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“Greed Is Always In Fashion On Wall Street”: Republicans Or Social Security? On 80th Anniversary, Still An Easy Choice

Ten years ago, as Americans celebrated the 70th anniversary of Social Security, the presidency of George W. Bush was already disintegrating over his attempt to ruin that amazingly successful program. The people’s rejection of the Bush proposal to privatize the system was so powerful that Republicans in Congress scurried away – and his political reputation never recovered.

Since then, the United States has endured a market crash and a crushing recession that proved how much this country needs its premier social insurance plan. Those events demonstrated that ceding control of Social Security and its revenues to Wall Street, in accordance with the Bush scheme, would have been a national disaster. And yet the Republican candidates for president seem utterly unable to learn that simple economic lesson.

To paraphrase the old French adage, the more things change, the more conservatism remains the same. On this 80th birthday of Social Security, the increasingly right-wing Republicans continue to blather the same old nostrums, as if they missed everything that has happened since 2005 – and as if they still want revenge against Franklin Delano Roosevelt for the humiliations he inflicted on their ideological ancestors.

Since August 14, 1935, Republicans and their financial backers have sought to undo the progress that Social Security represents for workers, the elderly, the disabled, and their families. Today’s Republican presidential wannabes all claim to be offering something new, but whenever they talk about Social Security, they sound as if they’re stuck in 2005 – or 1935.

From Rand Paul to John Kasich, from Marco Rubio to Rick Perry, from Lindsey Graham to Ted Cruz, from Bobby Jindal to Jeb Bush and George Pataki, they all agree that Social Security should be privatized. And with the possible exception of Mike Huckabee, all agree on undermining the only program that keeps millions of older Americans from ending their lives in poverty rather than dignity. Chris Christie, robber of public employee pensions, would swiftly raise the retirement age to 69, threatening grave hardship for blue-collar, lower-income Americans. Carly Fiorina would inflict similar suffering on workers who weren’t fortunate enough to snag an undeserved $40 million “golden parachute,” like she did.

Behind Republican warnings about the solvency of Social Security – and their enduring desire to privatize – are major financial interests that would like to seize the system’s revenue streams for their own profit.

Greed is always in fashion on Wall Street. But working Americans see no reason to hand Social Security over to the banks, when its administrative costs amount to well under 1 percent of its revenues. They know that the financial geniuses who almost sank the world economy eight years ago would charge far more than 1 percent, while imposing enormous risks on everyone but themselves.

So thanks, but — most emphatically — no thanks. As we mark this anniversary, most surveys show negligible support for privatizing Social Security or reducing its benefits; indeed, there is growing public support for proposals to expand and improve the system.

Yet polls also show many young Americans worrying that the system may not be sufficiently robust to pay full benefits by the time they reach retirement age. The latest report of the Social Security trustees, issued last month, suggested that the system’s trust fund could be exhausted by 2034.

Even then, the system’s revenues are projected to pay at least 75 percent of the benefits owed. But that wouldn’t be good enough when benefits are already too low – and there are several simple ways to fix Social Security’s finances so that nobody need worry. Long before the trust fund runs out of money, Congress can follow the example Ronald Reagan set in 1983 by raising the payroll tax rate — or mandate more progressive policy changes, such as lifting the cap on earnings subject to the tax, and broadening the tax base.

Declaring the nation’s “ironclad commitment” to Social Security, Reagan – who had once opposed the system as a symptom of creeping socialism – also expanded its base by bringing government employees into the system. Comprehensive immigration reform, which the Republicans oppose in nativist lockstep, would also create a stronger future foundation for all retirees and disabled workers.

So whenever these would-be presidents start barking about the need to pare, prune, or privatize this country’s most effective government program, remember this: Saving Social Security for future generations — even with higher payroll taxes — is far more popular than any of them ever will be.

 

By: Joe Conason, Editor in Chief, Featured Post, Editor’s Blog, August 14, 2015

August 15, 2015 Posted by | Republicans, Seniors, Social Security | , , , , , , , , | 3 Comments

“The Insecure American”: Members Of Our Political Elite Seem To Have No Sense Of How The Other Half Lives

America remains, despite the damage inflicted by the Great Recession and its aftermath, a very rich country. But many Americans are economically insecure, with little protection from life’s risks. They frequently experience financial hardship; many don’t expect to be able to retire, and if they do retire have little to live on besides Social Security.

Many readers will, I hope, find nothing surprising in what I just said. But all too many affluent Americans — and, in particular, members of our political elite — seem to have no sense of how the other half lives. Which is why a new study on the financial well-being of U.S. households, conducted by the Federal Reserve, should be required reading inside the Beltway.

Before I get to that study, a few words about the callous obliviousness so prevalent in our political life.

I am not, or not only, talking about right-wing contempt for the poor, although the dominance of compassionless conservatism is a sight to behold. According to the Pew Research Center, more than three-quarters of conservatives believe that the poor “have it easy” thanks to government benefits; only 1 in 7 believe that the poor “have hard lives.” And this attitude translates into policy. What we learn from the refusal of Republican-controlled states to expand Medicaid, even though the federal government would foot the bill, is that punishing the poor has become a goal in itself, one worth pursuing even if it hurts rather than helps state budgets.

But leave self-declared conservatives and their contempt for the poor on one side. What’s really striking is the disconnect between centrist conventional wisdom and the reality of life — and death — for much of the nation.

Take, as a prime example, positioning on Social Security. For decades, a declared willingness to cut Social Security benefits, especially by raising the retirement age, has been almost a required position — a badge of seriousness — for politicians and pundits who want to sound wise and responsible. After all, people are living longer, so shouldn’t they work longer, too? And isn’t Social Security an old-fashioned system, out of touch with modern economic realities?

Meanwhile, the reality is that living longer in our ever-more-unequal society is very much a class thing: life expectancy at age 65 has risen a lot among the affluent, but hardly at all in the bottom half of the wage distribution, that is, among those who need Social Security most. And while the retirement system F.D.R. introduced may look old-fashioned to affluent professionals, it is quite literally a lifeline for many of our fellow citizens. A majority of Americans over 65 get more than half their income from Social Security, and more than a quarter are almost completely reliant on those monthly checks.

These realities may finally be penetrating political debate, to some extent. We seem to be hearing less these days about cutting Social Security, and we’re even seeing some attention paid to proposals for benefit increases given the erosion of private pensions. But my sense is that Washington still has no clue about the realities of life for those not yet elderly. Which is where that Federal Reserve study comes in.

This is the study’s second year, and the current edition actually portrays a nation in recovery: in 2014, unlike 2013, a substantial plurality of respondents said that they were better off than they had been five years ago. Yet it’s startling how little room for error there is in many American lives.

We learn, for example, that 3 in 10 nonelderly Americans said they had no retirement savings or pension, and that the same fraction reported going without some kind of medical care in the past year because they couldn’t afford it. Almost a quarter reported that they or a family member had experienced financial hardship in the past year.

And something that even startled me: 47 percent said that they would not have the resources to meet an unexpected expense of $400 — $400! They would have to sell something or borrow to meet that need, if they could meet it at all.

Of course, it could be much worse. Social Security is there, and we should be very glad that it is. Meanwhile, unemployment insurance and food stamps did a lot to cushion unlucky families from the worst during the Great Recession. And Obamacare, imperfect as it is, has immensely reduced insecurity, especially in states whose governments haven’t tried to sabotage the program.

But while things could be worse, they could also be better. There is no such thing as perfect security, but American families could easily have much more security than they have. All it would take is for politicians and pundits to stop talking blithely about the need to cut “entitlements” and start looking at the way their less-fortunate fellow citizens actually live.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, May 29, 2015

May 31, 2015 Posted by | Economy, Great Recession, Poor and Low Income, Social Security | , , , , , | 1 Comment

“Battle Lines Drawn On Retirement Age”: There Will Be Some Big Political Arguments About Social Security

If New Jersey Gov. Chris Christie (R) hoped to start a broader discussion on entitlements, it worked. The Republican governor delivered a speech a week ago announcing his support for major “reforms” to social-insurance programs, including a call to raise the retirement age to 69.

Within a few days, many of his national GOP rivals were on board with roughly the same idea: former Florida Gov. Jeb Bush (R), Sen. Marco Rubio (R-Fla.), and Sen. Lindsey Graham (R-S.C.) are all now on record in support of raising the retirement age.

But in an interesting twist, some Republicans have been equally eager to take the opposite side. Take former Gov. Mike Huckabee (R), for example:

“I don’t know why Republicans want to insult Americans by pretending they don’t understand what their Social Security program and Medicare program is,” Huckabee said in response to a question about Christie’s proposal to gradually raise the retirement age and implement a means test.

Huckabee said his response to such proposals is “not just no, it’s you-know-what no.”

Even Donald Trump, who’s apparently flirting with the possibility of a campaign, rejected the idea during a Fox News interview yesterday. “They’re attacking Social Security – the Republicans – they’re attacking Medicare and Medicaid, but they’re not saying how to make the country rich again,” the television personality said. He added, in reference to GOP plans, “Even Tea Party people don’t like it.”

And then, of course, there’s the likely Democratic nominee these Republicans hope to take on next year.

Alex Seitz-Wald reported yesterday on Hillary Clinton’s campaign swing through New Hampshire, where she gladly chided Republicans over Social Security.

She chastised Republicans – though not by name – as “just wrong” for wanting to change the retirement program. “What do we do to make sure it is there? We don’t mess with it, and we do not pretend that it is a luxury – because it is not a luxury. It is a necessity for the majority of people who draw from Social Security,” she said. […]

“[M]y only question to everybody who thinks we can privatize Social Security or undermine it in some way – and what is going to happen to all these people, like you, who worked 27 years at this other company? What’s going to happen? It’s just wrong.”

Clinton has not yet said whether she’s prepared to expand Social Security benefits – a key progressive priority – but it’s nevertheless clear that when it comes to seniors’ social-insurance programs, the battle lines are taking shape.

“I think there will be some big political arguments about Social Security,” Clinton said yesterday. I think she’s right.

 

By: Steve Benen, The Maddow Blog, April 21, 2015

April 22, 2015 Posted by | Chris Christie, GOP Presidential Candidates, Social Security | , , , , , | 1 Comment

“The GOP’s Weird Social Security Gambit”: If That’s Christie’s Lead Issue, It Doesn’t Say A Lot For His Political Instincts

Now I know we don’t really care about Chris Christie and he’s less popular in New Jersey these days than air pollution in Elizabeth, but he actually said something interesting in his little “Hey, I’m still here” media blitz. He went after Social Security for no apparent reason.

Bizarre is the only word I can come up with for Christie’s proposal to means-test Social Security while also raising the retirement age to 69. It’s bizarre first because most experts think means-testing, which for Christie would start at $80,000, would be the death of the system. As the standard line goes, it would turn Social Security from an entitlement program to a welfare program, and welfare programs aren’t popular, so support for it would plunge, and it would end.

Of course, some people want that, so there is support for the idea among conservative policymakers. But here’s the thing, which is reason No. 2 the idea is bizarre: Who exactly was clamoring for this? Nobody! It’s been years since we’ve heard anyone making a big fuss about means-testing. Conservatives know it’s totally unrealistic, so they just don’t bring it up much. It’s akin to liberals and marginal tax rate north of 50 percent on dollars earned above some really huge amount. We’re for it in theory, sure, but we know it’s not in the cards, so there’s no point in even bringing it up. If that’s Christie’s lead issue, it doesn’t say a lot for his political instincts. You don’t even get truth-teller cred for this one, except from Pete Peterson and maybe The Washington Post editorial board (which hasn’t weighed in on Christie that I’ve seen but which generally backs “reining in” entitlements).

In New Hampshire over the weekend, many of the other leading Republicans, most notably Jeb Bush and Marco Rubio, agreed with Christie on the retirement-age question. I don’t think this is crazy talk. We’re living longer, and while people who perform hard physical labor if anything should have their retirement ages lowered, more of us do the kind of work that we can keep doing after 65. The retirement age is 67 in Norway, and other European countries are debating an increase to 67. The age at which an American will be eligible to receive full benefits will rise from 65 to 67 by 2027, so an increase is already on the books.

But while I may not think the idea is crazy talk, my fellow Americans are decidedly cool to it, disagreeing with such a proposal by nearly 2-to-1 in most polls you see. And of course any talk about changing Social Security scares old people, who have increasingly been voting Republican.

So why are Republicans talking about it? It’s kind of mystifying. I suppose business broadly supports it. But I think it’s mostly become just an anti-government thing. The real position is to oppose Social Security entirely, because it’s socialism and so forth. But of course they can’t say that, so they back things like means-testing and raising the retirement age. That is a benefits cut, which I suppose they think in the back of their minds will help whittle away at the whole thing over time. Any time you hear a Republican talk about “saving” Social Security or Medicare, they mean “save” in the sense of “destroy.” Or at least “disfigure.”

On the other side, Democrats are suddenly talking about increasing benefits. In the Senate in late March, Elizabeth Warren introduced a mostly symbolic resolution calling for an increase in benefits (it didn’t say exactly how) and it got the support of 42 of 44 voting Democratic senators. Joe Manchin, even! (The nays were Delaware’s Tom Carper, a longtime deficit hawk, and Heidi Heitkamp, who represents deep-red North Dakota.)

No word on all this yet from You Know Who. But what Hillary Clinton does on Social Security will be a real indicator of how drunk on Populism Kool-Aid she’s willing to allow herself to get. Will she, for example, support raising the payroll tax cap? Right now, earnings up to $118,500 are subject to the Social Security and Medicare tax. (That figure rises every year with inflation.) For many liberals—though by no means all, since a lot of them dislike the payroll tax in the first place—doubling, tripling, quadrupling that cap is kind of an obvious step. It even polls well.

The last time she was a presidential candidate, Clinton seems to have tried to have it both ways on this one. It was Barack Obama who pretty consistently supported raising the cap, even if he didn’t talk about it much. According to this interesting report from the left-ish economics journal Dollars and Sense, Clinton’s campaign distributed a flier in Nevada lighting into Obama for wanting to raise the cap so he could “send more of Nevada families’ hard-earned dollars to Washington.”

Yet apparently an AP reporter heard Clinton tell an Iowa voter that she’d support a so-called doughnut-hole approach that would keep the cap where it is and then re-impose a payroll tax at a higher income level (at the time she is supposed to have suggested $200,000). That would spare the vast majority of upper-middle-class earners—voters with lots of political muscle, that is—from a tax increase.

I would bet Clinton goes this route if she does anything, although four years on, the re-imposition number will likely be higher than $200,000. But even just putting it into the conversation will be important. The entire Social Security debate is about how to cut it, not how to expand it. And yes, a tax is a tax, and it’s always risky to talk about one, but as taxes go, this one is probably less risky than most. People like Social Security and seem to grasp that what they pay in, they get back, which is still true for the vast majority of retirees, who get somewhat more back in benefits than they put in.

So let the Republicans talk about how to cut. Clinton ought to do the opposite. She should do it in her responsible, Wellesley-girl way. She’s not Warren and shouldn’t try to be. But she can still leave the Republicans looking stingy and small.

 

By: Michael Tomasky, The Daily Beast, April 20, 2015

April 21, 2015 Posted by | Chris Christie, GOP Presidential Candidates, Social Security | , , , , , , , | 1 Comment

“An Attack On Retired Poor And Middle-Class People”: The Real Reason Social Security Is The Third Rail Of American Politics

Chris Christie still harbors hopes of becoming the Republican nominee for president, and in search of a way to convince conservatives that he’s one of them—and reinforce the idea that he’s a bold truth-teller who doesn’t care whose feathers he ruffles, and you might not agree with him but you’ll always know he’s telling it like it is—Christie has announced a plan to cut Social Security benefits. He would do it in two ways. First, he would means-test benefits, reducing them for those who have over $80,000 in income and phasing them out entirely past $200,000 in income. Second, he would raise the retirement age to 69 (it’s currently 66 and will soon rise to 67).

As Matt Yglesias explains, the cut in upper-income benefits is getting most of the attention, which works to Christie’s benefit because it sounds like his plan hurts rich people. But in fact, the number of people affected would be fairly small, while increasing the retirement age would be devastating to people of modest incomes. That’s particularly true of people who do manual labor, which in your late 60s becomes increasingly difficult. So Christie is proposing a plan that is actually an attack on retired poor and middle-class people, but it’s being described as an attack on the rich.

I should point out that even means-testing benefits can be a clever way to undermine the program as a whole. It eliminates the understanding that it’s a program for everyone and instead changes it to a program just for people of modest incomes, which then opens it up to further cuts and changes in the future. This is why most liberals oppose means-testing, even though it sounds like something they would support.

In any case, I want to return to this idea that Chris Christie is willing to tell the hard truths. Every story about Social Security mentions that it is the “third rail of American politics,” meaning you can’t touch it without being zapped. Anyone who would do so naturally deserves praise for their courage and for doing what’s right despite the risk. But why is touching Social Security dangerous?

It isn’t because of some magical incantation that FDR spoke over the bill as he signed it. It’s because, with the possible exception of Medicare, Social Security is the most successful and therefore beloved social program in American history. Before Social Security, aging was almost a guarantee of falling into poverty. If you’re below a certain age, you’ve probably never heard the cliché of old ladies eating cat food to survive, but at one time in America that was an actual thing.

But don’t we need to do something before Social Security goes broke? No. Social Security is not going broke, and if we want to fix the funding problems that we will confront a few decades from now there are relatively easy ways to do it; I discussed that years ago in this piece, and not much has changed since.

But back to Christie: Is it courageous to propose a policy change that would be tremendously cruel to millions of Americans? I guess it is in a way. But that doesn’t make it praiseworthy.

 

By: Paul Waldman, Senior Writer, The Merican Prospect, April 16, 2015

April 19, 2015 Posted by | Chris Christie, Poor and Low Income, Social Security | , , , , , , | Leave a comment

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