Slow Learners: Social Security Privatization Still A GOP Goal
Congressional Republicans have faced all kinds of heat recently for their misguided campaign to end Medicare and replace it with a privatized voucher system. It’s tempting to think the GOP would not only back away from this crusade, but would also learn a valuable lesson about Americans’ appreciation for bedrock domestic social programs.
Alas, that’s not the case. A few days ago, Rep. Pete Sessions of Texas, a member of the House Republican leadership, unveiled the “Savings Account For Every American Act,” which would allow Americans to withdraw from the Social Security system and opt into a privatized system.
Of course, with Social Security functioning as a pay-as-you-go program, if workers “opt out” of the system, Social Security would either (a) crumble with insufficient funds; or (b) need Congress to spend more money to make up the difference. How would Sessions address this? By all appearances, he hasn’t thought that far ahead.
Democrats, not surprisingly, were only too pleased yesterday to go on the offensive.
Democratic Congressional Campaign Committee Chairman Steve Israel (D-N.Y.) on Tuesday predicted that House Republican plans to let workers opt out of Social Security would fail as voters realize how it will threaten their retirement.
“Seniors who have paid into Social Security through a lifetime of hard work shouldn’t end up in a risky privatization scheme to gamble their retirement on Wall Street,” Israel said. “The public has rejected this kind of Social Security privatization in the past and will again.”
Israel accused Republicans of looking to resolve the government’s fiscal crisis by scaling back Medicare and Social Security, while ignoring higher corporate taxes.
In fairness, I should note that “Savings Account For Every American Act” (or, “SAFE Act”) isn’t exactly on a fast track to the House floor. After being introduced late last week the bill, H.R.2109, has an underwhelming six co-sponsors. That’ll likely increase, but Social Security’s supporters probably don’t need to leap into action to defeat the bill just yet.
Still, there’s something truly amazing about the fact that any Republican officials would pursue this at all. The American mainstream has shown, over and over again, that Social Security privatization is a non-starter. The very idea pushed Bush’s presidency into a downward trajectory in 2005, and it never recovered. Even Paul Ryan, when shaping the radical House GOP budget plan, left Social Security out of the equation.
For that matter, after the economy crashed in 2008, I assumed it’d be a long while until Republicans started talking up Social Security privatization again.
Perhaps Pete Sessions and his cohorts are slow learners?
I suppose the real fun would be putting the Republican presidential field on the spot. “Mr. Romney, a member of the House Republican leadership is pushing legislation to privatize Social Security. If such a bill reached your desk as president, would you sign it?”
Inquiring minds want to know.
Update: One of the six co-sponsors is Republican Caucus Chairman Jeb Hensarling of Texas. This is relevant because it means two members of the GOP leadership are on board with this proposal.
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, June 8, 2011
Walking Away From The Truth: GOP Playing With Matches On The Debt
Just ignore Tuesday’s vote against raising the debt ceiling, House Republican leaders whispered to Wall Street. We didn’t really vote against it, members suggested; we just sent another of our endless symbolic messages, pretending to take the nation’s credit to the brink of collapse in order to extract the maximum concessions from President Obama.
Once he caves, members said, the debt limit will be raised and the credit scare will end. And the business world apparently got the message. It’s just a “joke,” said a leader of the United States Chamber of Commerce, and Wall Street is in on it. Not everyone found it funny.
No matter how they tried to spin it, 318 House members actually voted against paying the country’s bills and keeping the promise made to federal bondholders. That’s an incredibly dangerous message to send in a softening global economy. Among the jokesters were 236 Republicans playing the politics of extortion, and 82 feckless Democrats who fret that Republicans could transform a courageous vote into a foul-smelling advertisement.
The games that now pass for governing in an increasingly embarrassing 112th Congress are menacing the nation’s future. It was bad enough when Republicans threatened to shut down the government to achieve their extreme and extremely misguided spending cuts, but that threat would have caused temporary damage. The debt limit is something else altogether. If the global credit markets decide that the debt of the United States will regularly be held hostage to ideological demands, it could cause significant harm to investment in long-term bonds and other obligations. That, in turn, could damage domestic credit markets and easily spark another recession.
To prevent this from happening, 114 Democrats in April asked for a “clean” vote without conditions. But Republicans were not about to set their hostage free. Knowing that the clean vote would not pass — and imposing a two-thirds majority requirement to ensure its failure — House Republicans gave the Democrats what they requested. They then voted it down, sending their reckless message to the world.
But there was no excuse for so many Democrats to go along with that message, including the leadership. Steny Hoyer, the minority whip, urged his members to vote no so they would not “subject themselves to a political 30-second ad attack” with all Republicans voting no. Apparently Mr. Hoyer did not trust voters to understand what a dangerous and dishonest game the Republicans are playing.
The exercise has prompted the White House to convene talks to discuss the Republicans’ scattershot demands, which have ranged from trillions in spending cuts to the outright dismantling of vital safety-net programs like Medicare and Medicaid. Democrats have hoped to get an increase in revenues out of any deal, but House Republican leaders emerged from a White House meeting on Wednesday spouting the usual discredited claims that higher taxes on the rich would impede job growth.
What Republicans seem unwilling to acknowledge is that the debt-limit debate is not about future spending. It is about paying for a deficit already incurred because of two wars and tax cuts approved by both Republicans and Democrats at the behest of a Republican president. Tuesday’s vote was a chance to do the right thing and educate the public on why it was necessary. Instead, too many lawmakers walked away from the truth.
Are Members Of Congress Engaged In Insider Trading?
When Congress isn’t sending billions in taxpayer money to bail out Wall Street firms, some of its legislators appear to be using information unavailable to the general public to personally profit on stock trades.
So says a study just published in Business and Politics. A portfolio that imitates the stock purchases of House members outperforms the market by more than 6 percent in the course of a year, its authors found. “A previous study of the stock returns of U.S. Senators in a leading finance journal indicates that their portfolios show some of the highest excess returns ever recorded over a long period of time, significantly outperforming even hedge fund managers,” they wrote. “Until now, there has been no similar study of Members of the U.S. House of Representatives.”
Now we know that from 1985 to 2001, the specific interval used to generate the data, senators do the best, House members follow, and the average American investor brings up the rear. In defense of Congress, however, most legislators weren’t exploiting their advantage: on average only 27 percent of senators and 16 percent of House members bought and sold common stock. Interestingly, in the House “by far the most successful traders were those Representatives with the least seniority.” The authors acknowledge that result is counterintuitive, and posit this explanation:
Whereas Representatives with the longest seniority (in this case more than 16 years), have no trouble raising funds for campaigns, junkets and whatever other causes they may deem desirable owed to the power they wield, the financial condition of a freshman Congressman is far more precarious. His or her position is by no means secure, financially or otherwise. House Members with the least seniority may have fewer opportunities to trade on privileged information, but they may be the most highly motivated to do so when the opportunities arise.
So what should be done?
It’s presented as a thorny problem. “To restrain Members from taking personal advantage of non-public information and using their positions for personal gain, Congress has decided that such unethical behavior is best discouraged by the public disclosure of financial investments by Representatives and the discipline of the electoral process,” the authors point out, but “to form a reasonable opinion of a Representative’s conflicts of interest, voters must familiarize themselves with their Representative’s personal asset holdings, the details of each law under consideration in the House and the voting record of the Representative. This could be difficult for any voter.”
That’s why faster disclosure would work best here. Forget filing periodic reports. Just force Members of Congress to be transparent about their stock trades in real time. Voter oversight wouldn’t even be needed — the idea is that self-interested traders would closely monitor the buying and selling of stock by legislators, who’d thereby lose a lot of their ability to get a jump on other investors.
Right?
By: Conor Friedersdorf, The Atlantic, May 27, 2011
Joplin And Natural Disasters: They’re Called “Emergencies” For A Reason
I’ve been writing a lot this week about congressional Republicans’ new approach to disaster relief funds in large part because I find it rather amazing, even for a contemporary GOP that no longer seems capable of surprising.
For all of our differences over party, ideology, and creed, we know that when disaster strikes and our neighbors face a genuine emergency, America responds. We don’t ask what’s in it for us; we don’t weigh the political considerations; we don’t pause to ponder the larger ideological implications.
We act. It’s who we are; it’s what we do.
The problem isn’t that conservative Republicans necessarily disagree with this principle. Rather, the problem is, they place other principles above this one when prioritizing how and whether to act.
While much of Joplin, Mo., is still under rubble from a devastating tornado, conservatives in Congress are starting to argue for a tougher approach to disaster aid, demanding that any funding be offset by cutting federal money elsewhere.
Disasters will no longer be considered “emergencies” if conservatives win this battle to redefine the way Congress funds aid packages for states and cities stricken by natural and man-made catastrophes. […]
Traditionally, the government has responded to disasters — hurricanes, tornadoes, floods and acts of terrorism — by using its power of the purse to aid the affected areas with “emergency” dollars that add to the debt because they don’t count against annual spending caps.
When hurricanes Katrina and Rita slammed into Louisiana and Mississippi in 2005, a vocal minority in the House called for offsetting tens of billions of dollars of spending with cuts to other programs. At the time, House Republican leaders shut them down. But now, as much of the Southern and Midwestern parts of the country have been hit by a series of catastrophic acts of nature, that vocal minority has become a controlling majority — at least in the House.
It was House Majority Leader Eric Cantor (R-Va.) who presented the new way of looking at disaster relief. He was willing to approve a $1 billion emergency package for Southwest Missouri, but on a condition — he wanted to cut money from a clean-energy program to pay for it. His party agreed.
The callousness becomes even clearer in the larger context. If the oil industry wants taxpayer subsidies, conservative Republicans don’t blink, and certainly don’t wonder how we’ll pay for the incentives. When Wall Street needed a bailout, the entire Republican leadership was on board with writing a very large check, without much thought to fiscal responsibility.
But when working-class communities get slammed by a natural disaster, through no fault of their own, suddenly the GOP grows miserly. Republicans’ first thought isn’t, “How can we help these struggling Americans get back on their feet?” Instead, it’s, “How will we block disaster relief aid unless we get corresponding spending cuts?”
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, May 27, 2011
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