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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

“Is Corruption A Constitutional Right?”: Public Pension Contracts Would Be For Sale To The Highest Bidder

Wall Street is one of the biggest sources of funding for presidential campaigns, and many of the Republican Party’s potential 2016 contenders are governors, from Chris Christie of New Jersey and Rick Perry of Texas to Bobby Jindal of Louisiana and Scott Walker of Wisconsin. And so, last week, the GOP filed a federal lawsuit aimed at overturning the pay-to-play law that bars those governors from raising campaign money from Wall Street executives who manage their states’ pension funds.

In the case, New York and Tennessee’s Republican parties are represented by two former Bush administration officials, one of whose firms just won the Supreme Court case invalidating campaign contribution limits on large donors. In their complaint, the parties argue that people managing state pension money have a First Amendment right to make large donations to state officials who award those lucrative money management contracts.

With the $3 trillion public pension system controlled by elected officials now generating billions of dollars worth of annual management fees for Wall Street, Securities and Exchange Commission regulators originally passed the rule to make sure retirees’ money wasn’t being handed out based on politicians’ desire to pay back their campaign donors.

“Elected officials who allow political contributions to play a role in the management of these assets and who use these assets to reward contributors violate the public trust,” says the preamble of the rule, which restricts not only campaign donations directly to state officials, but also contributions to political parties.

In the complaint aiming to overturn that rule, the GOP plaintiffs argue that the SEC does not have the campaign finance expertise to properly enforce the rule. The complaint further argues that the rule itself creates an “impermissible choice” between “exercising a First Amendment right and retaining the ability to engage in professional activities.” The existing rule could limit governors’ ability to raise money from Wall Street in any presidential race.

In an interview with Bloomberg Businessweek, a spokesman for one of the Republican plaintiffs suggested that in order to compete for campaign resources, his party’s elected officials need to be able to raise money from the Wall Street managers who receive contracts from those officials.

“We see [the current SEC rule] as something that has been a great detriment to our ability to help out candidates,” said Jason Weingarten of the Republican Party of New York — the state whose pay-to-play pension scandal in 2010 originally prompted the SEC rule.

The suit comes only a few weeks after the SEC issued its first fines under the rule — against a firm whose executives made campaign donations to Pennsylvania governor Tom Corbett, a Republican, and Philadelphia mayor Michael Nutter, a Democrat. The company in question was managing Pennsylvania and Philadelphia pension money. In a statement on that case, the SEC promised more enforcement of the pay-to-play rule in the future.

“We will use all available enforcement tools to ensure that public pension funds are protected from any potential corrupting influences,” said Andrew Ceresney, director of the SEC Enforcement Division. “As we have done with broker-dealers, we will hold investment advisers strictly liable for pay-to-play violations.”

The GOP lawsuit aims to stop that promise from becoming a reality. In predicating that suit on a First Amendment argument, those Republicans are forwarding a disturbing legal theory: Essentially, they are arguing that Wall Street has a constitutional right to influence politicians and the investment decisions those politicians make on behalf of pensioners.

If that theory is upheld by the courts, it will no doubt help Republican presidential candidates raise lots of financial-industry cash — but it could also mean that public pension contracts will now be for sale to the highest bidder.

 

By: David Sirota, Staff Writer at PandoDaily; The National Memo, August 15, 2014

 

August 16, 2014 Posted by | Campaign Financing, Politics, Wall Street | , , , , , , , | Leave a comment

   

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