CNN forgot to connect the dots on this one, and it should have. It would have brought a dose of reality to Simpson’s latest remarks. What would happen to real people if the retirement age were raised to seventy? The week before, CNN Money ran some brief but interesting and revealing profiles of eight people who took their Social Security benefits early. Running through them was a common thread: many had no choice. They had lost their jobs, couldn’t find new ones, and needed the benefit, even a drastically reduced one, to live on. A sixty-two-year old woman said she and her husband had planned to wait until he turned seventy to collect benefits, “but I doubt we’ll make it.” A man and his wife who had white collar jobs in the auto industry hoped to take full benefits at age sixty-six; instead, they have to take them now to make ends meet. “It deeply saddens us to be in this position, but we have no choice,” they said.
It looks like Simpson is staying on the job. The White House said it was satisfied with the apology. But that still misses the point—Simpson’s long-standing antipathy toward Social Security and Medicare. All of which raises the question about why the president appointed him in the first place, something the media should have researched long ago. Retaining Simpson at the commission, loose tongue and all, is what the president apparently wants.
That in turn calls up another question. The AARP’s senior vice president, Drew Nannis, said Simpson’s remarks “undermine the serious work of the commission and give us little confidence the commission can fairly look at important programs such as Social Security.” On his blog, New York Times columnist Paul Krugman wrote that an apology was hardly the point: “When you have a commission dedicated to the common good, and the co-chair dismisses Social Security as a ‘milk cow with 310 million tits,’ you either have to get rid of him or admit that you’re completely, um, cowed by the right wing. Simpson was completely in character here; it was perfectly consistent with everything else he’s said.”
Simpson may stay on, and that means the press still has a chance to cover him more closely—and tell its audiences what’s really behind his “colorful language” and “off-color” remarks.
Click here for more from Trudy Lieberman on Social Security and entitlement reform.
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Is this a case of Kinsley's Rule about a 'gaffe' being a statement that is true, but impolite to say in our media-political echo chamber? Lieberman refers to 'the commission', but doesn't explain to readers what it is - a commission charged by the White House with keeping Social Security's Ponzi-scheme aspects from bringing it down.
FDR was once credited by his apologists for 'saving' capitalism, the context being that the capitalists gave him insufficient credit for doing so. Apparently, the same logic does not register when reforms are sought to save the welfare state from itself.
I don't know how much Lieberman gets around, but among younger people, cynicism about the condition of Social Security after the baby boomers are done with it is quite widespread, i.e., "There won't be enough left when we get old to pay us back what we put into it". Lieberman may agree or disagree with that prediction, but the question is legitimate. Many people need Social Security - having known they would receive it in old age and perhaps planned accordingly. Many people do not. If there are people who need it, why keep the fig leaf that it is an 'insurance' program, and admit that it is a program for the poor, and reform it accordingly? And in terms of Carson's framing in the Huffington Post, well, all transfer payments benefit somebody - at somebody's else's expense, to be sure, and you can always find people for whom dire outcomes are made at any proposal to change or abolish it in its present form. Didn't we hear the same stuff during the debate over welfare reform in 1996?
In this case, to put it in terms liberals can understand, 20-year old Hispanic dishwashers are paying almost 8% of their paychecks right off the top (and their employers another 8%) so that a substantial number of 65-year-olds who are likely to have private pensions and own their own homes can tool around the country in Winnebagos. You don't have to be Alan Simpson to see that something's askew. Same situation, BTW, in never-never western Europe, which faces a demographic nightmare thanks to low birth rates.
#1 Posted by Mark Richard, CJR on Thu 26 Aug 2010 at 04:22 PM
A "means test" might be good for Social Security and Medicare. Simpson is being blunt and realistic. It is AARP that needs straightening
#2 Posted by Mike Robbins, CJR on Thu 26 Aug 2010 at 05:30 PM
A "means test" might be good for Social Security and Medicare. Simpson is being blunt and realistic. It is AARP that needs straightening
#3 Posted by Mike Robbins, CJR on Thu 26 Aug 2010 at 05:31 PM
Alan Simpson must be related to Bart Simpson. Are you serious!? How about making up the deficit by not voting any more pay raises for politicians.
I paid into Social Seurity for years because it was mandatory. Too bad I wasn't able to put it into a shoe box under my bed. It's more horse pucky as usual. www.pam-horsepucky.blogspot.com
#4 Posted by Pamela Beers, CJR on Thu 26 Aug 2010 at 06:17 PM
NY Times seems to let things be despite Simpson's remarks. Who's worse--He talking about getting rid of Social Security or the Tea Party that wants all taxes demolished except those that cover Medicare and Social Security which many don't realize they have been paying into and that it's not the hospital's treasury that covers their bills but all of us. Would Simpson really do a lot better if he didn't have his Federal pension and health insurance from the time he served? or does that not count??? Others today seem to think no one is calling for Social security to be dropped. Factscheck.com stated that Obama was wrong to say that about Republicans in one of his interviews for TV. Yet time and again Republicans claim to want to get rid of Social Security and Medicare but then they seldom do--not even a bill up to be voted on. So even those who claim neutrality can't seem to see through the haze of Republican doublespeak.
#5 Posted by Patricia Wilson, CJR on Thu 26 Aug 2010 at 07:11 PM
Nice sob stories, but SS remains a transfer from workers who are relatively less affluent to the elderly who are relatively better off. No one denies there are some elderly who rely on SS (who knows what they spent their $$ on for 40+ years), but for me SS has bred resentment of the gov't., not "social solidarity". Maybe if the gov't. didn't confiscate ~$13K/yr. from me for the direct benefit of recipients, didn't obscure its true cost to me by only directly reporting half of it on the FICA line of my paycheck, didn't exempt it from normal budgeting by funding it through a separate tax on my pay, didn't historically buy votes from current beneficiaries by burdening future taxpayers with no voice, didn't assault the middle class by increasing contributions ~2.5X faster than inflation, then maybe I'd feel some social solidarity.
#6 Posted by David, CJR on Thu 26 Aug 2010 at 09:45 PM
I get the point that Lieberman disagrees with Simpson's politics, and that's fine. But what does that have to do with journalism?
#7 Posted by Tom T., CJR on Fri 27 Aug 2010 at 01:18 AM
The deck stacking that Obama did with this bullshit commission is enough to make anyone concerned with the direction of our country's social net are either from the radical right liar factories financed by billionaires like the Koch brothers or from those not old enough to see what Social Security, Medicare, and Medicaid have done to aid in the final years of older citizens.
This anti-Social Security rhetoric has resurfaced every generation for the past 70 years. It merely regurgitates the same, sorry nonsense that began with the anti-Roosevelt crowd in the 30's that berated it and other programs for the non-wealthy as socialism in its worst form. It angers this group that even Eisenhower found them repulsive because it's popular and it works.
If anyone is serious about lowering the deficit, stop picking on those who need government help the most and start examining something that is truly a waste of taxpayers money like the amount of money paid into the pensions of former blowhard Congressmen such as Alan Simpson and his ilk.
That would be a good start to show that any of these so-called fact finding commissions is serious about anyone other than themselves.
#8 Posted by dpjbro, CJR on Fri 27 Aug 2010 at 10:52 AM
Lieberman neglects to say anything about what she would do to control entitlement spendinng. And I agree with "But what does that have to do with journalism?"
#9 Posted by Andrew Terhune, CJR on Fri 27 Aug 2010 at 11:00 AM
You cant spell entitlement without "tit". Simpson should have dispensed with the pleasantries and told Ashley Carson to go f#$k herself.
#10 Posted by Mike H, CJR on Fri 27 Aug 2010 at 11:52 AM
To keep Social Security afloat, remove the cap on FICA. It's that simple.
To reduce the deficit...
-Quarter Congressional pay and the President's pay. The lot of them are filthy rich anyway; they won't miss it.
-Stop giving handouts to big business. This eats up more than public assistance for the bottom 20% ever will.
-Do what we should have done by 1950, which is to pull out of every foreign country and reduce the size of our military force to where it cannot be used for any operations elsewhere.
#11 Posted by CVF, CJR on Fri 27 Aug 2010 at 12:11 PM
Trudy, please keep these articles coming. You are in the EXTREME minority in your accuracy of reporting on Social Security. Please never let up. These comments seem to be very negative, so I wanted to let you know all Americans who support Social Security deeply appreciate your stories. Keep up the good work.
#12 Posted by Jamie, CJR on Fri 27 Aug 2010 at 12:13 PM
Trudy, please keep these articles coming. You are in the EXTREME minority in your accuracy of reporting on Social Security. Please never let up. These comments seem to be very negative, so I wanted to let you know all Americans who support Social Security deeply appreciate your stories. Keep up the good work.
#13 Posted by Jamie, CJR on Fri 27 Aug 2010 at 12:15 PM
Senator Alan Simpson, you should never forget the power of OLD people especially ones that you have belittled and made snide remarks about, They have the power of the vote and the power to influence younger voters.
If I lived in Wyoming, you would see me out telling everyone just what a OLD IDIOT you are.
Course you dont have to worry about aarp lunches or senior discounts, your living high and fancy on OUR TAX money, which I might add up to this date has been paid in by us OLD citizens and which you will live on when you lose your office and which your family will use to bury you when you die, the moneys paid in by us OLD people.
#14 Posted by Arline Hendricks, CJR on Fri 27 Aug 2010 at 01:06 PM
You don't need a means test, all you need to do is tax the Social Security benefits of the supposedly undeserving rich. Simple.
#15 Posted by Leonard Boasberg, CJR on Fri 27 Aug 2010 at 04:38 PM
There's no reason for a "cutoff" income for FICA taxes. To put it in terms that Mike Richards can understand--why should a 20-year old hispanic dishwasher pay at a rate four times higher than the rate paid by some consultant making $500,000/yr ?
#16 Posted by Bob Gardner, CJR on Fri 27 Aug 2010 at 06:42 PM
Remove the CAP. Simple Math.
Bob Gardner is correct.
Simpson is a world class A^(hole from the dark ages.
He should go and for the life of me why he was appointed to anything is beyond MENSA comprehension.
#17 Posted by Curtis Walker, CJR on Fri 27 Aug 2010 at 11:21 PM
Because, Bob Gardner, Social Security was sold as an insurance program, not a welfare program. According to its advocates, SS payments are like insurance premiums - so the tax is uniform (7.65% each on employee and employer) like insurance rates. It has a cutoff because it was not peddled as a wealth redistribution plan, a progressive income tax. We already have those. It was peddled as a universal insurance plan. If you remove the cap, then what you have is just another progressive income tax. The consultant already pays much higher income tax rates than the dishwasher. The dishwasher gets the regressive tax - peddled by people calling themselves progressives! - because SS is intended to bring in everyone, as both a premium-holder and as a recipient. Anything else you need explained?
#18 Posted by Mark Richard, CJR on Sat 28 Aug 2010 at 07:36 AM
Bob Gardner wrote: why should a 20-year old hispanic dishwasher pay at a rate four times higher than the rate paid by some consultant making $500,000/yr
padikiller wonders: Why are so many liberals so racist?
What does race have to do with this issue?
Who says all dishwahers are Hispanic?
#19 Posted by padikiller, CJR on Sat 28 Aug 2010 at 08:17 AM
Tom, Andrew--What is has to do with journalism is that the major media is depicting this as a battle between an feisty old coot and some offended ladies, while totally ignoring the fact that the co-chair of the commission meant to decide the fate of Social Security HATES Social Security and everyone who relies on it.
#20 Posted by Julie, CJR on Sat 28 Aug 2010 at 04:14 PM
A good article, Ms Lieberman, which does get to the major dysfunction of Mr. Simpson in his role as a co-Chair of the so-called Deficit Commission. There is one serious flaw in your report that needs correction. "Simpson represents those who don’t like the program’s income redistribution and wish it would disappear."
Benefits to social security recipients are in no way a form of income redistribution. Evey beneficiary paid into the system throughout his/her working life and the actual size of the benefits paid are based upon the amount of the contributions made over that working life.
#21 Posted by Jack, CJR on Sun 29 Aug 2010 at 12:26 AM
"but doesn't explain to readers what it is - a commission charged by the White House with keeping Social Security's Ponzi-scheme aspects from bringing it down." Mark Richard
Simpson is passing around enough misinformation. He doesn't need the comment above to assist him. The Commission is as its title says and the White House press release describes:
"The bipartisan National Commission on Fiscal Responsibility and Reform will build bipartisan consensus to put forth solutions to tackle our long-ignored fiscal challenges."
It's charge is to:
" * The Commission will make recommendations that put the budget in primary balance so that we are paying for all operations and programs for the federal government (achieving deficits of about 3 percent of GDP) by 2015 and meaningfully improve the long-term fiscal outlook."
Note that there is no singling out of Social Security as a focus of the Commission's interest in spite of the assignment of well established Social Security dissemblers to the task. Also note that Social Security does not contribute to the deficit. The program has almost always been in a positive cash flow position and the excess FICA collections over the years, that make up the Trust Fund, had always been intended to cover short falls when they might occur. In effect it is one of the government programs to "put away a little extra for a rainy day" as was always part of the legislative requirement of the system.
The Trust Fund assets have been helping the general budget for many years now inn the face of unrelenting abuse by wasteful wars of empire and misadventure and unwarranted tax holiday for the wealthiest Americans. Now people like Simpson and Peter Peterson want to revise the script and suggest that it is the other way around, and that the Trust Fund Treasury notes need not be honored if only because they would rather spend the FICA contributions on those same abusive expenditures.
#22 Posted by Jack, CJR on Sun 29 Aug 2010 at 12:42 AM
"Lieberman neglects to say anything about what she would do to control entitlement spending. And I agree with "But what does that have to do with journalism?" Andrew Terhune
Andrew, Are you really that stupid? First, it has everything to do with journalism to report the facts of a situation when a significant member of a public commission demonstrates an abuse to the system he should be serving in an objective manner.
Secondly, the budget would be far better balanced if the Congress cut back on wasteful discretionary spending like unwarranted wars in Iraq and Afghanistan. Having given the wealthiest Americans a significant tax holiday over the past eight years was also wasteful. And Mr. Simpson's governemt pension is certainly wasted money.
#23 Posted by Jack, CJR on Sun 29 Aug 2010 at 12:50 AM
Padkiller, the "20-year old Hispanic dishwater" is Mark Richard's example, from the first comment in this thread.
Are you calling me a racist, or Mark Richard a liberal?
#24 Posted by Bob Gardner, CJR on Sun 29 Aug 2010 at 10:22 AM
To Mark Richard,
When you talk about regulating the poor, through means testing, the concept of Social Security as an insurance program is "figleaf". But we can't eliminate the cap on FICA because we would be violating the sacred promise that Social Security is an insurance program.
Explain to me what happened to you between your first post and your last post. And explain what you did with that figleaf.
#25 Posted by Bob Gardner, CJR on Sun 29 Aug 2010 at 10:45 AM
To Bob, if you re-read what I wrote, I made it clear that the 'fig leaf' was that of Social Security's supporters. Why distinguish between the Social Security Trust Fund and any other federal income-transfer program? You don't, whether you realize it or not - you are the one trying to do what Social Security apologists oppose, which is to abandon the idea that the program is like any other insurance program, only universal. Social Security is the most regressive tax there is, something that should concern those genuinely sympathetic to low-income people. My mother still works (at 79), her job (delivering Meals-on-Wheels types of lunches to elderly shut-ins) is taxed at the 7.65% rate), and her Social Security payments, which are supposed to have been linked to her lifetime payments, are reduced according to how much she earns. No private retirement fund would do that.
#26 Posted by Mark Richard, CJR on Sun 29 Aug 2010 at 06:42 PM
First, considering the state of private pensions and retirement funds after the gambling binge of the 2000's, let's not talk about what private pensions would do. Let's talk about social security as a program which has produced a high level of satisfaction for about 50 years now and has collected trillions of dollars in surplus funds due to the Reagan/Greenspan fix of the program in the 80's.
The fact of the matter is that we would need no changes at all to the program if the stability of the finances were the sole issue considered. The program could be made self sustaining over the next century with few changes.
And the fact of the matter is that it has been a wealth transfer program, one that takes a significant percentage of working man and immigrant income and transfers it to richer and longer lived retirees. The poor have less of a chance (and immigrants have no chance) of collecting what they paid into it, especially when the retirement age keeps getting raised. The rich have longer lives and pay less of their income percentage into the program Their contributions to the program during their earning lives should reflect this.
But this aspect of social security is not what we are discussing here. The discussion carried out today is not about the fairness of the program as it currently exists, it's about the stability of the program's fundamentals. This is where conservatives are at their most vile.
Reagan took a program, which was paying out year to year benefits based on year to year revenues, and changed it into a surplus generating fund. Conservatives then allocated the money from that fund towards government expenses that would normally have been paid for by income taxes. They then fought for tax cuts, under the cover of supply side economics, and replaced lost progressive tax revenue with increased regressive tax revenue.
So, in that sense, Social Security was a wealth transfer program from the dishwasher and restaurant, who have to pay 12% FICA, to the richest money makers who got tax cuts and pay less than their secretaries on their capital gains.
But that money was pledged, it was paid on the premise of a future service rendered, That money was allocated by conservatives, therefore the question we are debating is whether that money was borrowed or stolen. If it was borrowed, then the government has to pay it back by increasing tax revenues. If it was stolen, then the fund is empty and there are criminals at large in the government who stole it on behalf of the top 5% of income.
http://www.cjr.org/the_audit/what_is_social_security_trust_fund.php
Either way, social security has always been more about income transfer and less about insurance.
The question we need to ask is whether the service it provides is worth the fight needed to protect it. We've already provided the sacrifices for it, but some vile people want to claim those sacrifices don't exist because they pocketed it.
That's not acceptable. The money needs to be paid back.
#27 Posted by Thimbles, CJR on Sun 29 Aug 2010 at 08:14 PM
For once I can disagree with all Thimbles' main points. It is an income-transfer program, not an insurance program. As such, it does present even its advocates with an aspect to which they, as responsible folks, need to take seriously: Social Security diverts money from savings and investment to present consumption, discouraging future economic growth. Private plans certainly have their ups and downs, too. But they are able to make adjustments much more flexibly than is Social Security, which is sold as a sacred trust to all Americans. You even get a 'projected benefits' update a couple of times a year. The great problem with political institutions, entitlements, etc., is their inflexibility, their slowness in reacting to real signals from the real world. If any naifs out there think that European welfare states have solved this problem, they should be aware that the weakness in the demographic assumptions of policy makers over there is keeping them awake nights; almost no one believes that, 20 years from now, Europe is going to be as powerful an economic force than the U.S. or China.
#28 Posted by Mark Richard, CJR on Tue 31 Aug 2010 at 12:06 PM
Oops, I meant 'agree' with Thimbles. The old habit of disagreeing was strong enough to produce the typo.
#29 Posted by Mark Richard, CJR on Tue 31 Aug 2010 at 12:07 PM
"Social Security diverts money from savings and investment to present consumption, discouraging future economic growth." Mark Richard
That's a remark indicating total ignorance of the mechanics of the Social Security program. it is, as its name implys, similar to an insurance program, especially inn that it has a disability protection aspect. It is primarily a legislatively required investment program, though the investment is aimed at one's old age financial stability. Those payroll deductions aren't labeled FICA for no reason(Federal Insurance Contribution Act).
"Private plans certainly have their ups and downs.." How much of an understatement is that? Try measuring market performance in the past twenty years. It's a sorry record for those with enough income to invest for their personal nest egg. For most working Americans the job doesn't pay quite enough to allow for any such private plan. And what private businesses are continuing to offer any pension program to their workers. There's no golden parachute for the general employees. Even the Federal employees' pension plan now includes Social Security as a part of the program.
Mark, you're passing out misinformation that evidences either your ignorance or deceit. Anyone looking for a more full discussion of the Social Security issue might do well to lionk over to AngryBear for more accurate detail
sorrounded by some Mark Richard obfuscation.
http://www.angrybearblog.com/2010/08/why-is-social-security-under.html
#30 Posted by Jack, CJR on Tue 31 Aug 2010 at 03:46 PM
Jack, I'd like a specific example of 'obfuscation and deceit'. Your link will guide readers to a website that is long on rhetoric and short on, well, numbers. Private pension plans take care of far more retirees, in far greater numbers, than does Social Security - everyone working dreads becoming entirely dependent on Social Security in old age, possibly including 'Angry Bear', even yourself. At that, SS was only intended as a supplemental device.
Are you really asserting that Social Security is not a pay-as-you go program funded from present FICA taxes? A private insurer would go to jail for that practice. If you really believe that SS operates the same as any insurance plan, I'd be careful if I were you about tthrowing around words like misinformation and deceit. And public-sector employees have stoutly resisted being brought into Social Security, fighting instead for their PERS program - you must be misinformed. I'll be more charitable than you, toward me, in characterizing it that way.
#31 Posted by Mark Richard, CJR on Tue 31 Aug 2010 at 05:51 PM
"Private pension plans take care of far more retirees, in far greater numbers, than does Social Security"
I would be careful about making claims like this. You're going to have to show some reputable numbers.
"everyone working dreads becoming entirely dependent on Social Security in old age, possibly including 'Angry Bear', even yourself."
True, social security is meant to be a supplemental but let's not forget its fundamental concept, security. It is meant to be a guaranteed benefit that is independent of market performance and individual fallibility. You may not be able to count on your 401k, your employee benefits and pensions, the guesses of your broker, the value of your house, or your health, but you can count on social security.
So we should stop making false comparisons between market based retirement income and social security because they are fundamentally different - market based RI carries the potential of higher reward coupled with a higher risk of failure. Social Security, as designed today, does not fail so long as the money it has amassed is made available when it's required. This is what the real fight is about - who is going to pay back all that money we gave away in Reagan era / Bush era tax cuts? As I mentioned before, It's not going to be a huge amount of money:
http://www.cjr.org/campaign_desk/social_security_in_perspective.php
But people like Pete Peterson don't want to ever pay back their hard earned government bailouts. People like Pete Peterson want to lie about the fiscal state of the country and fund propaganda and commissions so they can escape their obligations to fund the safety net because to them, people who can't stop falling aren't worth catching anyways. People like Pete Peterson, and his partner at Blackstone, think being asked to meet the minimum standards of human decency is akin to Hitler asking for Poland.
http://www.newsweek.com/2010/08/15/schwarzman-it-s-a-war-between-obama-wall-st.html
At some point, we have got to stop taking these people's advice. They make money for themselves, not for the general society, not even for their investors as recent years have shown.
They care about themselves, their bonuses, not the market nor the people destroyed within it.
When people like that run amok, it is more important than ever to have a guaranteed security. Decide. Is social security, with all of it's faults and regressive funding, providing a service worth maintaining? Because, if it is, you are going to have to fight the cheap labor, greed is good, conservatives who want to destroy it.
#32 Posted by Thimbles, CJR on Tue 31 Aug 2010 at 08:11 PM
Mark,
My comment is self sufficient in regards to your criticisms. The SS program is multi-dimensional having both a retirement aspect and an insurance disability aspect. Private pension plans are nearly a thing of the past. Personal savings plans, like an IRA or a 401K, are subject to market variability, and variable they have been these past twenty years.
Social Security is pay as you go only in so far as the FICA revenues can cover the benefits paid and the Trust Funds assets are intended, and have always been intended, to cover any deficiency that may occur on an on going basis. Those TF assets are held on account by the Treasury and accounted for in the form of special, non-negotiable Treasury notes. Those assets earn interest at a legislatively set rate.
The need to repeat all of this to you is evidence off your obfuscatory approach to discussing Social Security and its role in the general economy.
#33 Posted by Jack, CJR on Wed 1 Sep 2010 at 02:47 PM
To Thimbles, the most recent (quick research) break-out I have of the sources of income for people 65 or over is a GAO report from 2000. Old, but suggestive. Social Security accounted for 37.6% of the income of this age catgory. The rest of the income came from pensions, earnings (people have to work even while receiving Social Security), income from assets (dividends, rents, or businesses) and investments. I should have said, as was the intention of my main point, that private sources account for more of the income of the elderly than does Social Security.
To Jack, you basically agree with my point that Social Security is pay-as-you-go through present FICA revenues - and then accuse me of obfuscation. Sometimes in debate, the issue isn't disagreement on the facts, it's just disagreement over whether the facts are a 'good' thing or a 'bad' in their effects. I repeat that any private insurer using these practices - unfunded liabilities - would be prosecuted. Obfuscate that.
#34 Posted by Mark Richard, CJR on Wed 1 Sep 2010 at 05:03 PM
"....unfunded liabilities - would be prosecuted. Obfuscate that."
You continue to prove my point with each additional comment. Unfunded? Do you mean, as in so many worthless IOUs? What do you think the Trust Fund assets were intended to do? You keep disregarding the fact that the program is working exactly as it had been intended to and will continue to be "in the black" so to speak as it relies upon those retained income assets that had been building up over the past thirty years. Now you can join the liar's club and tell us all how the Trust Fund is only an inter-governmental transfer of funds which will have to be terminated because all the assets were spent.
If it's not clear enough, your obfuscation is that you neglect to take into account the Trust Fund assets even though it is clearly spelled out in the FICA legislation and well understood by all participants in the debate. Granted that some don't like the idea of having to honor the special Treasury notes that represent the asset value of the Trust Fund.
#35 Posted by Jack, CJR on Wed 1 Sep 2010 at 11:56 PM
Trust Fund assets are projected to be exhausted by 2037, according to the 2010 Social Security Trust Fund report. Someone 18 years right now can expect therefore to see a shortfall kick in by age 45. The same report estimates Social Security's unfunded obligations - the amount that would have to be set aside right now such that the principal and interest would cover projected shortfalls for the next 75 years or so - is $5.4 trillion. There is little doubt that starting in a few years Social Security will have to start drawing on general funds to meet its obligations. There can also be little doubt, if you do some math, that the next generations will (a) pay higher premiums, or hidden premiums in the form of higher general taxes, for (b) lower benefits than present recipients receive.
The only difference between a Bernie Madoff scheme and Social Security is transparency. The long-term Social Security problem - we won't even go into Medicare here, except to note that it is also eating our childrens' futures - is the reason we have these entitlement-reform commissions.
Simpson was only expressing legitimate concerns, but CJR got its knickers in a twist because he did so. In our media-political echo chamber, you can have the actual morals of a clam, as long as you have the manners of an ambassador.
#36 Posted by Mark Richard, CJR on Thu 2 Sep 2010 at 12:56 PM
And regarding the 'liars club' comment, I believe one of the reasons people on the Left have been losing these debates is their touching belief that policy choices are a matter of 'truth' vs. 'lies', rather than different people having different values and priorities. I always thought liberal-minded people believed the world was complex, but apparently liberalism has devolved into a simpler-minded outlook.
#37 Posted by Mark Richard, CJR on Thu 2 Sep 2010 at 01:00 PM
"Simpson was only expressing legitimate concerns..."
There's nothing legitimate about Simpson's ideological screed in regards to the Social Security program. Whether twenty year economic projections have any validity or not it would require minor adjustments to the FICA rates to over come the 2037 projections. Simpson's suggestions, and he only parrots his extraordinarily wealthy patrons, would be analogous to killilng the patient with the cure.
Reductions in benefits, prolonging full beneficiary age, etc. are attempts to weaken the program in the eyes of the people who most rely upon Social Security as a significant part of their peraonal retirement funds.
The lie is not in regards to the ideology of any argument. The lies are within the arguments used and the spurious information and conclusions used to promote those ideological arguments. It has nothing to do with left or right wing politics. That's another lie. It has to do with the country honoring its committments to its own citizens. Working Americans at all points in a political continuum benefit from the Social Security system and well meaning Americans are intent to keep it that way.
#38 Posted by Jack, CJR on Thu 2 Sep 2010 at 05:18 PM
"Whether twenty year economic projections have any validity or not . . . " Those projections come from Social Security itself, my friend. Now you concede that "minor" adjustments to FICA rates are not out of the question. What is considered "minor" is a subjective value judgment. Far-sighted policy makers don't want History to report that they kept their heads in the sand. 'The lie' is simply disagreement with you, a common perception of the ideologically zealous - I haven't seen a qualitative disagreement out of you yet, just emotive language that cannot distinguish between 'lies' and 'disagreeing with Jack'. You keep referring to my 'spurious information'. Careful readers will note that no actual examples have been presented, just assertions.
#39 Posted by Mark Richard, CJR on Fri 3 Sep 2010 at 12:37 PM
"My mother still works (at 79), her job (delivering Meals-on-Wheels types of lunches to elderly shut-ins) is taxed at the 7.65% rate), and her Social Security payments, which are supposed to have been linked to her lifetime payments, are reduced according to how much she earns. No private retirement fund would do that."
This statement is absolutely UNTRUE. Social Security benefits are NOT reduced by earnings after age 65. His mother probably does pay a Medicare Part A tax and Social Security tax on any earnings above her Social Security, and if her earnings are high enough (unlikely for this "job") a portion of her Social Security benefits may be taxed.
#40 Posted by Bonnie Burns, CJR on Wed 6 Oct 2010 at 01:50 PM