Social Security

President Obama's National Commission on Fiscal Responsibility and Reform, co-chaired by Alan Simpson and Erskine Bowles, has issued a doomsday report on "fixing" the Social Security retirement system (OASDI) as a part of its proposals to reduce the Federal deficit. This flies in the face of the fact that, not only has Social Security not contributed a dime to the deficit, it has a $2.52 trillion surplus! Amongst other things, the co-chairs would drastically cut retirement benefits and increase the retirement age to 69. Not a single member of this commission, or of the vast TV/audio/print media, has mentioned nor studied other solutions to the alleged Social Security "crisis". John M. Bachar, Jr.

Although the Social Security system (signed into law by FDR on August 14, 1935) initially covered a relatively 
small part of the working force, FDR assured his allies it was just the beginning: "I see no reason why everybody in the United States should not be covered," FDR privately told Francis Perkins. "Cradle to the grave – from the cradle to the grave they ought to be in a social insurance system."

But talking about cutting Social Security benefits, rather than raising financial speculation taxes, or other progressive taxes, cannot honestly be called making tough choices. It is making a cowardly choice. It is serving the interests of the rich and powerful at the expense of the vast majority of the population. That may be what politics is about, but it should be described accurately. (Dean Baker)

"The healthcare system...the huge military spending, the very low taxes for the rich [and corporations]...those are fundamental problems that have to be dealt with if there’s going to be anything like successful economic and social development in the United States." As Republican presidential candidate, Texas Gov. Rick Perry, calls Social Security a "Ponzi scheme," and Democrats buy into the narrative that the program is in crisis, to worry about a possible problem 30 years from now, which can incidentally be fixed with a little bit of tampering here and there, as was done in 1983, to worry about that just makes absolutely no sense, unless you’re trying to destroy the program." Noam Chomsky

Why, in God's name, in a tight race, did Barack Obama have a hard time saying six words: 'I will never cut Social Security'? Why won't these Democrats say: 'We will never cut Social Security? ... If they can't say that, how are they ever going to go after Wall Street ? The American people have answers to those questions, he says: "They think it has a lot to do with where campaign money comes from." Senator Bernie Sanders quoted by John Nichols in the Nation Magazine November 2012

The President Offers to Cut Social Security and Republicans Agree (4/10/2013)

Sanders to Obama: Don't Touch Social Security (4/5/2013)

Over the last few years, Wall Street has thrown every commission, gang, sequester and supercommitee they could come up with at our Social Security system. Because of your voices, we have beaten them back time and again. It is time to remind them again, hands off our Social Security, Medicare, Medicaid and Veterans' benefits! Michael Phelan Social Security Works

Mandatory E-Verify Would Overwhelm the Social Security Administration (9/17/2011)

Rick Perry, Social Security is a Monstrous Lie (8/28/2011)

Understand the Right's Attack on Social Security (8/28/2011)

Barney Frank on Social Security, etc. (8/10/2011)

With AARP Supporting Social Security Benefit Cuts, It's Time To Burn My AARP Card (6/17/2011)

Word to the Fiscal Commission: Hands Off Social Security (11/10/2010)

Why is it So Acceptable to Lie to Cut Social Security Benefits ? Dean Baker (10/15/2010)

The GOP is the Party Out to Get Social Security

Here are just the most recent attempts of the GOP to effectively destroy Social Security.

• 2005: President Bush launched a major White House initiative, led by none other than Karl Rove, to privatize Social Security. After a massive outcry and campaign by Democrats to stop the GOP plan to privatize Social Security, public disapproval of the president’s handling of the issue rose to 64 percent. The GOP plan was finally abandoned only after the Bush administration’s botched handling of Hurricane Katrina permanently derailed his administration.
• 2010: A ThinkProgress report documented at least 104 Republicans in the last Congress who still wanted to privatize Social Social Security, even after the financial collapse of 2008 underscored how dangerous a move that would be.
• June 2011: Rep. Pete Sessions (R-TX), who leads the House GOP’s election efforts, introduces a new bill to privatize Social Security. Other leading Republicans, including Rep. Jeb Hensarling (R-TX), who would later serve as the GOP co-chair of the Super Committee, take to calling Social Security a “Ponzi scheme.”
• July 2011: Some 229 House Republicans and 46 Senate Republicans vote for a radical budget plan that would result in massive cuts to Social Security (along with Medicare, Medicaid, and anything else the government spends money on).

We're Being Conned on Social Security -- How We Could Easily Raise Benefits or Allow People to Retire Earlier (9/3/2010)

A Way to Make Social Security Solvent for the Next 75 Years: Senator Sanders. (8/16/2010)

Situation Room Still Scaring on Social Security (8/16/2010)

Hands Off Social Security, There are better ways to cut the National Debt (6/29/2010)

Meet the Man Who Perversely Argues for Cutting Social Security Benefits to "Take Care of the Lesser People in Society"  (6/18/2010)

Social Security Works

Republicans wanted to privatize Social Security and allow you to manage your own money. You still think that is a good idea after the last couple of years of financial meltdown ? Well, guess what. They are still determined to do it.

Looting Social Security (1/5/2010) William Greider, The Nation.

The financial services industry has donated large amounts of money to both Republicans and Democrats, and the one thing that both parties can agree is that they need to fix Social Security. Well funded ( and right wing) ‘think’ tanks like the CATO Institute and the Concord Coalition have been promoting the idea that Social Security is in deep trouble, and that in another thirty years or so, that it will not be able to keep paying full benefits.

The mainstream press never questions that there is a problem. Projections that Social Security will be in trouble rest on the premise that the economy will grow at a rate considerably below its long-term average. Low long-term rates of growth imply a period of economic decline that would itself be news. At average long-term growth rates, there is not much of problem and it is certainly not an emergency. See the article, “Nine Misconceptions about Social Security” in Atlantic for July 1998.
 
 William Shipman of State Street Bank told the magazine Pensions & Investments that if privatization were to succeed “You could be staring at 130 million new accounts” and it would add millions in custodial fees to the pension assets it manages. Such a change will certainly benefit bankers and investment brokers with many millions of new accounts, but there is little chance that it will function as efficiently or as well as the present system when you consider the often very large private salaries, and expenses for sales, telemarketing, and advertising.

After a severe economic downturn in the 1930’s Social Security was designed as an insurance program, a stimulus for broad-based demand, and a damper for the business cycle.  Paul Krugman in Foreign Affairs magazine wrote there is now an eerie similarity in today’s markets to those of 1929. George Soros has written that uncontrolled capital flows act like a wrecking ball that can destroy national economies and possibly render international mechanisms ineffective.  The widening distribution of income is also likely to result in a more volatile economy. You may want to go it alone, but a lot of us don’t.

According to the privatizers, the Social Security guarantee would better be converted into a risk based program. Most people are not market savy, and, although investing can be educational,  past returns are not assured for the future.

When the politicians say they will ‘fix’ Social Security, keep in mind that all proposals before the Congress will reduce benefits.

  Anyway there are already sufficient numbers of ‘private accounts’ like 401K; IRAs, Roth IRAs, Medical Savings Accounts (MSA’s), and others so that adding a new species of account can only further complicate the tax code.

The privatizers ignore other functions of Social Security including disability payments or survivors benefits.
In June, Rep. Charles Rangel, ranking member of the House Ways and Means Committee, released a Congressional Research Service (CRS) analysis on the extent to which three Social Security reform proposals would reduce defined Social Security benefits:
* a proposal by the National Commission on Retirement Policy, a panel of Members of Congress and private citizens organized by the Center for Strategic and International Studies (legislation recently introduced in the Senate by Senators Judd Gregg, John Breaux and a few other senators — S. 2313 — and in the House by Reps. Jim Kolbe, Charles Stenholm, and others — H.R. 4256 — is based on the NCRP proposal); and
* the bill introduced by Senators Daniel Patrick Moynihan and Robert Kerrey (S. 1792);
* a May 1998 proposal by Robert Ball, commissioner of the Social Security Administration under Presidents Kennedy, Johnson, and Nixon and a member of the 1994-1996 Social Security Advisory Council. According to the CRS, none of the proposed plans will improve benefits. Over the next 75 years, average Social Security benefits would be 23 percent lower under the NCRP plan than under the current benefit structure, 16 percent lower under the Moynihan-Kerrey plan than under the current benefit structure, and six percent lower under the Ball plan. (This was posted on the internet by CRS.)
Right now, SS tax only applies to the first $62,000 , so it is very regressive. Your Congressman, for example, pays a rate about half of most working people. Simply removing the cap would eliminate the problem. So would raising the rate by 1%. These solutions are not part of the agenda though, and are not up for discussion.
Trudy Lieberman’s (January 27, 1997) article in the Nation described Social Security privatization … “not so much a movement as an attempted heist, robbing Americans of perfectly good social insurance.”

Republicans are still anxious to 'privatize' it.

Bibliography

The People's Pension: The Struggle to Defend Social Security Since Reagan, Eric Laursen

Why are Democrats losing the Social Security Issue ?

Four Analytical Papers on Preserving and Strengthening Social Security

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