A President Who'll Cut Social Security - And Liberals Who Love Him Too Much 8MAR13

PRES OBAMA'S plan to cut Social Security benefits by imposing chained CPI on the program is a disgrace. He is turning against some of the people who need this program the most. If he is concerned about the fiscal viability of Social Security he should be proposing lifting the cap on the Social Security tax and impose means testing for Social Security benefits. Do the rich, for arguments sake say anyone with a retirement income over $200,000, need to receive Social Security? Once again Pres Obama is showing the nation, and the people who reelected him, that he is the great deceiver, morally bankrupt and spineless. What a disappointment! E mail the President and tell him you oppose his chained CPI proposal at http://www.whitehouse.gov/contact/submit-questions-and-comments and let your Representative http://www.house.gov/representatives/find/ and Senators http://www.senate.gov/general/contact_information/senators_cfm.cfm know you expect them to reject any legislation that includes implementing chained CPI to Social Security.  My e mail to Pres Obama,  Rep Gerry Connelly D VA and Senators Tim Kaine D VA and Mark Warner D VA at the end of this post. From HuffPost.....

The spectacle of a supposedly liberal President repeatedly and needlessly trying to cut Social Security is enough to bring a reasonable, economically literate person to the point of existential despair. To see leading liberal lights like Rachel Maddow and Ezra Klein chuckle indulgently at those foolish Republicans in Congress over the subject - Don't they know he's already giving them what they want? - is to risk plunging into the depths of that despair.

This week the President hosted a dinner for Republicans leaders where he worked to sell his budget proposal, including his harmful plan to cut benefits through the "chained CPI." National Security was the main course and Social Security was the dessert.  And guess who wasn't coming to dinner: The elderly, the disabled, or any policy experts who understand the disastrous implications of the chained CPI.

The Maddow/Klein exchange (which we'll bring to you as soon as a transcript is available) is the crest of a building wave in pro-Democratic Party commentary which says, as Klein puts it, that "what we have here is a failure to communicate." Klein says that at least "some of the gridlock (in Washington) is due to poor information." Jonathan Chait bemoans the fact that Republicans "won't acknowledge (Obama's)actual offer, which includes large cuts to retirement programs."

Silly, silly Republicans. Klein quotes one reporter as saying of the White House, "They tell us three times a day that they want to do chained CPI!"

That's right: The White House has been trying to impose this benefit cut on Social Security's elderly and disabled recipients for years, and Republicans don't even know.  Neither do most Democrats, for that matter. They think they voted for a President who will defend those benefits, not work relentlessly to cut them.

But Democrats like Maddow, Klein, and Chait know better. They know exactly what Obama's been trying to do.  And their only complaint seems to be that he's not doing effectively enough. We're not hearing much from the 'left' side of the debate about the profound flaws, biases, and inherent cynicism behind both the President's policy and his rhetoric.

Here are the facts:

1. Research suggests that Social Security cost-of-living increases are already inadequate. (See studies on "CPI-E" for more details on the best ways to increase them.)
2. Obama's proposed chained-CPI cut would typically reduce benefits for 3 percent, and by as much as 6 percent for some recipients.
3. The White House's decision to label this cut the "superlative CPI" is grotesque. It suggests that elderly women who receive an average of $950 or so per month are receiving "superlative" benefit increases each year.
4. The Administration's insistence on speaking of "entitlement reform," mixing Medicare (which has a real cost problem because of our for-profit health system) with Social Security, is a cheap trick first devised by Republican consultants.

Progressive commentators - or neutral but well-informed observers - should be emphasizing these points. Instead we're hearing that the President's opponents are foolish for not knowing the President agrees with them! Each of MSNBC's major personalities has developed his or her own personal brand of eye-rolling at Republicans. In this case we're told that Republicans are stupid for not knowing the details of Obama's budget proposal - especially his planned cuts to Social Security and Medicare.

Stupid? Stupid like a fox - or, if you prefer, like a Fox News Network.  By feigning ignorance of the President's plan, they're forcing the White House to repeat it over and over: We want to cut Social Security, guys! We want to cut Medicare!

"They tell us three times a day ..."

Surprisingly, both Maddow and Klein buy into the implausible premise that Senate Republicans, each of whom have large staffs and access to Republican Party employees, literally don't know that Obama has offered to cut Social Security as part of a Grand Bargain.  As a result of their feigned ignorance, the White House is now reiterating that offer, repeatedly and publicly.

"Obama renews budget offer to cut social safety nets," says a typical story on this subject fromReuters.

This is shaping up to be quite a victory for the GOP. Unless something changes, they're about to see a core Democratic program cut - and the Democrats will take the heat for it! The only thing that can stop that outcome is concerted public pressure from the Democratic base.

That's what makes the Maddow/Klein school of partisanship so tragic in this instance: By reducing this disastrous idea - the product of all the "buy-partisan" cash being spread among leader of both parties - they're defusing political blowback from the party's base. Public pressure from Democratic voters could stop this headlong rush into a decision that will harm America's seniors and disabled - and save their party from a potential political catastrophe.

Maddow, Klein and others know - or should know - that Social Security doesn't contribute to the deficit. They know - or should know - how politically damaging this move would be. They know - or should know - how much it would harm seniors. They should be demanding that the President defend the program, while forcing his opponents to attack it.

Instead they're applauding him for doing the dirty work himself, and criticizing his shrewd opponents for their lack of public gratitude.

How short can a Democrat's memory be? The Republicans regained the House in 2010 by forcing Obama to make these offers, albeit far less publicly than he's doing now. Then they ran to his leftwith a fraudulent "Seniors' Bill of Rights," after ensuring that the Democrats' polling on this issue plunged by a startling 25 points. (At the time Obama was less trusted than George Bush on Social Security, despite Bush's attempt to dismantle and privatize the program).

Now the Republicans are outplaying the President once again. They're exposing his agenda on Social Security, an agenda which became evident when he appointed anti-Social Security pitchmen Alan Simpson and Erskine Bowles to lead a 'deficit commission' shortly after his election. Now, in a form of media-related collateral damage, this strategy may also wound the credibility of commentators like Maddow and Klein.

Jonathan Chait asks, "Would teaching Republicans about Obama help?" Not nearly as much as teachers voters about Obama's proposal would hurt. The President's Social Security proposals are deeply misguided, both as policy and as politics, and this flattering commentary is deeply damaging.

As part of their long game, Sen. Lamar Alexander and the GOP issued a press release entitled "If the History Books Were Written Today, We Would Remember President Obama for the Sequester."

They know that's not true. Of course the President won't be remembered for the sequester. If things don't change, we'll remember President Obama for cutting Social Security - and his party will pay the price.  Disabled and elderly Americans will pay an even higher price. And the Republicans will be laughing all the ways to the polls in 2014.
http://www.huffingtonpost.com/rj-eskow/a-president-wholl-cut-soc_b_2835274.html?utm_source=Alert-blogger&utm_medium=email&utm_campaign=Email%2BNotifications 


I am outraged Pres Obama has offered to impose chained cpi to the republicans as a concession in the ongoing budget negotiations. He is willing to sacrifice the least among us, the poor, elderly and retired, willing to cut their much needed benefits, while leaving the rich unscathed. This proposal is immoral and I expect you to reject ANY legislation that includes it. Concerns about the fiscal viability of Social Security should be addressed by lifting the cap on Social Security taxes and by imposing means testing on the rich who actually sign up to receive Social Security benefits. Really, does anyone with a retirement income over $150,000 need to
receive Social Security? NO! Again, I expect you to reject any legislation that includes imposing chained cpi on Social Security.

For the Last Time, the Social Security Trust Fund Is Real 14DEZ12

AGAIN and again the American people need to be reminded that Social Security is solvent and doesn't contribute to the federal debt (the author claims it does, with a credible argument. It wouldn't if the federal government actually taxed the rich and corporations so they paid their fair share, ended corporate tax loopholes and corporate welfare AND enacted means testing so that those retired with incomes over $250,000 would not be able to to collect). From Mother Jones....

—By Kevin Drum

Social Security Administration

Does Social Security contribute to the deficit? Is the Social Security trust fund a fiction? I've taken a crack at explaining both of these things before, but I've never really succeeded. The truth is that it's complicated. So today I'm going to try again. I figure I'm bound to hit on a formulation that makes sense eventually.
First things first: Social Security is funded via a payroll tax on all income up to $110,000. You pay 6.2 percent and your employer pays 6.2 percent. These numbers were set by the Social Security Reform Act of 1983, and for the next three decades payroll taxes provided more money than was needed to pay out benefits to retirees.
Now, suppose this surplus had been invested in corporate bonds. What exactly would that mean? It means that workers would be giving money to corporations, who would turn around and spend it. In return, the Social Security trust fund would receive bonds that represent promises to repay the money later out of the company's cash flow. In effect, it gives workers a claim on the cash flows of the company at a later date in time. When that time comes, the company would have to pay up, which would make it less profitable. If the company was already unprofitable, it would make their deficit even worse.
If that's what had happened, there would be no confusion about the trust fund. Everyone agrees that corporate bonds are real things, and that the corporations who sell them have an obligation to pay them back, even though it means less money for shareholder dividends.
Now let's change a few words in this story. What actually happened is that the Social Security surplus was invested in treasury bonds. What does that mean? It means that workers gave money to the federal government, which turned around and spent it. In return, the Social Security trust fund received bonds that represented promises to repay the money later out of the federal government's income tax receipts. In effect, it gave workers a claim on the income tax receipts of the government at a later date in time. When that time came, the federal government would have to pay up, which would make it less profitable. If the government was already running a deficit, it would make the deficit even worse.
These two stories are identical. Treasury bonds are real things: They are promises to repay money at a later date out of the government's cash flow. The federal government has an obligation to pay them back even if it has to raise income taxes to do it.
That's where we are today. Payroll taxes are no longer enough to cover payments to retirees, so Social Security is cashing in the treasury bonds in its trust fund to make up the difference. Those bonds, which were purchased with the payroll taxes of workers, represent a promise of repayment from the income taxpayers of America, and that promise is every bit as real as a promise from the board of directors of a corporation. But the money is real too, which means that paying it back makes the federal deficit even worse than it already is. To cover that deficit, our only options are to either (a) raise income taxes or (b) sell new bonds to outsiders, thus increasing the net public debt.
So: Does Social Security contribute to the deficit? Yes. Is the Social Security trust fund a fiction? No. Does everything make sense now?

Kevin Drum

Political Blogger

Kevin Drum is a political blogger for Mother Jones. For more of his stories, click here. RSS | Twitter

If You Liked This, You Might Also Like...

• The World's Easiest Plan to Rescue Social Security

• Social Security's Problems Are 20 Years Away, Not 75 Years

• How Social Security Can Save Us All

  Bush failed to privatize Social Security. Now it can help to rescue the economy.

• Dick Durbin Wants to Make a Deal on Social Security

http://www.motherjones.com/kevin-drum/2012/12/social-security-trust-fund-is-real

Obama Publicly Backs Means-Testing Medicare 15JUL11

THE devil will be in the details. What income level will trigger means testing? This sounds good, but this administration has shown it can not be trusted on these issues until all the details are known. And I am still opposed to raising the eligibility age for Medicare. From HuffPost.....
WASHINGTON -- President Barack Obama formally acknowledged on Friday that he would support a plan to means-test Medicare as a part of a deal to raise the nation’s debt ceiling.
“I have said that means-testing on Medicare, meaning people like myself -- I’m going to be turning 50 in a week, so I’m starting to think a little bit more about Medicare eligibility -- but you can envision a situation for somebody in my position, me having to pay a little bit more on premiums or co-pays would be appropriate. And again, that would make a difference,” the president said at a press conference. “What we are not willing to do is restructure the program in the ways we have seen coming out of the House in recent months.”
The comment was the first public acknowledgement from the White House that the president would support changing the payment structure of the entitlement program. Prior to Obama’s remarks, multiple sources in both parties told The Huffington Post that the administration was making it clear to debt ceiling negotiators that such a structural change to Medicare was on the table.
The proposal is not entirely controversial among health care economists. But it will rankle a good chunk of the president's own party, which has sought to keep Medicare's structure as a basic insurance program as opposed to a welfare-like model. Making top earners pay more into the system than their moderate to lower-income counterparts may seem like sound, balanced policy -- but it also makes Medicare's finances vulnerable to future budget slashing or tax-reducing campaigns.
The Obama administration's embrace of the idea came during talks between lawmakers and Vice President Joseph Biden. The exact contours of what was proposed are not entirely clear. But a version that House Majority Leader Eric Cantor (R-Va.) proposed in later discussions would have saved the government an estimated $38 billion by charging those high-income beneficiaries 10 percent more for the cost of hospital stays and prescription drugs.
Obama's nominal support for means-testing Medicare, however, does fit into the larger outlines of his plan for the debt ceiling debate. In an effort to both win the support of Republicans and tackle as many deficit-contributing issues as possible, the administration has placed entitlement programs like Social Security and Medicare ("sacred cows" for the Democratic Party) squarely on the table. The president also lent his support to a plan to raise the eligibility age of Medicare from 65 to 67, over the course of roughly 25 years. His team has, additionally, discussed various changes to the way in which Social Security benefits are measured and paid.
Both of those ideas encountered immediate push back within Democratic and even moderate Republican circles. Means-testing Medicare has more political support. Rep. James Clyburn (D-S.C.) a top-ranking Democrat in the caucus, has embraced the idea, as have the party's more fiscally conservative members. In the past, the administration too has embraced the idea. The president's own health care law placed a small tax increase on the wealthiest Americans, a fee that could, theoretically, be considered a form of means-testing. And in his 2009 budget, the Obama administration suggested means-testing the prescription drug portion of Medicare.

A request for comment for this article was not immediately returned by an administration aide.

Obama Aide On Social Security Cut Story: It 'Overshoots The Runway' 7JUL11

SOCIAL SECURITY CAN NOT BE PART OF THE BUDGET CEILING NEGOTIATIONS, THE PROGRAM IS NOT PART OF THE FEDERAL DEBT PROBLEM! President Obama and the Democratic Party will find themselves in dire straits if they dare give in to the greed of the gop and tea-baggers and raise the retirement age or cut benefits to the poor, working class and middle class. Means testing for Social Security is acceptable only if applied to the wealthy who also receive Social Security. The only change in funding of the program that should be implemented is lifting the cap on Social Security taxes on the wealthy so all income is subject to the tax. From HuffPost.....
WASHINGTON -- The Obama administration is pushing back against a Wednesday night report that the president is prepared to offer cuts to Social Security as part of a deal to raise the debt ceiling.
"The story overshoots the runway," said a senior administration official. "The President said in the State of the Union that he wanted a bipartisan process to strengthen Social Security in a balanced way that preserves the promise of the program and doesn't slash benefits."
"While it is definitely not a driver of the deficit," the official added, "it does need to be strengthened."
The response, sent via email to The Huffington Post, provides a measure of assurance to Democrats who were taken aback by the abrupt news, broken by the Washington Post, that Social Security reform was now on the debt-ceiling table. Still, the devil is in the details, and the idea of "strengthening" the entitlement program remains the vague standard for reform.
Making Social Security means tested, for instance, could be pitched as a way to improve the program's solvency, even if doing so would drastically undermine its founding purpose, as some experts warn.
There are also several smaller alterations that have been proposed. Last week, advocates expressed concern over news that lawmakers were considering changes to the way the government calculates the rate of growth for benefits people receive.
Confusing the debate even more are the political implications of putting Social Security or any other entitlement reform at the heart of debt-ceiling negotiations. Democrats believe they can use Republicans' votes for a Medicare voucher program earlier this spring as a potent political weapon. But by signing off on cuts of their own -- the thinking goes -- Democrats would lose any political advantage they've gained by saying they are protecting Medicare while the GOP is trying to fundamentally change or do away with the program.

How Raising The Retirement Age Screws the Poor 13MAI11

BOHICA AMERICA!!!! Here's what the tea-baggers and gop have planned for the poor, working class and middle class....from Mother Jones....

I've never been a fan of raising the Social Security retirement age. It's a blunt instrument mainly favored by journalists and policymakers who don't plan to retire at age 65 anyway and figure that asking people to work a little bit longer than they used to is no big deal. But people who don't have white collar jobs quite plainly don't feel the same way about it, as the skyrocketing number of people who retire early at age 62 demonstrates. We've already raised the full retirement age to 67 (this was part of the 1983 Social Security deal put in place by the Greenspan Commission), and I think there are plenty of better ways of bringing Social Security into balance than by raising it yet again.
Aaron Carroll demonstrates this dramatically with the chart below, taken from a paper by Hilary Waldren. As you can see, life expectancy in the top half of the income distribution has indeed risen dramatically over the past few decades. But in the bottom half of the income distribution, it's barely risen at all.
I want to make it crystal clear what this means, using further data from Waldren's paper combined with the increase in retirement age that's already scheduled to take effect. This is for workers in the bottom half of the income distribution:

• If you retired in 1977 at age 65, your life expectancy was 14.8 years.
• If you retired in 2006 at age 65 years and 8 months, your life expectancy was 15.4 years.
• Using a simple linear extrapolation, if you retire in 2025 at age 67, your life expectancy will be 14.9 years.

So that's it. Over the course of half a century, thanks to the increase in retirement age already scheduled by law¹, the poor and the working class will have seen the length of their retirements increase by a grand total of one month. Yippee!
Keep this firmly in mind whenever someone talks about how life expectancies have skyrocketed and we can't afford long, leisurely retirements anymore. If you're fairly well off and work at a white collar job, there's something to this. If you're not, it's bunk.
If you want to use rising life expectancy as an argument for means testing Social Security, or perhaps for reducing benefits for high earners, the data here gives you some good ammunition. Personally, I'm not sure this is the best way of tackling Social Security solvency either, but it's certainly an arguable point. Maybe modest means testing should be part of a bigger solution.
But raising the retirement age? Go tell that to a clerk or a factory worker. They won't be quite as thrilled about this as people who write newspaper columns for a living, and they have pretty good reason not to be. It's a lousy idea.
¹You can still take early retirement at age 62 no matter what year you retire, but you get reduced benefits — and those benefits are being gradually reduced even further as the full retirement age goes up. Actuarially, early retirement doesn't change a thing. If you're in the bottom half of the income distribution, the total expected payout of your Social Security benefits will have risen by one month's worth between 1977 and 2025 no matter what age you choose to retire.
Front page image: Celine Nadeau

If You Liked This, You Might Also Like...

• Fun With Charts: Making the Rich Look Poor

• Tax Day Charts!

• A Simple Look At Income Inequality