109 Billion resulting in a balance of 215 Billion dollars.
Dont know where this Michael Hiltzig gets his numbers (assuming you quoting him accurately ) but he needs to do a little better research.