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“For The Moment, The Ghost Of FDR Must Be Smiling”: 2016 Is Turning Into A Historically Great Year For Social Security

Not that very long ago, Republicans were almost universally united in favor of a strategy of “entitlement reform” that included various benefit cuts — some overt, like changes in the formula for cost-of-living adjustments, and some indirect, like retirement-age increases — in Social Security. Most Republicans also favored, in principle at least, some sort of partial privatization scheme for the signature New Deal program. Meanwhile, Democrats were generally divided into a large camp trying to keep the program exactly as it was, and a smaller group — including, at least in theory, President Barack Obama — that was open to such “entitlement reforms” as part of some budgetary “grand bargain” with Republicans.

How things have changed in 2016.

The Republican presidential nomination has been won by a candidate who conspicuously refused to climb aboard the “entitlement reform” bandwagon. Since rank-and-file Republicans have never much bought into Social Security (or Medicare) cuts, it was not surprising this particular Trump heresy troubled party elites but no one else.

Meanwhile, both Bernie Sanders and (to a lesser extent) Hillary Clinton have both been talking about enhancing Social Security benefits, with their main argument being over the financing mechanism, with Clinton being reluctant to embrace a lift in the payroll tax cap that would hit upper-middle-class voters.

But now along comes another potential game-changer: President Obama.

Not only do we need to strengthen its long-term health, it’s time we finally made Social Security more generous and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned,” Obama said in an economic call to arms in Elkhart, Indiana. “We could start paying for it by asking the wealthiest Americans to contribute a little bit more.”

Now you can interpret Obama’s shift any way you want — as a response to leftward pressure from the primary contest, or as proof he was never serious about “entitlement reform” to begin with, or simply as a parting middle-finger-gesture to the GOP, whose leaders were probably less serious than Obama about reaching some “grand bargain” that included high-end tax increases. But the fact remains that the combination of forces in favor of Social Security benefit cuts — or even for simple maintenance of the status quo — has been reduced significantly.

You’d have to say 2016 is becoming the best year for Social Security since at least 2005, when George W. Bush devoted most of his post-reelection political capital to a partial privatization scheme and had his presidential ass handed to him as congressional Republicans headed for the hills while Democrats failed to rise to the “bipartisanship” bait. There will continue to be extensive and fractious arguments over how to improve Social Security benefits and how to keep the whole system solvent. Meanwhile, nobody should take Donald Trump’s assurances on the subject to the bank, any more than anything else the mogul says. And if he loses in November, conventional Republican economic policy, including “entitlement reform,” could make a comeback. But for the moment the ghost of FDR must be smiling.

 

By: Ed Kilgore, Daily Intelligencer, New York Magazine, June 3, 2016

June 4, 2016 Posted by | Donald Trump, GOP Establishment, Social Security | , , , , , , , | 7 Comments

“From Someone Who Was Raised In Privilege”: Jeb Bush Wants Us To Work More For The Collective Good. Who’s The Socialist Now?

Former governor Jeb Bush’s announcement this week that he thinks people should work more hours puts him in direct opposition to the two leading contenders on the Democratic side – both of whom are pushing proposals that will allow people to work less. This could mean that 2016 will be an election in which work hours play a central role.

Bush’s comment came during a speech in which he listed the things that Americans need to do to reach his target of 4.0% annual GDP growth “as far as the eye can see”: increase labor force participation, work longer hours, and increase productivity. (It was not the first time that Bush said that he thought people should work more – he previously argued for raising the normal retirement age for Social Security.)

The sight of someone who was raised in privilege and relied on family connections to make his careers in business and politics telling the rest of the American public that they have to work more will make good fodder for Bush’s political opponents. But this position is actually held by many people in policy circles in both political parties.

Even if almost no one thinks that Bush’s 4.0% permanent growth target is remotely plausible, those that agree with his premise that Americans need to work more argue that we need more workers in order to sustain economic growth at all. In particular, they posit that, as our population ages, we will have to keep people in the work force beyond the current retirement age and get more hours of work from them each year until they do retire.

This view is striking given that the United States – and most of the rest of the world – has been suffering from the opposite problem for the last eight years: we don’t have enough jobs for the people who want them. The United States, Europe, and Japan all have fewer people working than would like to work because there is insufficient demand in the economy. Obviously we can’t both have a shortage of workers and a shortage of jobs at the same time.

One of the theories that is getting widely (and wrongly) repeated is that none of us will have work because robots are taking all the jobs. But, while the robots taking all our jobs story is an exaggeration, the basic point is right: we are seeing rising productivity, which means that we can produce more goods and services with the same amount of labor. Productivity, including that spurred by technological innovation, is the basis for rising living standards.

Historically, the benefits from higher productivity are higher pay and more leisure – if we go back a century, for instance, work weeks of 60 or even 70 hours a week were common. But while the American work week has been largely fixed at 40 hours a week for the last 70 years, other countries have pursued policies to shorten the work week and/or work year through paid sick days, paid family leave, and paid vacation.

Several European countries have actively pushed policies of work sharing as an alternative to unemployment: the government compensates workers, in part, for a reduction in hours rather than paying unemployment insurance to someone who has lost their job. Germany has led the way in pushing work sharing policies, which is an important factor in its 4.7% unemployment rate. And, as a result of work sharing and other policies, the average worker in Germany puts in almost 25% fewer hours each year than workers in the United States, according to the OECD. Most other wealthy countries are similar to Germany: in the Netherlands, the average work year is 21% shorter than in the US and, in Denmark, it is 20% shorter.

The leading Democratic contenders are proposing policies to bring the US more in line with the rest of the world’s work weeks. Secretary Clinton indicated that she will support paid family leave and paid sick days, although she has not yet produced specific proposals. Senator Bernie Sanders, the other leading contender, also supports paid family leave and paid sick days, and he recently offered a proposal that would guarantee all workers two weeks per year of paid vacation. That might seem like small change compared to the five to six weeks a year that is now standard in Europe, but it would be a huge gain for tens of millions of workers.

There is a long way yet before the parties select their nominees, but if the general election ends up being a contest between Jeb Bush and either Clinton or Sanders, it will present the country’s workers with an unusually clear choice. We will have one candidate who wants to ensure that people can work less but keep the same standard of living, and another who wants people to work more hours and retire later for the good of the country’s economy – and the latter candidate is the one who doesn’t identify as a socialist.

 

By: Dean Baker, The Guardian, July 12, 2015

July 13, 2015 Posted by | Bernie Sanders, Hillary Clinton, Jeb Bush | , , , , , , , , | Leave a 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

“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

“Life, Death And Deficits”: There Is No Good Case For Denying Older Americans Access To Medicare And Social Security

America’s political landscape is infested with many zombie ideas — beliefs about policy that have been repeatedly refuted with evidence and analysis but refuse to die. The most prominent zombie is the insistence that low taxes on rich people are the key to prosperity. But there are others.

And right now the most dangerous zombie is probably the claim that rising life expectancy justifies a rise in both the Social Security retirement age and the age of eligibility for Medicare. Even some Democrats — including, according to reports, the president — have seemed susceptible to this argument. But it’s a cruel, foolish idea — cruel in the case of Social Security, foolish in the case of Medicare — and we shouldn’t let it eat our brains.

First of all, you need to understand that while life expectancy at birth has gone up a lot, that’s not relevant to this issue; what matters is life expectancy for those at or near retirement age. When, to take one example, Alan Simpson — the co-chairman of President Obama’s deficit commission — declared that Social Security was “never intended as a retirement program” because life expectancy when it was founded was only 63, he was displaying his ignorance. Even in 1940, Americans who made it to age 65 generally had many years left.

Now, life expectancy at age 65 has risen, too. But the rise has been very uneven since the 1970s, with only the relatively affluent and well-educated seeing large gains. Bear in mind, too, that the full retirement age has already gone up to 66 and is scheduled to rise to 67 under current law.

This means that any further rise in the retirement age would be a harsh blow to Americans in the bottom half of the income distribution, who aren’t living much longer, and who, in many cases, have jobs requiring physical effort that’s difficult even for healthy seniors. And these are precisely the people who depend most on Social Security.

So any rise in the Social Security retirement age would, as I said, be cruel, hurting the most vulnerable Americans. And this cruelty would be gratuitous: While the United States does have a long-run budget problem, Social Security is not a major factor in that problem.

Medicare, on the other hand, is a big budget problem. But raising the eligibility age, which means forcing seniors to seek private insurance, is no way to deal with that problem.

It’s true that thanks to Obamacare, seniors should actually be able to get insurance even without Medicare. (Although, what happens if a number of states block the expansion of Medicaid that’s a crucial piece of the program?) But let’s be clear: Government insurance via Medicare is better and more cost-effective than private insurance.

You might ask why, in that case, health reform didn’t just extend Medicare to everyone, as opposed to setting up a system that continues to rely on private insurers. The answer, of course, is political realism. Given the power of the insurance industry, the Obama administration had to keep that industry in the loop. But the fact that Medicare for all may have been politically out of reach is no reason to push millions of Americans out of a good system into a worse one.

What would happen if we raised the Medicare eligibility age? The federal government would save only a small amount of money, because younger seniors are relatively healthy and hence low-cost. Meanwhile, however, those seniors would face sharply higher out-of-pocket costs. How could this trade-off be considered good policy?

The bottom line is that raising the age of eligibility for either Social Security benefits or Medicare would be destructive, making Americans’ lives worse without contributing in any significant way to deficit reduction. Democrats, in particular, who even consider either alternative need to ask themselves what on earth they think they’re doing.

But what, ask the deficit scolds, do people like me propose doing about rising spending? The answer is to do what every other advanced country does, and make a serious effort to rein in health care costs. Give Medicare the ability to bargain over drug prices. Let the Independent Payment Advisory Board, created as part of Obamacare to help Medicare control costs, do its job instead of crying “death panels.” (And isn’t it odd that the same people who demagogue attempts to help Medicare save money are eager to throw millions of people out of the program altogether?) We know that we have a health care system with skewed incentives and bloated costs, so why don’t we try to fix it?

What we know for sure is that there is no good case for denying older Americans access to the programs they count on. This should be a red line in any budget negotiations, and we can only hope that Mr. Obama doesn’t betray his supporters by crossing it.

By: Paul Krugman, Op-Ed Columnist, The New York Times, November 15, 2012

November 19, 2012 Posted by | Politics | , , , , , , , , | 2 Comments

   

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