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Threats to cut Social Security never die (photo: This is Awkward)
The push to cut Social Security is the ultimate horror movie monster. Despite the idea being defeated time and time again, it never dies. It just waits in the shadows until it is resurrected by the “grand bargain” obsessed necromancers whenever they think the time is right.
It was put forward by Erskine Bowles and Alan Simpson in 2010, but the whole plan was rejected by the commission members. It was offered as a concession by President Obama in 2011 as part of the debt ceiling deal, but was saved when House Republicans balked at tax increases. Again the idea was put forward by the Super Committee, but the program was only spared thanks to a lack of agreement. Now the so called “fiscal cliff” is being seized by some as the perfect opportunity to bring the idea back once more. From the New York Times:
Senate leaders are closing in on a path for dealing with the “fiscal cliff” facing the country in January, opting to try to use a postelection session of Congress to reach agreement on a comprehensive deficit reduction deal rather than a short-term solution.
[...]
First, senators would come to an agreement on a deficit reduction target — likely to be around $4 trillion over 10 years — to be reached through revenue raised by an overhaul of the tax code, savings from changes to social programs like Medicare and Social Security, and cuts to federal programs. Once the framework is approved, lawmakers would vote on expedited instructions to relevant Congressional committees to draft the details over six months to a year.
For people determined to force a horribly unpopular cut onto a country that opposes such a move the lame duck session really is the best moment. It is when regular people are least likely to be paying attention because of the holiday season. It is also when Congress contains many members who are never going to face the electorate again because they recently retired or lost.
Of course if you believe in the idea of accountable democracy, this would be a horrible violation of its principles; it relies on exploiting a historic remnant that a reasonable government should have eliminated decades ago.
This is just the beginning of the push to cut Social Security during the lame duck; expect the frenzy to really pick up as we approach the end of the year.
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This has to mean vigilance on our part.
It also means bearing in mind that some aspect might not be hideous, e.g. why should I feel sorry that someone who makes, as a retiree, over $________ (fill in a million or two million, whatever) should be means tested from collecting social security. Is that really a bad thing? I have heard the explanation, but it sounds a little strained to me.
Don’t get me wrong. This is one of the (many) really irritating things about Obama.
Concentration of wealth and need for the uber wealthy to keep growing their wealth is the root cause of our SS Medicare fiscal cliff. Dire consequences for bond holders and Gold investors if we don’t keep the status quo but we could give back all the money to SS that was diverted and go to single payer and stop militarizing the World, break up the Banks and Investments houses like TR broke up Standard Oil and no rich person would have to even change their lifestyle. Their GS jets would still fly and their mansions would still be party ready and they could still afford that $3700.00 bottle of pinot noir.
The means test is more likely closer to 100K.
The question is not IF SS & Medicare will be cut. The question is WHEN will SS & Medicare be cut, as well as by how much THIS TIME??
Don’t worry. RMoney? DMoney? Either “wins,” the 99% loses.
Will the zombies do it in the lame duck? Or will it be in 2013? Stay tuned… for the disaster coming your way. Sucks to be in the 99%.
The “problem” with Means Testing is that plays right into the hands of those who already claim that Soc Sec is socialism on steriods… and somehow being used as a dastardly malicious eeeeevul device to part the “hard hard working 1%” from the precious few dollars… to give to lazy slacker MOOCHERs in the 47% or 99%… pick your poison.
I don’t want to see Soc Sec means-tested for that reason.
BTW, there really is NO problem with Soc Sec, at least not that it cannot be fixed by raising the payroll tax rate on it, which right now is very very low.
Don’t buy it that Soc Sec is headed for some disaster. It’s not.
If either one of the two candidates of the uniparty is elected, you can bet that he will take it as a mandate to cut the social safety net in all ways. We already have proof, we don’t have to guess. Both have made it part of their plan to “cut the deficit.”
Exactly correct. We pay for these things in a fund separate from the yearly deficit.
“when regular people are least likely to be paying attention” as if the public even bothers to pay attention at any time. When they are standing in soup lines and voucher for a night in the local homeless shelter they’ll ask themselves, “what the hell happened??
“For people determined to force a horribly unpopular cut onto a country that opposes such a move the lame duck session really is the best moment.”
Yup. The last lame duck session saw the BushCo tax cuts for the rich extended.
The proposed means testing itself starts at a very low income level.
http://www.cbpp.org/cms/index.cfm?fa=view&id=3402
See Figure 2 in the above link. Means testing would result in lower benefits beginning at around $43K if I read the chart correctly. (Willing to learn if I’m seeing this incorrectly).
But I agree with comments above that means testing turns SS from an insurance program to a welfare program, and thus easier to demonize and cut.
SS payouts are already “means tested”: benefits are paid out on a curve which proportionally reduces payouts to the higher earned incomes. Check it out. SS was planned that way. Listen, the people who constructed the SS system accounted for all the issues and it’s a well thought-out program.
The bottom line for the opposition is that SS is an anti-poverty program and they know their dominance is based on a large pool of desperate and defenseless poor. It’s that simple. It’s also why they oppose climate change change. Changing climate change isn’t an issue of tinkering a little with the system, it’s radical rearrangement and reallocation and the opposition knows that. Counterpunch and The Nation have run articles on just this topic(Naomi Klein alert!): it isn’t about science, it’s about radically changing systems and lifestyles.
To be clear: A supermajority of 14 out 18 votes was required to pass. It received 11 votes. The majority of those voting FOR the report were Democrats.
The eleven voting for it were six Democrats (Bowles, Conrad, Durbin, Fudge, Rivlin, Spratt) and five Republicans (Coburn, Cote, Crapo, Gregg, Simpson); the seven voting against it were four Democrats (Baucus, Becerra, Schakowsky, Stern) and three Republicans (Camp, Hensarling, Ryan).
http://en.wikipedia.org/wiki/National_Commission_on_Fiscal_Responsibility_and_Reform#Commission_members
Saw this coming when Obysmal assumed office: the rhetoric shifted, the tone shifted. Oh, yes, change was in the air and it wasn’t the package the ersatz liberals had bought. Classic bait and switch. But instead of getting angry, the children of an evil god are out with pitchforks and torches for anyone who points out the fraud. Brainless bunch, much given to referring to “low information voters” and with no discernible sense of irony.
If Irksome Bowels is made Treasury Secretary we will know the fix is in.
So true, before SS 50% of our older population lived in poverty and had no healthcare. The PTB want to go back to that I believe. I read somewhere that narcissists actually enjoy other ppeople’s suffering, they can get a dopamine rush from seeing homeless people and I believe many of our MOTU and their minions are narcissists.
Keep in mind that the “crisis” in Social Security is that if nothing is done, in thirty years or so benefits may have to go down to 75% of what is promised — or the payroll tax may have to be raised a couple percentage points instead. So basically, there is no crisis at all.
http://www.americanprogress.org/issues/economy/news/2005/05/03/1481/social-security-questions-and-answers/
“After 2027, Social Security is expected to draw on its trust funds to pay for the expenditures that are not covered by income. Finally, in 2041, the trust fund surplus is expected to be depleted, and annual revenue into the program is projected to be less than expenditures. However, the trustees project that Social Security will still be able to pay between two-thirds and three-quarters of its promised benefits from 2042 to 2081, the farthest date they project.”
You are correct (although some people could quibble that a 12.4% payroll tax rate is very very low).
Truth be told the Congress has raised the payroll tax rate from 2% in the 30′s to 12.4% in 1990 and hasn’t raised a percent in the last 22 years.
Year…….Employee plus employer
1937-49….2%
1950…….3%
1951-53….3%
1954-56….4%
1957-58….4.5%
1959…….5%
1960-61….6%
1962…….6.25%
1963-65….7.25%
1966…….7.7%
1967…….7.8%
1968…….7.6%
1969-70….8.4%
1971-72….9.2%
1973…….9.7%
1974-77….9.9%
1978…….10.1%
1979-80….10.16%
1981…….10.7%
1982-83….10.8%
1984…….11.4%
1985…….11.4%
1986-87….11.4%
1988-89….12.12%
1990…….12.4%
They all worry more about their re-election than the elderly.
As the so-called “Greatest Generation” dies off, so too does the recollection of how poverty-stricken many Seniors used to be.
I can still recall my “Greatest Gen” parents dissing Soc Sec and speaking boldly about how Seniors now had “more than enough” and “didn’t need Soc Sec welfare.” Of course, my 92 yr old Dad (with Alz) still collects his Soc Sec. Even my fundie nutty rightwing siblings make sure that check is in the mail and put to good use.
But will my sibs stand up and fight against the PTB over cuts to Soc Sec & Medicare for themselves & their kids? DOUBTFUL. My sibs talk “big” about fake libertarian “rugged individualism” and how they don’t need the govt to “take care of them” because… I’ve come to the conclusion that it’s a form of insanity. It’s the only logical explanation, if logic can even be applied.
Most people these days are in deep deep denial about the poverty that seniors used to suffer and endure before Soc Sec. Too bad, so sad that it has to get THAT bad again before these fools wake up (if they even wake up then… unsure if that will ever happen. Rip van Winkle’s got nothing on these citizens).
Boy you got that right. I try to talk to the people I work with and they just stare at me……like their in some state of comatose. Maybe thats what needs to happen….that they are standing in soup lines only I don’t want to be there with them.
You’re basically correct, although your numbers are a little dated (2005?).
Per the 2012 SS Trustees Report:
Sure enough.
They could raise the Soc Sec tax rate, plus they could raise the income cap. Those are two easy measures, but you won’t see it happen. Instead there’ll be hyperventilating spin about how Soc Sec is heading towards the cliff, which is utter nonsense.
Rather, our “representatives” in DC will vote again to extend the Obama tax cuts for the excessively wealthy bc that’s who “matters” anymore.
I recognize the fact that there will quite possibly be as many as 40 +/- lame duck legislaturds in the House but probably only 4-6 in the senate. (Please correct me if I am wrong) That being the case, in the event some really bad legislation that would benefit the 1% and the corporations and would have a negative impact on the 99% gets passed, can’t Obama just veto it?
Uh oh. Nevermind.
True we seem to be going in circles and cycles but overall after this next “re” “de” pression the next “greatest” generation will do better and I’m sure of this because of history repeating itself. Humans are evolving ever so slowly but they are (or we would still be in caves wondering how to make fire). I see dark times in the near future but a better life for the survivors.
Listen to the song “Early Roman Kings” in the new Bob Dylan album “Tempest.” I believe it’s about the MOTU and paints a good surrealistic portrait of them.
I will, I heard this was possibly Dylan’s best work in many years but that didn’t motivate me to get it but now you have. :)
The second half of the album in particular is remarkable.
I sometimes think about that incomparable BBC production I Claudius with the ever-fabulous Derek Jacobi.
But half that tax is on employers not employees, right?
Does anyone know,what exactly the amount of the cut will be? I ask,bc if large enough maybe it is time for some real torches and pitchforks.
Bowles-Simpson changes the formula so radically (in the link you posted) that the middle class worker ends up getting a reduced benefit of 100 to 150% of the poverty level.
I guess folks experience this truth with so much unresolved shock that they cannot believe that the millionaires in government would do this to us.
The whole benefits cuts crime is so premeditated, pre-publicized here, and forewarned, that it just seems like watching a train wreck in very slow motion.
That is really a fucking crime,
Have to see that again!
Yes, and yet, if you ask most citizens about cuts to Soc Sec, they are utterly clueless… and/or if they happen to know that it’s been discussed, they point their finger at the “other side” as the party that’s responsible for proposing it. Hence, the Tea Partiers will reliably vote for RMoney cuz they think he’ll “save” them, and the Obamabots will reliably vote for DMoney cuz he’s the lesser evil & surely RMoney will be worse.
Neat trick on the part of the 1% – eh?
Try it on your rightie & leftie friends & co-workers and see that I’m correct.
Yes, Employee plus employer.
But it’s generally accepted that the cost to hire includes employee Salary, Benefits and Payroll Taxes. So it really doesn’t cost the employer. He could pay you Salary and Benefits plus 12.4% and you pay all the tax, or pay you Salary and Benefits plus 6.2% and split the tax.
It’s money that’s going from employer to government, or employer to you to government, but however you count it, you don’t get to keep it.
Problem for 1% is that they will get what they want and people will starve in the streets and the consumer driven economy will crash and their portfolios will suffer along with millions of real live people who aren’t just numbers on a spreadsheet. Then the shit will hit the proverbial fan and the 99% will have their day. I think it is all baked in the cake already since we are watching the slow motion train wreck of the PTB. They can’t help themselves because they are not smart just rich.
That article does say the Simpson Bowles plan is not a good starting point. What bothers me more than anything is they claim solvency must be restored to SS. That is their starting point. SS is insolvent so drastic action must be taken. That is an outright lie. We must get this part right. It is not a matter of the trust fund running out. Same thing for Medicare. We must learn this lesson. The federal government can never become insolvent in debt denominated in dollars. I mean fucking never. Until we fully understand that,the fuckers will herd us into a corner.
The only risk to SS is if there are insufficient real resources. There is no sign of that in the foreseeable future.
So the best solution, as a salve for all those who get the vapors over this sort of thing, is for the treasury to print,oh take a number, fifty trillion in bonds and give them to the trust fund. I am fucking serious. That is how easy this is.
We are here at the mercy of the fucking neoliberal economists as we are at almost everything. It makes me nuts.
I don’t think I’ve seen raising the rate put forward as an option (other than today’s discussion). That would be a very regressive approach, compared to raising the cap, or applying the rate to all incomes, not just wages. Have you seen this proposed? No big deal, just curious.
There’s an even better result using your solution. The treasury could print everyone a $1,000,000 bill to be received at age 65, and then we could do away with Social Security all together.
Of course it costs the employer. Imagine if there were no tax? How much more competitive would they be? Maybe keep more jobs here? Here is another Idea. Lower the corporate income tax. We seem to think those kind of taxes are necessary and reasonable. But they are a cost to the employer, like it or not. Corporations move overseas bc it is less expensive there. Let’s get smart and make it less expensive here. We only need taxes to redistribute income or to fight inflation. Beyond that federal tax is somewhat meaningless. State taxes are needed. But then we can fix most of that too.
That is straight up bullshit. A bond is not payable until the future or when needed.
If you have to choose that is the better solution.
Haven’t heard it propose for this “shortfall”, but as you can see at #17 it’s been done a lot over the years.
I think we’ve had this discussion before, raising the cap, or applying the rate to all incomes doesn’t help unless you also change the benefits formula (which Congress could do). Raising the amount taken in from the rich just gets them a bigger check at retirement and nothing’s really fixed.
I don’t care what they say about you Alan. You’re a visionary.
Huh? Big leap of bs there.
Ok. Then you’re redistributing income from employers to the elderly in the form of payroll taxes collected to pay Social Security.
OK, now I’ll have to go digging for some links. I’m pretty sure that the proposal to raise the cap includes raising the benefits, and how the numbers work out, actuarily, but I don’t have the info. Will save for what I’m sure will be another discussion one of these days.
Almost there. How bout redistribute taxes to SS. Oh wait, that is what we do now. They are called transfer payments for a reason. But we don’t need payroll taxes to do it. The usual income tax can do it. Just like they did these past two years.
Called it at comment 85 in a Book Salon a month ago
Mary, there is no necessary reason that raising the cap must also mean raising the benefits. We have just been programmed to believe that.
If Obama buys into that bs he will go down as the worst ever, I feel pretty sure of that. I think or hope he is wise enough not to go all in on cuts. I think he will cut bc he doesn’t understand how money works. But I believe he will be cautious. Simpson Bowles is extreme.
Yep, I gotta run, in parting.
Lifting the cap will bring in more taxes. But benefits are paid on average of 35 years of TAXED income. Currently the taxed part is limited to $110,100 and the max benefit is around $2300 per month. If the cap were raised to $500,000, you’d bring in 12% more of the extra $400,000, but using the current formula would calculate the fat cats benefits at $500,000 per year instead of $110,100.
BTW, I agree.
As I said in #42, Congress can change the formula any time they want.
Yes, I agree, but it’s interesting to see the numbers. Maybe I’m wrong in remembering an alternative that includes increasing the benefits, but I’ll do a little looking, though not today.
Absolutely right, Jon!
It’s terrible the way repubican assholes like Alan Simpson force brave preznint Obama to help them slag Social Security.
I think the left must become more creative in its proposals. It is not enough to simply bitch about the PTB or Obama or Romney. And we need to get some teeth behind it. That starts with throwing out the duopoly and replacing it with a monopoly party. People like Bachman and associated fools must,go. And we need to radically change the ordinary economic approach.
Don’t do it on my account though.
hah!thanks, no it just got me curious, though I won’t spend all that much time on it. I agree with your comment that we need to be more creative in our proposals, and also more succint in presenting our reasoning. We tend to counter “SS is going broke, the sky is falling” with a lengthy analysis of why it isn’t, alternatives, etc. but no flashy buzzwords to go along with it.
FYI http://www.huffingtonpost.com/2012/10/02/krugman-simpson-bowles-fiscal-cliff_n_1932229.html
Exactly. All this discussion of cuts and no one wants to talk about simply raising the payroll deduction for SS & Medicare. With the latter, I know it isn’t that simple, because we don’t know how much Medicare is going to cost 20, 20+ years from now, when many of us will be retiring, but, surely, cutting it isn’t the solution and I am seeing firsthand, with a parent who recently suffered a stroke, what an unbelievable financial catastrophe it would be if she weren’t covered by Medicare.
Yes, exactly.
Cutting either program is not the way to go. There are other creative solutions that have not been given the time of day, nor much time spent on figuring out anything useful, like Single Payer.
Our 1% overlords know that very well, but clearly they don’t give a shit.
Welcome to Sarah Palin’s death panels, my friends. THIS is what that really means.
Brilliant, especially the last sentence. Makes me wish we could “+1″ comments here. Thank you.
If the poor have enough to survive when they become elderly, they might think about our economic system and want changes.
Better to keep them starving, struggling and ignorant, mere Gammas and Deltas to the end, blissful in poverty, praising their Randian malefactors.
An unbelievable financial catastrophe for you as well as her. Some of these slash and burn enthusiasts have parents whose medical responsibilities would be entirely on the families–and whose own medical responsibilities will fall entirely on their families. Oh, joy, poverty and debt as far as the eye can see and the mind imagine. Welcome to the dirt floor hovel and food when and where you can find it, suckers.
Oh, but they do give a shit. That’s why they’re fighting so hard and putting up so much money. If it meant nothing to them, they wouldn’t spend a minute or a dime.
Yes, and you’ve heard the rumors, of course, about Simpson and Bowles forcing their ways past WH security and holding the first family hostage until Obama agreed to put them on the deficit commission.
It is when regular people are least likely to be paying attention because of the holiday season.
nice little present from our corportist overlords – Happy Holidays.
I didn’t know it was that dramatic! Do you have a link to something discussing this change?
I knew it was horrible but, not that it is THAT clear. With numbers like this it should be easy to raise awareness.