In the deficit hysteria now sweeping Washington, Social Security has emerged in the bull's eye as a target for cuts. Republican House Minority leader, the perpetually tanned John Boehner, called for hiking the retirement age to 70. Democratic House Majority whip, wrong-way Steny Hoyer argued for hiking it to 69. Various proposals float to change the cost of living adjustments to lower benefits substantially over time.
And kicking the old, the disabled, the widowed now is elevated into a machismo measure of credibility on reducing the debt. In a Times column on tension between Obama and the business community, former Clintonista Roger Altman, a Democratic financier argues that Obama must overcome business "skepticism" about his "commitment to reducing the huge and dangerous budget deficits" by "undertaking the difficult task of trying to fix Social Security."
The clownish former Republican Senator Alan Simpson, now ensconced as co-chair of the president's deficit commission, characteristically adds salt:
"You have two [sic] choices...you either raise the payroll tax or decrease the benefits or start affluence testing. The rest of it is B.S. And if the people are really ingesting B.S. all day long, their grandchildren will be picking grit with the chickens. This country is gonna go to the bow-wows unless we deal with entitlements, Social Security and Medicare."
Simpson's animus towards "greedy geezers" and Social Security is infamous. More importantly, the influential liberal John Podesta, head of the Center for American Progress and close advisor to the president, endorses the same "credibility" test. He agrees that the long term Social Security imbalances are not "a main driver of long term federal deficits," and that "any reasonable reforms will have virtually no impact on the 2015 fiscal picture." But, he writes, "reforms could starkly demonstrate to skeptical debt markets that the US is willing to take on a politically difficult fiscal issue."
Social Security isn't a problem and "fixing" it will have "virtually no impact" on long term deficits, but cutting the modest guaranteed insurance payments for the elderly and the disabled will show bankers we mean business.
Now this makes no sense in policy, politics or morality. Social Security works. It is America's great family protection program, insuring that workers can retire with some dignity out of poverty, helping to insure that parents are not a burden on their children, insuring against disability or the sudden loss of a mate.
It isn't lavish by any means. The average benefit is little over $1000 a month. Yet it is the largest source of retirement income. Only half of married couples and one-third of single women have any income from pensions or annuities other than Social Security.
Moreover, Social Security is financially the most solvent of any government program. It is in surplus now and will remain so until 2016. The trust fund that has been built up by boomers "pre-funding" their retirements won't be exhausted until 2037. In the long term, Social Security adds a negligible amount (less than 1 percent of GDP) to current projections of soaring national debt, which are driven overwhelmingly by soaring health care costs. (If the US spent the same per capita as other industrial nations that have better health care results, we'd be looking at surpluses as far as the eye can see, not deficits).
Social Security isn't broke; there is no need to "fix" it.
The public overwhelmingly believes Social Security is important. As a USA Today/Gallup poll showed once more, Americans oppose raising the retirement age or cutting benefits. The only reform proposals to gain majority support are lifting the cap on the payroll tax so that folks who make over 106,800 a year pay the same rate as everyone else and paring back benefits for the wealthy.
But the campaign against Social Security has succeeded in scaring the bejesus out of folks. The same USA Today poll shows that six of 10 non-retirees don't believe Social Security will be able to pay them a benefit when they stop working, as do fully ¾ of those 18 to 34. Even a majority of current retirees are terrorized, with a majority believing their current benefits will be cut.
Consider this the culmination of the decade long campaign by billionaire Pete Peterson and others to target Social Security and America's relatively modest entitlement programs. It's Peterson's fondest strategic dream come true. Build hysteria about deficits. Convince people that Social Security is going bankrupt and won't be there for them. Step in and claim to be "saving" Social Security by raising the retirement age and cutting benefits over time. Emerge a hero to the very seniors and disabled that you are skewering. It is not for nothing that Herman Melville's Confidence Man is an American classic.
What can stop this juggernaut aimed at the old and the disabled? We can. We can challenge the lies, rouse people to understand the sham, strengthen Social Security, and focus reform on what is broken -- our health care system, our bloated military budget, our regressive tax system, our feckless trade and industrial policies.
Already folks are organizing to challenge the attack on Social Security. The Campaign for America's Future, which I co-direct, has joined with 50 other organizations (and growing) representing 35 million Americans to form a coalition. Its purpose is expressed in its title: Strengthen Social Security, and its tag line: don't cut it. The formal launch will come later this month, but a web site is already up and running. The initial members of the Coalition are here. The seven principles that they sign onto are here. And on the site, you find a remarkable YouTube video that deftly lays out the facts on Social Security with clarity and humor. It is worth a watch.
On Thursday this week at Netroots Nation in Las Vegas, I'll join a panel led by Nancy Altman, co-director of Social Security Works, and chair of the Pension Rights Center board. We'll be inviting the bloggers across the country to help fend off the assault on Social Security, and join the debate about priorities over the next years. Also on the panel will be Laura Clawson, a contributing editor of the Daily Kos, and Eric Kingson, the co-director of Social Security Works.
This country has big decisions to make in the months and years ahead. We've still got a long way to go to get people back to work and to get this economy going. We've got to build a strong foundation for a new economy that will provide shared prosperity and rebuild a broad middle class. We need to address global warming -- and capture a leading role in the green industrial revolution that will transform our lives. Fix our broken health care system whose soaring costs will be unaffordable for businesses, families or government and get our budgets back in order. Redress our growing domestic public investment deficit -- in basic infrastructure like sewers, roads, an efficient electric grid, in education and training, in research and development. Balance our trade, and revive manufacturing in America. End two wars and stop spending as much as the rest of the world combined on our military budget. Clean up our politics, curb the influence of money, and reform the dysfunctional Senate. Empower workers and fix our broken immigration system. The daunting check list can go on.
But one thing we don't need. We don't need politicians demonstrating their "credibility" by kicking the elderly and the disabled. We don't need to fix a Social Security program that isn't broken. The best "fix" for Social Security is simply to tell the truth about it.
Follow Robert L. Borosage on Twitter: www.twitter.com/borosage
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They need to take a look at the "birth tourism phenomenon' also----allowing birth mothers to get into the US and have an "American citizen"---later eligible for benefits and family sponsoring abilities. Travel offices in countries as diverse as S. Korea and Turkey are selling trips to the US---just for this purpose, Of course, they can claim that they are going "shopping." Sure,,,shopping for future US benefits.
Stop these entitlement giveaways now! Some are overly generous giveaways begun under "Family Reunification" policies from Ted Kennedy. They may not come out of the SS Trust, but the US taxpayers still have to pay for them.
Can't reply directly so I'm sticking it here.
"The folks who came up with that number project our 7 trillion hole in ....2080"
So what you're saying is, since I'm getting my check now, everything is just peachy. Future generations? Well...tough luck. Sucks to be them. But you want to get yours. You're entitled. You've worked hard all your life, you've paid into the system. You DESERVE it. As if you're kids don't. And here I was thinking only Republicans were greedy and heartless. You have proven you are no different.
The $7 trillion is arrived at using something called "Generally Accepted Accounting Principles", aka GAAP. Google it sometimes. All corporations are required to report their results in accordance with that standard. It requires that the present value of certain future income and obligations (for example, pension liabilities) are reported on the balance sheet. But you feel that such reporting requirement is a waste of time, because "things can change a lot in 70 years". Well yes, they can. They can change for the worse too, not just for the better.
And you still have not addressed Medicare. That's a $45 trillion hole.
The co-chairmen of President Obama's debt and deficit commission offered an ominous assessment of the nation's fiscal future here Sunday, calling current budgetary trends a cancer "that will destroy the country from within" unless checked by tough action in Washington.
Bowles said that unlike the current economic crisis, which was largely unforeseen before it hit in fall 2008, the coming fiscal calamity is staring the country in the face. "This one is as clear as a bell," he said. "This debt is like a cancer."
"We can't grow our way out of this," Bowles said. "We could have decades of double-digit growth and not grow our way out of this enormous debt problem. We can't tax our way out. . . . The reality is we've got to do exactly what you all do every day as governors. We've got to cut spending or increase revenues or do some combination of that."
Thanks to the Clinton administration, Glass-Steagall was repealed in '99 and because of that Wall Street has destroyed any 'capital formation' in this country and used bank deposits as gambling chips.
Now he wants to make sure that Wall Street gets away with the crime by not 'clawbacks' of bankster bail outs, but MASSIVE MASSIVE AUSTERITY CUTS to the elderly, sick and disabled.
Had Billl Clinton never been president, we would have Glass-Steagall and we would've never heard of thisguy, Bowles.
Wall Street and the banksters must go through RECEIVERSHIP and bankruptcy re-organization and long-term credit must become SOVEREIGN again to put people back to work in productive jobs that wil support vital social programs like social security.
Austerity is not the answer
Bankruptcy re-organization = answer
Not even close. They are fully paid for by the money coming in specifically for that purpose. That is why they are **entitlements**. People are **entitled** to get the benefit they purchased.
Our discretionary spending is what is out of control. Wars. TARP. Pork. Corn Subsidies even.
The DISCRETIONARY stuff. That is where we have legislators gone wild. The only problem the entitlements have is the discretionary people borrowing money from them and trying to get out of paying it back.
We said DON'T BAIL OUT WALL STREET!!!!!
...because it will crowd out the 'deficit spending' needed for vital social programs.
Did anyone listen? NO!!!!
CNBS laughed at you SUCKERS as you, the taxpayer, handed over your precious future to Warren Buffet, who just bought big time shares of Goldman Sachs right before the bail outs of AIG.
Oh yea, you've been had, BAMBOOZLED by WALL STREET and YOU LOVE IITTTTTT!!!!!!
YOU THINK IT'S CUTE-N-FUNNY TO BE HOODWINKED BY THESE CLOWNS!!!!
Enjoy the bail outs my fellow Americans, enjoy, and put a big fat picture, on your wall, of Warren Buffet, the god Rush Limbaugh and Larry Summers told you to idolize.
While George Soros jets back to a private island somewhere in the Carribean, your grandma will be shopping around for cat food, so Soros can enjoy the BAIL OUT MONEY - HAAAHAAAA LMAO!!!
The real issue here is wealth concentration. Do we really want to continue or indeed add to laws that concentrate wealth in fewer and fewer hands? Where do the rest of us end up when they pack up their $Trillions in gold and move to greener pastures? The super wealthy are not loyal to this country, but only to their cash hoard. I don't expect a perfect balance, but we need a concerted push to move the majority of this country's wealth back to the middle class. Seventy years ago, we learned a horrible lesson about Fascism. Do we really need to repeat it here? Isn't it time to end Country Club Socialism, where the wealthy are made whole when their schemes fail?
The fact that our retirement age was set at 65 provided a goal to work for, and retirees increasingly got to enjoy retirement , raising the age doesn't just cut benefits to those who finally reach that age but eliminates all those who die before then.This will provide an even bigger pool of money to be raided and funneled to those same few,powerful and rich whose greed knows no bounds.
Here's the skinny on Peterson. He has his---billions! He's afraid that if SS is not cut it will bankrupt America, the dollar will become the next deutchmark and all his billions will go up in a puff of smoke. Why hurt his good buddies in MIC with cutbacks in arms when the Fed can cut back on the poor, the disabled, and the old. Peterson doesn't give a damn about fixing the system; he just cares about preserving his fortune and to hell with everyone else. A swine of the lowest order.
http://www.nytimes.com/2010/03/25/business/economy/25social.html?_r=1
As someone already pointed out, bringing SS back into actuarial balance would take about 2% of payroll. Doesn't seem much, but that's about a $100 billion every year, about .7% of GDP. That's noticeable and will result in less spending and/or less investment. Medicare is in far worse shape, to bring that into actuarial balance would be nothing short of catastrophic for GDP, and jobs. So fixing these problems will involve less spending and more saving/investment on the part of Americans.
But that's what happens when a country spends itself into bankruptcy. Claiming otherwise is tantamount to rejecting the laws of mathematics.
Social Security will have to tap in and redeem some of it's special Treasury bonds to make up the difference from the lack of CURRENT revenues to pay CURRENT benefits, due largely to a Republican fueled economic melt down and drop in Social Security tax collections. The actual trust fund balance of the special Treasury bonds that Social Security holds, is in surplus and will be for several years to come. Social Security is not broke. Of course, Republicans don't want to have to make good on the bonds, whose receipts they spent on war, corporate welfare, and tax cuts for the wealthy.
As for Social Security's long term actuarial problem, only minor tweaks are needed to keep in solvent for the foreseeable future.
I said: "Social Security will pay out more than it takes in this year. "
NYT Said: "This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016"
Well, that's what I said, nothing more. I didn't say that the "fund" itself was in a negative balance. Next time, read CAREFULLY what people write before accusing them of "misrepresenting" the facts. What I said in my prior posts is that the PRESENT VALUE of net forward liabilities is in a negative balance.
You claim: "due largely to a Republican fueled economic melt down"
Really? It was the Democrats who refused to fix the likes of Fannie and Freddie when they had a chance. They refused to even recognize they were a problem.
http://www.youtube.com/watch?v=_MGT_cSi7Rs
If you'd only do five minutes of research you would come to the realization that this mess is a bipartisan creation. Try to look up the names of the clowns that pushed for Glass-Steagall to be repealed. I bet you find plenty of Dems and Repubs.
And $100 BILLION+ per year is not a minor tweak. And that assumes the forecasts for GDP growth come true. I also note you're silence on Medicare.
On the other hand, if the securities were indeed marketable Treasury bonds, they could simply sell them in the open market. Treasury would not have to issue new debt to pay for it.
What we are seeing is an all out class war by the Republicans against working people and the poor and in favor of the haves and have mores.
THERE IS A CLASS WAR GOING ON AND THE RICH ARE WINNING!!!!!
No, it's not so much that anybody cares about deficits - that's just a smoke screen, a talking point.
But in this country, a chance to take out our collective frustrations and anger out on the weak and defenseless is a tradition dating back to Jamestown.
How do I know this tradition continues to this day? The existance of the Republican party and the behavior of the main stream media. It should be obvious to any reasonable person.
That said, the Republicans and conservatives have made an art-form out getting the population to vote away their best interests. Machiavellian manipulation at it's best.
It's a chicken and egg thing when it comes to our representatives in DC. Which came first? The voters electing people they know will go to Washington and "stick it to the next guy" for them, do the dirty work by proxy so that we all can keep our hands clean, or the voters being conitnuously "duped" by ethically shallow politicians who appear to be the salt of the earth but when they get to the seat of power are immediately corrupted?
I ten to choose the former rather than the latter. I cannot believe that people are gullible in the same exact way a million times in a row. The cliche is that it's bad to have a two party system, not true democracy. But a two party system makes voting easier in a way, people KNOW what they're getting from the GOP, yet they go back to them because their blind hate and lust for vengence against "someone else" trumps what may be good for them and their children.
get the dvd at secretofoz.com and then read Web of Debt, the author, Ellen Brown has several articles on HP