“A Manufactured Crises”: Republicans Want You To Think Social Security Has A Funding Problem. Don’t Believe Them
The ongoing Republican plot to cut Social Security is shaping up to be a major story. As Dylan Scott has documented at Talking Points Memo, through a totally unnecessary change in accounting rules, Republicans are trying to ensure Social Security Disability Insurance (SSDI) runs short of money in less than two years, which would require a one-fifth cut in benefits.
Most recently, there are hints that Republicans may top up the SSDI fund by merely a little bit, similar to what they have done with the debt ceiling. The point is to create a series of manufactured crises, and each time the SSDI program runs short of money, they can use their leverage to ratchet down Social Security as a whole.
The way Republicans spin all this will be critical. Social Security is very popular, so conservatives will have to avoid the perception that they want to cut it, even though they clearly do. Dispelling their squid-ink nonsense will be crucial in protecting the program.
At National Review, Veronique de Rugy gives us a taste of how conservatives will frame their argument for cuts. “We’re broke,” says the headline. The SSDI fund “will be empty in a year” (no mention why), and “we can’t ignore the issue for much longer.” Regular Social Security “is also on an unsustainable path.”
She links to a report by Chuck Blahous, an argument against patching up the SSDI fund with money from general Social Security funds. Regular Social Security “now faces a bigger shortfall in both absolute and relative terms than [SSDI]” over the next 75 years, he says, concluding it would be irresponsible to transfer money to the less-solvent program.
What he doesn’t mention is that the regular Social Security fund won’t come up short until 2034. Plugging the holes in SSDI would advance that date by only about one year, since SSDI is only a small fraction of the overall program. In this country, having some 18 years of breathing space for a government program counts as nearly miraculous.
This complicated talk of actuarial shortfalls and inescapable accounting burdens is meant to obscure the fact that this is a question of ideology, nothing more. Social Security, in contrast to the dread Big Government bureaucracies, is a very simple program that takes in money and kicks it back out again. If the revenue source is insufficient, we could find money someplace else.
The actual worry here, just like any spending program, is whether the cost of the program is getting out of line with the productive capacity of the rest of the economy. All retirement programs take from the currently working and give to the non-working, so we might worry that the elderly and disabled are getting more claims on stuff than the economy can churn out.
Fortunately, as Dean Baker always points out, continuing economic growth keeps expanding our capacity to provide benefits. We can easily “afford” to maintain or expand Social Security, if we want to.
It would be easy to find such money. Indeed, we don’t even have to leave the world of retirement policy! We could simply scrap the 401(k) tax credit, which does not work as advertised to increase savings and sends the vast majority of its benefits to the rich. We could then plow the savings into Social Security. The 401(k) credit and similar programs cost something like $100 billion yearly, as compared to the total cost of Social Security of about $820 billion. Hey presto, we’re done.
The underlying reality is that opinions on any spending program inescapably rest on a judgment about whether that spending is worthwhile. I believe Social Security is excellent policy and its benefits should be increased. Conservatives like de Rugy and Blahous believe benefits are too high and should be reduced. It’s as simple as that.
By: Ryan Cooper, The Week, January 26, 2015
“Tea Party Spawns GOP Nightmare”: How It’s Already Ruining The Party’s ’16 Strategy
If you’re understandably perplexed by the Republican Party’s apparent decision to enter the post-Obama era by nominating either another member of the Bush dynasty, or another version of Mitt Romney, there’s at least one way to think about it that might help explain the seemingly inexplicable. Put simply, the leaders of the GOP, the people who tend to be referred to as “the establishment,” fervently believe that in order to win in 2016, Republicans will have to convince voters that the party is once again what it was for much of the 20th century: safe, staid and, in a word, boring.
Of course, in a perfect world, Republicans would rather their presidential candidate be seen as a charismatic dynamo similar to Barack Obama in 2008 (or Ronald Reagan in the final weeks before Election Day 1980). But Republicans like Senate Majority Leader Mitch McConnell, the party’s de facto chief strategist, would likely consider a GOP nominee who reminds voters of a suburban accountant nearly as good — especially after eight years of tumult under a Democratic president. Thus the appeal of your Jeb Bushes and Mitt Romneys — and thus the establishment’s aversion to more fire-breathing types like Sens. Rand Paul and Ted Cruz.
The plan is obviously cynical, but it’s also pretty savvy. It’s a testament to not only how much attention the party leaders pay to controlling the media narrative, but also how little they pay to, y’know, actual policy. And if all the GOP had to do between now and November ’16 is keep troublemakers like Paul, Cruz and Mike Huckabee at a distance from the party’s nomination, you’d have to consider it in a strong position to win back the White House, on the strength of voter fatigue with the Democrats, if nothing else.
But here’s the problem: There’s this thing called Congress, which is now the full responsibility of the GOP. And while there are plenty of GOPers in Congress who care deeply about which party holds 1600 Pennsylvania, there are also more than a few who think they were elected to change Washington. They answer to conservative activists who will no longer trim their sails so a RINO can enjoy free flights on Air Force One. And some of the issues these folks want to talk about won’t jibe with that nice accountant-next-door narrative establishment Republicans have been building.
You could make an argument that this barely subterranean point of tension was brought closer to the surface on Day 1 of the new Congress, when the GOP decided to kick off a multi-part plan to manufacture a fiscal crisis for Social Security in order to, ultimately, push through benefit cuts to what is arguably the most popular government program in U.S. history. But you’d be on even firmer ground if you just focused on what the GOP’s been up to in the past week. Take the vote in the House on Thursday to drastically curtail federal funding for abortions (which is already paltry), which passed more or less on a party-line vote, and which the White House has already said it will veto if it ever reaches Obama’s desk. Symbolic and envelope-pushing measures intended to inspire a big fight over the right to choose is the kind of stuff that thrills the Tea Party, needless to say; but it’s not what you’d expect to hear from that nice accountant next door. And that goes double for weird and recurring ontological conversations about the definition of rape.
Or if you’d rather look at the Senate, where the aforementioned McConnell is nominally in control, think about Wednesday’s vote on climate change — namely, whether it exists and, if so, to what degree it’s humanity’s fault. While it’s true that only one senator, Mississippi’s Roger Wicker, felt compelled to disagree with the contention that the Earth’s climate is warming, most Republicans voted against a provision that would credit humankind with “significantly” contributing to the problem. That is, needless to say, wildly at odds with scientific consensus across the globe; and dismissing the conclusions of essentially all of the world’s qualified scientists is yet another thing your nice neighbor-accountant would be unlikely to do.
To be fair, the Senate vote on climate change wasn’t something Republicans in the Senate forced on McConnell. Instead, it was an example of the kind of thumb-in-the-eye procedural move that the Senate’s now-minority Democrats will be able to pull off every once in a while that has no legislative significance but can, at its best, make the difference between the parties crystal clear. All the same, whatever short-term damage Democrats were able to inflict on the GOP paled in comparison to that which it brought on itself, in the form of Oklahoma Sen. James Inhofe’s contention that those who think anthropogenic climate change is a reality are disrespecting God. Which is, again, not the kind of talk the GOP establishment wants to hear during this current, boring-is-best rebrand.
Now, the chances of anyone remembering any of these stories a few years from now are admittedly rather slim. So the point isn’t to say that Republicans won’t be able to succeed in 2016 because of one of the countless nutty things Inhofe’s said. What these stories underline, though, is that GOP leadership is going to find, for the umpteenth time in recent years, that persuading voters who’ve come to associate Republicans with the Tea Party that the days of Eisenhower and George H.W. Bush have returned will be much easier said than done.
Indeed, it’s a safe bet that the sentiment behind this Thursday quote from Republican congressman Charlie Dent, a relative moderate, will be echoed more than a few times by the GOP establishment between now and the next presidential election: ”Week one, we had a Speaker election that didn’t go as well as a lot of us would have liked. Week two, we spent a lot of time talking about deporting children, a conversation a lot of us didn’t want to have. Week three, we’re debating reportable rape and incest — again, not an issue a lot of us wanted to have a conversation about. I just can’t wait for week four.”
By: Elias Isquith, Salon, January 23, 2015
“Absurdity Of The Argument Is It’s Greatest Strength”: Republicans Know Their Obamacare Case Is Bogus; Here’s The Proof
On Thursday, the government filed its brief to the Supreme Court in the case that will determine whether Obamacare subsidies disappear in three dozen states. Its argument is comprehensive, but one part of it speaks directly to the political history of the law, and the fact that everybody, including Republicans in Congress who now claim out of convenience that the law plainly limits subsidies to states that set up their own exchanges, always understood it to authorize subsidies everywhere.
The government confines this part of its argument to the legislative debate in the run up to the law’s passage in early 2010, but it could make the point more succinctly (and perhaps convincingly) by fast forwarding to early 2011. These days, Republicans up to and including Senate Majority Leader Mitch McConnell confidently pronounce that “the language of the law says … subsidies are only available for states that set up state exchanges.” But that’s not what they believed four years ago.
When Republicans took over the House in 2011, the political environment in Congress changed dramatically. Obamacare couldn’t be repealed, but it became fair game for damaging modifications, and the GOP took aim at it and other domestic spending programs whenever opportunities to offset the cost of new legislation arose. One of the first things Congress did back then was eliminate an Affordable Care Act provision that would have significantly expanded the number of expenses businesses are required to report to the IRS. Even before the law passed, business associations were livid about the “1099” requirement, and created such an uproar over it that the question quickly became how, not if, it would be repealed. Even Democrats wanted it gone.
The only problem was that the reporting requirement was expected to raise over $20 billion. Under GOP rule, it could only be offset with spending cuts elsewhere in the budget. As it happens, they found those spending cuts elsewhere in the ACA itself. Specifically, Republicans paid for repealing the 1099 provision by subjecting ACA beneficiaries to stricter rules regarding when they have to reimburse the government for subsidy overpayments. Make more money than you anticipated, and the government will claw back your premium assistance come tax season.
The congressional budget office scored the plan as essentially deficit neutral, and Republicans voted for it overwhelmingly. But you see the problem here. If the ACA plainly prohibits subsidies in states that didn’t set up their own exchanges, then there would be no subsidies in those states to claw back. And by April 2011, when the clawback passed, we already knew that multiple states were planning to protest ACA implementation and let the federal government set up their exchanges, including giant states like Florida, which now has a million beneficiaries. They would have needed a different, or additional, pay-for.
Obamacare’s legal challengers might chime in here to insist that their case is impervious to revelations like these. CBO’s analyses were premised on the idea that every state would set up its own exchange, and Republicans (and many Democrats) based their votes on what CBO told them. Other Democrats who actually understood the scheme may have simply pretended not to notice the problem. Nevertheless, they’d say, the law was designed to withhold subsidies from people whose states didn’t establish exchanges, and to ruin the individual and small-group insurance markets in those states, without providing any notice to either. In a perverse way, the absurdity of the challengers’ argument is it’s greatest strength. Because the scheme they insist Congress intentionally created was so far from Congress’ mind, it’s hard to find contemporaneous evidence that Congress absolutely didn’t mean to condition these subsidies. In much the same way, we can’t be sure that Congress didn’t mean to denominate those subsidies in Canadian dollars. A $ isn’t necessarily a $ after all.
But this familiar line of defense crumbles here. It is facially plausible—though incorrect—to posit that at the time the law passed, CBO believed subsidies would be available everywhere because it simply assumed every state would set up an exchange. But that assumption didn’t hold in April 2011. Something else must explain CBO’s 1099-repeal score, and the Republican votes that followed it. What we have in the form of this bill is clear evidence that everyone who voted for it (including every single Republican, save the two GOP congressmen and one GOP senator who weren’t present) understood the Affordable Care Act to provide subsidies everywhere.
Congress repealed the 1099 provision at an important moment—after multiple states announced that they would step back and let the federal government establish their exchanges, but before the IRS issued its proposed rule stipulating that subsidies would be available on both exchanges. The only thing Congress had to go on when it stiffened the clawback mechanism was its own reading of the Affordable Care Act, and Congress behaved exactly as you would expect. It operated with the understanding that subsidies were universal.
Today, many Republicans will tell you that the law plainly forecloses subsidies through the federal exchange. Six senators—John Cornyn, Ted Cruz, Orrin Hatch, Mike Lee, Rob Portman, and Marco Rubio—and nine congressmen—Marsha Blackburn, Dave Camp, Randy Hultgren, Darrell Issa, Pete Olson, Joe Pitts, Pete Roskam, Paul Ryan and Fred Upton—have even filed an amicus brief with the Supreme Court, which begins, “The plain text of the ACA reflects a specific choice by Congress to make health insurance premium subsidies available only to those who purchase insurance from ‘an Exchange established by the State….’ The IRS flouted this unambiguous statutory limitation, promulgating regulations that make subsidies available for insurance purchased not only through exchanges established by the States but also through exchanges established by the federal government.”
All of them, save Cruz, who was elected in 2012, voted for 1099 repeal.
In its brief, the government argues that “it was well understood that the Act gave ‘States the choice to participate in the exchanges themselves or, if they do not choose to do so, to allow the Federal Government to set up the exchanges.’ And it was abundantly clear that some States would not establish their own Exchanges.“ It was more than well understood. Congress actually endorsed that very proposition.
By: Brian Beutler, The New Republic, January 23, 2015
“Catering To A Small Minority Of Voters”: Don’t Be Fooled; Republicans Are Still As Extreme On Abortion As Ever
A group of Republican men took to the House floor on Wednesday evening and delivered emotional speeches about the need to restrict women’s right to abortion. “A deeply personal issue,” Utah representative Chris Smith noted without a trace of irony, before musing on the pleasures of being a grandfather. Ted Yoho of Florida likened fetuses to an endangered species. “How can we as a nation have laws that protect the sea turtle or bald eagle, but yet refuse to protect the same of our own species?” he asked.
Their speeches anticipated a vote on the so-called Pain-Capable Unborn Child Protection Act, which would ban most abortions after twenty weeks of pregnancy. Originally scheduled for Thursday, the vote has now been indefinitely “delayed” because the bill, it turns out, was too extreme even for some members of the GOP. A number of female members objected to a provision that would have exempted rape victims from the ban only after they reported to police. Dissent grew throughout the week, and with as many as two-dozen Republicans ready to vote against the bill by late Wednesday, leaders pulled the whole thing.
Oh, well. Republicans immediately found another piece of bad meat to throw the mass of anti-abortion protestors who descended on Washington on Thursday for the annual March for Life: the No Taxpayer Funding For Abortion Act Titled just as misleadingly as the “Pain-Capable” legislation, this bill would have the most damaging effects in the private insurance marketplace, as Medicaid and other publicly funded programs are already barred from covering abortion services. House Republicans passed that legislation Thursday afternoon, as the anti-choice chants echoed across Capitol Hill.
According to the National Women’s Law Center, the bill “could result in the entire private insurance market dropping abortion coverage, thereby making such coverage unavailable to anyone.” It would permanently codify bans on abortion coverage for federal employees, residents of the District of Columbia, female inmates, women insured through the Indian Health Service, and women covered by Medicaid. It would also raise taxes on most small businesses.
The pivot was pure pandering. Representative Trent Franks, who introduced the twenty week ban along with Tennessee’s Marsha Blackburn, had noted previously that the vote was scheduled for the same day at the March for Life because of the “symbolism.” Many of the members who spoke on Wednesday in support of the ban gave more attention to promoting the march than to bill itself. “This week, the defenders of life in the thousands have and will come to Washington DC to support the sanctity of life,” said New Jersey Representative Chris Smith. “I want them to know we will keep fighting to defend the silent, unborn child.”
While reproductive rights groups received the failure of the twenty-week ban with glee, they quickly condemned the scramble to find a substitute bill. “Today’s exercise in the House is not about making public policy, nor is it about helping American women and families. It is about catering to a small minority of voters—anti-abortion activists who are descending on Washington for their annual march,” said NARAL Pro-Choice America President (and Nation contributor) Ilyse Hogue in a statement released Thursday.
It’s tempting to probe the political significance of a few female Republicans having the will, and enough muscle, to scuttle a bill that passed the House in similar form just two years ago. Maybe this one instance in which GOP leaders resisted the far-right fringe signals they’re finally waking up to the conclusion, encapsulated in the 2012 election post-mortem, that the party’s long-term success depends on women and minorities. And maybe not. (Call me when the House takes up immigration reform.)
But don’t overestimate the practical significance. Republicans are increasingly policing their optics and broadening their rhetoric—read Ran Paul’s rebuttal to the State of the Union for some silver tongue work concerning poverty, for example—but they are not ending their siege of legal abortion at the federal level or in the states, where the worst damage is being done. This would not be the first time that a high-level Republican chose not to highlight their extreme anti-woman principles and yet stuck to them. The twenty-week ban is likely to come up again this year, and it would be a dangerous bill even with a broader exception for rape victims. And out of the shadow of the March for Life, a vote will still be merely symbolic, as it’s unlikely to get through the Senate or to cross the president’s desk without a veto.
By: Zoe Carpenter, The Nation, January 22, 2015
“Everybody Over 40 Has A Little Back Pain”: Watch Out, Grandpa! Republicans Are Coming For Your Social Security
Hey, Rand Paul, why don’t you tell us how you really feel?
Last week, the junior senator from Kentucky mocked people on Social Security Disability Insurance (SSD), suggesting their ailments are not worthy:
What I tell people is, if you look like me and you hop out of your truck, you shouldn’t be getting your disability check. Over half of the people on disability are either anxious or their back hurts. Join the club… Who doesn’t get up a little anxious for work every day and their back hurts. Everybody over 40 has a little back pain. [Huffington Post]
This is just the prelude to the GOP’s plan to roll back the whole of Social Security. Paul’s remarks are part of a PR campaign to portray the program as riddled with lazy deadbeats and cheats.
Don’t believe me? Earlier this month, the Republican Congress adopted a rule change regarding the disability portion of Social Security. It has occasionally run short of money, which last happened in 1994 and will happen again in late 2016. Typically, the disability side is topped up with money from the (much larger) general Social Security funds. But Republicans have changed the rules to prevent this, which means disability payments will be cut by a fifth when the money runs out.
Now, they’re beginning to argue this is a great time to “reform” the system as a whole:
One of the co-sponsors of the rule change, Rep. Tom Reed (R-NY), said that his intention was to “force us to look for a long-term solution” to the disability program. But the rule itself says it will allow a revenue transfer if the “overall health” of Social Security, encompassing both the retirement and disability programs, is improved. That’s what Democrats are warning about, but some conservative analysts who have consulted with House staffers are also hoping that the GOP uses the threat of benefits cuts to go big. [Talking Points Memo]
If you examine the history of conservative animosity towards Social Security, as Dylan Scott does in a great piece, the long game here is obvious. Conservatives hated the program when it started, tried to abolish it for a generation, rolled it back slightly when it became firmly politically entrenched, and tried to privatize it in the Bush years. Conservative activists have been plotting this move for years.
The political entrenchment of Social Security explains the slyness of their tactics today. Social Security is one of the most popular programs in the country, and attempting to privatize it was a political disaster for Bush. Thus, passing bill after bill scrapping the program altogether a la ObamaCare would be committing political suicide. Much better to use a manufactured funding crisis to force a complicated political bargain that most people don’t understand. Better still to maneuver Democrats into accepting cuts, and then blame them for it and run against them on the issue.
Let’s look at the policy. Are conservatives right about SSDI being riddled with fraud, as an episode of This American Life squirmily argued two years ago? They are not. As a Center for Budget and Policy Priorities analysis shows, the increase in disability payments is mainly due to demographic factors. There is little fraud in the program (in reality, a large majority of applicants are rejected). The program doesn’t pay out much per beneficiary. And the general Social Security fund can top up the disability fund with only a tiny overall effect.
How about Social Security in general? Contrary to Republican anti-tax zealotry, the problem with Social Security is that it is not nearly generous enough. American retirement security used to rest on pensions, the 401(k) system, and Social Security. The first of those is almost dead, the second has been an utter failure, and the third is simply not big enough to provide a genuine retirement for most people. Boosting the program substantially would be simple and good policy.
Many years ago, it was widely accepted that as our country got richer, we could afford to work less as a whole. Disabled people could be kept out of poverty, and old people could retire. But conservatives are increasingly abandoning this idea. There is no reason Paul’s logic about the disabled couldn’t be applied to retirees, too. Can your grandma stack shelves at Walmart? Maybe she should, the lazy parasite.
In reality, we can easily afford to boost Social Security. Indeed, we can easily afford to eliminate poverty altogether. That we don’t is a political choice, nothing more.
By: Ryan Cooper, The Week, January 20, 2015
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