One of the tactics she discussed was a postponement and redesign of sequestration, a new automatic debt-reduction plan “if Congress does not act in six months.” That plan, she wrote, “could look a lot like the recommendations of Obama’s independent fiscal commission.” That’s the Simpson-Bowles Commission, and the report of its chairmen, Republican Alan Simpson and Democrat Erskine Bowles, called for major changes to Social Security. Reporters, like Halperin, need to ask the president about that next time they get the chance, and keep asking until the get some answers that mean something.
Related stories:
What a higher Retirement Age really means
More Words of Wisdom from Alan Simpson
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And nailing Obama (and the other candidates) down on how he will protect social security is especially important considering the state of private pensions and insurance in a depressed capital gains society, is he going to cut the defined benefit when alternative benefits are being cut and/or are collapsing?
http://blogs.reuters.com/david-cay-johnston/2012/08/10/the-victims-of-low-interest-locusts/
http://blogs.reuters.com/david-cay-johnston/2012/08/31/why-zirp-may-mean-zip/
#1 Posted by Thimbles, CJR on Fri 28 Sep 2012 at 02:06 PM
As Duncan Black put it:
http://www.usatoday.com/news/opinion/forum/story/2012-09-17/social-security-cuts-broke/57801378/1
"We already have an excellent, if not especially generous, program in place. Workers contribute during their working lives in exchange for a promised benefit level during their retirement years. This program is called Social Security.
Instead of considering some exciting new program to try to encourage workers into saving more, another Rube Goldberg incentive contraption designed to nudge individual behavior in the right direction, we should increase the level of retirement benefits in the existing Social Security program."
#2 Posted by Thimbles, CJR on Fri 28 Sep 2012 at 02:10 PM
If Social Security is "social insurance" then why were payments into the system pointed to when the topic was Romney's 47%? I mean, if they are set aside benefits like the life insurance benefits set aside for me because of the premiums I pay, then they aren't supporting society in general, they are supporting me.
How can journalists suggest those who pay payroll taxes are carrying government and then turn right around and suggest that SS benefits are not government provided social supports but are earned? Either it's a contribution to the general pot in which case it is not "insurance" after all or it's not and no credit should be given for "carrying the load".
#3 Posted by Brian Dell, CJR on Sun 30 Sep 2012 at 02:16 PM
"If Social Security is "social insurance" then why were payments into the system pointed to when the topic was Romney's 47%? I mean, if they are set aside benefits like the life insurance benefits set aside for me because of the premiums I pay, then they aren't supporting society in general, they are supporting me."
Because, Brian, social security has been collecting funds in excess of benefits paid out to the entent that they have built up a 2 trillion dollar liability. That 2 trillion in excess revenue, to be redeemed at a later date, was spent, just as the moneies from any other bonds are spent, on the functions of government.
Until that promise to pay back that liability is kept, and there is a bipartisan consensus to avoid doing that, those revenues have not been used to support you or the program they were predicated on. They were used to offset the effect of large income and corporate tax cuts and unfunded obligations like open ended wars.
40% of government revenue - 880 billion
http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm
Is being used to support 20% of government spending - 720 billion.
http://www.cbpp.org/cms/index.cfm?fa=view&id=1258
And, as mentioned in the past, that's assuming the bipartisan consensus doesn't raise the retirement age and cut annual benefits which lowers the 47% ability to recoup their payments into the system since they have to retire earlier and die earlier than their upper percentage peers due to the physical costs of low paid labor.
So yeah, if you don't include the state and local tax burdens and you only account for the payroll tax, the 47% are still not by that definition a bunch of moochers who are taking from the system, thanks.
Hope that clears things up.
#4 Posted by Thimbles, CJR on Sun 30 Sep 2012 at 04:08 PM
Meanwhile, the thing an interested press needs to nail down is this:
http://digbysblog.blogspot.ca/2012/09/parsing-grand-bargain-promises.html
"But you had to know that I was going to look at what he said about deficits. Here's the main passage. It's very interesting. He promised not to cut the safety net in return for tax cuts...
There's a lot of wriggle room in there, and quite a few straw men, but if you read it literally, he specifically promised not to slash those programs in exchange for tax cuts. What he didn't do was promise not to cut those programs in exchange for tax hikes --- which is what the Democrats are seeking."
And tax increases were the only deal breakers the last time Obama put Social Security on the table.
This is a very broken dynamic. The neo-libs have become the debt collectors for the supply side state. When the "fiscal cliff" and debt ceiling negotiations start, the policy range is going to be from cutting entitlements and spending for tax cuts and cutting entitlements and spending for tax increases.
And the compromise will likely be cutting entitlements and spending for tax increases on the middle class and tax cuts for the wealthy.
And it will be presented as the only way or 'the country gets it!'
#5 Posted by Thimbles, CJR on Sun 30 Sep 2012 at 06:19 PM
Since everybody's going to be talking about the economic effects of "Oh noes! The tax cuts are going away! We have to make an agreement to cut social security!" fiscal cliff nonsense , I thought it might be nice to look at papers that detail the economic effects of social security.
And here was an interesting link with an interesting chart:
http://www.dailyyonder.com/economic-impact-social-security/2011/12/18/3649
(There's a danger that some folk are overestimating the effect of the tax hikes on rich people's and corporate income (corporate especially - they're sitting on 2 trillion. If there was an investment opportunity to lose, they wouldn't be) and underestimating the effect of social spending cuts)
It would be nice to see more studies and reporting like this so that people can measure the economic impact of these cuts which are being done to "save the economy" somehow.
#6 Posted by Thimbles, CJR on Mon 1 Oct 2012 at 02:53 PM
Actually, Thimbles, for the past couple of years the Social Security fund has not only not contributed to general revenues, it has drawn down general revenues.
Since the 2010 "Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010" FICA tax revenue has been insufficient to maintain Social Security's solvency without transfers from general revenues. These transfers have added to the general budget deficit like general program spending.
#7 Posted by Brian Dell, CJR on Tue 2 Oct 2012 at 08:00 AM
Let's nail down the facts:
http://www.ssa.gov/oact/TRSUM/index.html
"Social Security’s expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983, and the Trustees estimate that these expenditures will remain greater than non-interest income throughout the 75-year projection period. The deficit of non-interest income relative to expenditures was about $49 billion in 2010 and $45 billion in 2011, and the Trustees project that it will average about $66 billion between 2012 and 2018 before rising steeply as the economy slows after the recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers."
Okay, the program is taking monies from the trust fund at a rate of 50 to 100 billionish a year. Boy, that's going to take a whack out of the trust. How much you ask?
"After 2020, Treasury will redeem trust fund assets in amounts that exceed interest earnings until exhaustion of trust fund reserves in 2033, three years earlier than projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2086."
Until the 2 trillion is used up on the program's expenses, the program has not cost the government revenue, period. And of course while the trust is being redeemed, the program's expenses will come out of general revenues. That was part of the aggreement since Reagan and Greenspan forged it in the eighties.
Of course, what Obama and the democrats did in 2010 was a bit different:
"A temporary reduction in the Social Security payroll tax rate reduced payroll tax revenues by $103 billion in 2011 and by a projected $112 billion in 2012. The legislation establishing the payroll tax reduction also provided for transfers of revenues from the general fund to the trust funds in order to "replicate to the extent possible" payments that would have occurred if the payroll tax reduction had not been enacted. Those general fund reimbursements comprise about 15 percent of the program's non-interest income in 2011 and 2012."
That's stimulus, just like the Bush tax cuts were stimulus. I would sooner see that 100 billionish from the general fund going to rebuilding roads and putting people directly to work, but that can't be done because republicans. So that is better than nothing, though far from ideal - which sorta defines the Obama presidency for the libs, you know?
But since we're talking about deficit causers and such, why not wipe out those stupid Bush tax cuts? You want to plug holes in the deficit? Start there and work back towards the military, and then we can talk about starving grandma.
Speaking of which, want to read a hilarious report? Heritage put out a lovely list of 'myths' in 2001.
http://www.heritage.org/research/reports/2001/08/ten-deceptive-myths-about-social-security-the-budget-and
#8 Posted by Thimbles, CJR on Tue 2 Oct 2012 at 11:24 AM
Sigh.
http://krugman.blogs.nytimes.com/2012/10/02/bowlesing-toward-betrayal/
"Right after I warn about the risk that Democrats, including the president, might betray the mandate they seem likely to get for preserving the safety net, we learn that Senate leaders are at work on a plan based around, well, you guessed it...
Just to say, this would be politically stupid as well as a betrayal of the electorate. If you don’t think Republicans would turn around and accuse Democrats of cutting Social Security — probably even before the ink was dry — you’ve been living under a rock."
#9 Posted by Thimbles, CJR on Wed 3 Oct 2012 at 02:13 PM
a gallon of milk has doubled in price in the last four years and they give us a 1.5 percent COLA,,,,,,,,, Washington has no morals and no honor
#10 Posted by tom bowden, CJR on Mon 15 Oct 2012 at 12:18 PM