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“Social Security Faces Threat From ‘Ideological War'”: Republicans Manufacturing A Crisis’ To Hide Their Real Intent

Sen. Elizabeth Warren (D-Mass.) sent a message to supporters yesterday, warning of a real threat to Social Security. By any fair measure, she’s right.

“We’ve known for years that Social Security Disability Insurance is set to run low in 2016, and most people assumed that another bipartisan reallocation was coming,” the senator wrote. “But now, thanks to the Republican ideological war on our most important national safety net, disabled Americans could suddenly face a 20% cut in their Social Security checks next year.”

Let’s recap for those just joining us. The Social Security system provides disability payments to Americans who want to work but can’t for health reasons. For generations, when the disability-insurance program runs short on funds, Congress transfers money from elsewhere in the Social Security system to prevent benefit cuts. The solution, sometimes called “reallocation,” has never been especially controversial – in fact, it’s been done 11 times over the last seven decades.

But last month, congressional Republicans adopted a rule change that makes it almost impossible to approve the usual, straightforward fix. GOP lawmakers seem to want to create the conditions for a crisis.

All of which led to an important Senate hearing yesterday.

Carolyn Colvin, acting commissioner for the Social Security Administration, urged senators to act first to avert the crisis at hand and then begin serious negotiations on finding a longer-term solution. She said the threatened cut in disability payments – about 19 percent – would be a “death sentence” for many of the poorest recipients, but time and again, she refused to opine on more concrete options going forward.

When Colvin read aloud the president’s six principles for future reforms, Sen. Lindsey Graham (R-S.C.) was scornful. “That’s a set of principles that makes sure we do absolutely nothing meaningful,” Graham said. “If that’s the president’s plan, we’ll never get there.”

And by “meaningful,” it appears Graham and other Senate Republicans are waiting for the White House to propose cuts to Social Security. (Ironically, President Obama was open to modest Social Security cuts as part of a grand bargain with GOP lawmakers, but Republicans have refused to consider any possible concessions and effectively ruled out the possibility of a compromise.)

The Politico report added that Sen. Bernie Sanders (I-Vt.), the Senate Budget Committee’s ranking member, “angrily accused the GOP of ‘manufacturing a crisis’ to hide its intent to resurrect past proposals to cut Social Security benefits and privatize the system.”

This has the benefit of being true. Addressing the upcoming shortfall in the disability-insurance program should be easy. Republicans are ensuring that it’s not, hoping to exploit a manufactured crisis to force Social Security cuts they wouldn’t otherwise be able to get.

Indeed, the literal name for yesterday’s hearing for the GOP-led committee was, “The coming crisis: Social Security Disability Trust Fund Insolvency.” There would be no crisis, and no threat of insolvency, if Republicans hadn’t already ruled out the straightforward solution lawmakers have relied on for decades.

Budget Committee Chairman Mike Enzi (R-Wyo.) said yesterday, “I’m hoping the president will take an active role in this.” Expect more of this kind of rhetoric: Republicans will feign outrage over Obama refusing to offer far-right solutions the GOP-led Congress considers acceptable.

 

By: Steve Benen, The Madow Blog, February 12, 2015

February 13, 2015 Posted by | GOP, Social Security, Social Security Disability Fund | , , , , , , , | Leave a comment

“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

January 27, 2015 Posted by | Republicans, Social Security, Social Security Disability Fund | , , , , | Leave a comment

“The Latest Hostage”: Fact-Checking Republicans On Social Security Disability

We’re going to be hearing a lot about the Social Security Disability program over the next few months. That’s because it is the latest “hostage” the Republicans have decided to use as leverage to get President Obama and Democrats to give them what they want. You can read more about all that here, but it comes down to this:

The largely overlooked change puts a new restriction on the routine transfer of tax revenues between the traditional Social Security retirement trust fund and the Social Security disability program. The transfers, known as reallocation, had historically been routine…

The House GOP’s rule change would still allow for a reallocation from the retirement fund to shore up the disability fund — but only if an accompanying proposal “improves the overall financial health of the combined Social Security Trust Funds,” per the rule…While that language is vague, experts say it would likely mean any reallocation would have to be balanced by new revenues or benefit cuts.

As you can see, its simply the GOP’s latest version of, “give us what we want, or else…”

In order to prime the pump, Republicans are already attempting to take on the “slackers” who rely on the disability program. Exhibit A: Sen. Rand Paul.

The first thing I’d like to point out is that – from these remarks – it appears as though Sen. Paul assumes that only those disabilities that are visible physically are real disabilities. We all know that is not true.

But PolitiFact did a thorough job of fact-checking Sen. Paul’s statements. And in so doing, provided us with a lot of information that is going to come in very handy as this whole hostage situation unfolds. On the overall accusations of wide-spread fraud, waste and abuse, here are the facts:

After an audit of disability insurance in 2013, the Government Accountability Office estimated that in fiscal year 2011, the Social Security Administration made $1.29 billion in potential cash benefit overpayments to about 36,000 individuals who were working and making more than $1,100 a month (the limit to receive disability benefits).

The 36,000 people receiving improper payments, while a lot on paper, represent about 0.4 percent of all beneficiaries, the report said.

There are other ways Social Security gives out benefits to those not deserving, but paying people already working is about 72 percent of the problem, according to the Social Security Administration. Factoring that in, the GAO estimates overpayments equaled $1.62 billion, or 1.27 percent of all disability benefits, in 2011. It’s a lot of money, but the disability program is a $128 billion program.

Got that? The level of fraud we’re talking about is 1.27% of benefits paid. As a friend of mine would say, “Now run and tell that!”

 

By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, January 17, 2015

January 19, 2015 Posted by | Republicans, Social Security, Social Security Disability Fund | , , , , , | Leave a comment

   

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