Salon.com > cutting social security

Elite conventional wisdom is losing on Social Security

Fri, 26 Apr 2013 15:00:00 +0000

In the past two weeks, two radically different proposals for the future of Social Security have provoked widespread discussion in the media.

One proposal was made by President Barack Obama, as part of his proposed budget. This called for using inflation adjustments to deprive the middle-class elderly of nearly 10 percent of their promised Social Security benefits if they lived to their 90s, while only the poor would be shielded from the cuts. Obama’s proposal was angrily denounced by progressives and conservatives alike.

The rival proposal came in a policy paper called “Expanded Social Security,” written by Steven Hill, Robert Hiltonsmith, Joshua Freedman and me, and published by the New America Foundation’s Economic Growth Program. Our plan called for a major expansion of Social Security benefits, on the grounds that Social Security is far more efficient and reliable than the other two “legs” of the retirement security “stool” — employer pensions (both defined-benefit pensions and 401Ks) and tax-deferred private savings accounts like IRAs.

Obama’s entitlement plan was four years in the making

Thu, 11 Apr 2013 16:12:00 +0000

While many Democrats are expressing shock and outrage that President Obama, a Democrat, would propose to cut Social Security, Medicare and Medicaid, the truth is they shouldn’t be surprised. Obama’s desire to make these cuts dates back at least four years – since before his presidency, even -- and has been largely in plain view. We just chose to willfully ignore it, and pretend it wasn’t true.

Obama didn’t talk about it when he first campaigned for the job -- if he had, he surely wouldn’t have won the Democratic nomination, and may not even have beaten John McCain, since not even Republican presidential candidates publicly campaign to weaken what their party calls “entitlements.” Everyone sensibly had assumed that no Democrat would want to weaken or reduce the crowning achievements of Democratic Presidents Franklin Roosevelt and Lyndon Johnson, not to mention of the Democratic Party itself. But immediately after getting elected, Barack Obama admitted he wanted to do just that.

Could Obama really learn something from Reagan?

Thu, 11 Apr 2013 13:18:00 +0000

Between 2005 and today, a series of elections took place that fully rejected the Republican economic worldview that says America must cut successful programs like Social Security. Yet, eight years after President Bush first proposed cutting Social Security, we have somehow arrived back where we started - only instead of a Republican president championing Social Security reductions it is a Democratic president.

This bizarre repetition of presidential history was the subject of Rachel Maddow's MSNBC interview last night of President Obama's top political consigliere David Axelrod. The discussion was significant for how Axelrod tried to avoid answering why, when it comes to Social Security, President Obama is now positioning himself to the right of Ronald Reagan. He is doing this by invoking deficits and debt as the reason to propose cutting Social Security, even though that program that has almost nothing to do with the national deficit and debt.

White House courts progressives on chained CPI

Wed, 10 Apr 2013 13:15:00 +0000

Even before the White House releases its budget today, the line item that's made the most waves is the inclusion of a switch to the so-called chained CPI, which would reduce benefits for Social Security recipients by changing the way inflation is calculated. This naturally touched off a firestorm on the left from many who say that, in addition to being bad policy, it's political suicide for a Democratic president to cut a social safety net program.

We've given plenty of space to the detractors, and on Tuesday, two senior White House officials laid out their case to Salon and a small group of other reporters in a background briefing. Here's what they're thinking:

First of all, the officials insisted, the White House will not go any further than what they're offering now. As they see it, they went halfway with their last offer to House Speaker John Boehner and the CPI switch, so now they're looking to see if anyone will meet them there. This way, if a grand bargain never materializes -- which they acknowledge is the most likely scenario -- it will be harder for Republicans to blame them for killing it.

Who’s winning the Democrats’ civil war?

Sat, 06 Apr 2013 11:00:00 +0000

When it comes to economic issues, Democrats are not a united party. There are economic liberals, in the vein of Elizabeth Warren, who believe that very rich people who lead a good life can afford to pay more in taxes to support basic services for struggling people, seniors, and others who are vulnerable. And then there are “pro-business” Democrats, or what might be called SPECs (Socially Progressive Economic Conservatives). These are the pro-fracking, self-described "entitlement reformers" -- like omnipresent former Gov. Ed Rendell -- who talk about the need to keep taxes low and make “bold” decisions like cutting the social safety net, in an effort to fix the debt, restore “balance” and "get serious."

How conservatives still run America, despite losing elections

Fri, 05 Apr 2013 19:30:00 +0000

There is more than may appear in President Obama’s plan to cut the social safety net in his new budget proposal. The offer, on the face of it, reflects a significant violation of a major liberal creed, discarding the strongest liberal political card and Obama’s peculiar negotiation style of making major concessions at the opening of a give-and-take session. But it also reflects the sad but true fact that the dynamics of American politics cannot be understood in terms of Democrats vs. Republicans. Party labels aside, the nation is still being ruled by what I call a majority “conservative party.”

If Democrats and Republicans were the true divide, the meager gun control measures recently introduced in the Senate would have the majority needed to pass. After all, there are 53 Democratic Senators (and two Independents who generally side with them). Moreover, this time, the threat of a GOP filibuster is not to blame. Yet the Democratic majority leader, Senator Harry Reid, removed the assault weapons ban from the draft bill because some 15 Democratic senators, in effect, supported the conservative pro-gun position, making up — with the Republican senators — that majority “conservative party.” Thanks to this party, the same legislative defeat is about to befall liberal proposals to curtail high-capacity magazines. This leaves only better background checks on the table, but these, too, will inevitably be rendered ineffective by the conservatives via the underhanded gutting of enforcement (more about this shortly).

Obama making historic mistake on Social Security

Fri, 05 Apr 2013 12:15:00 +0000

President Obama reportedly is unveiling a budget using the chained CPI inflation measure to cheat elderly Americans out of the benefits they were promised. In two previous posts I’ve explained the perversity of the current debate about Social Security. The tax-favored private components of America’s mixed private-public retirement system — programs like employer pensions, 401Ks and IRAs — are inefficient, volatile and subject to manipulation by overcompensated, fee-extracting money managers. In contrast, the Social Security program is simple and efficient, and has low overhead costs. And yet the bipartisan establishment, including many “progressive” Democrats as well as Republicans, wants to cut Social Security — the part that works — and expand tax-favored private savings, the inefficient, unstable and inequitable part.

Safety net cutters are seriously selfish

Wed, 03 Apr 2013 14:00:00 +0000

Nowhere is the gap between the needs of the majority and the preferences of the 1 percent greater than in public discussion of Social Security. The rules of the national debate rig the discussion in advance, to the detriment of most Americans and to the benefit of the rich and the financial industry.

The first rule of the rigged retirement security debate is that we, the people, and our elected representatives are allowed only to debate purely public retirement benefits, like Social Security and, for the poor, Supplemental Security Income. According to the rules of the game, we are not allowed to mention or criticize the oceans of money in tax-sheltered private savings accounts that disproportionately benefit the rich — nothing to see here, folks, move along!

The rigged rules of the Social Security debate, furthermore, do not allow any participant to suggest expanding rather than cutting public retirement benefits — why, that’s crazy talk! Only cutting Social Security or, at most, maintaining promised benefits will even be considered as policy options. At the same time, players in the Elite Entitlement Debate game are allowed, indeed, encouraged to propose further expansions in our already-enormous tax-favored private retirement savings programs like 401Ks and IRAs. Calling for combining cuts in Social Security with more tax giveaways for savings, mostly to the rich, proves that politicians are Very Serious People to their Wall Street donors and to the mainstream media pundits who lionize the conservative deficit hawks Alan Simpson and Erskine Bowles.

How Republicans really view Social Security

Mon, 18 Mar 2013 18:04:00 +0000

Democrats surprised or angered by President Obama’s apparent willingness to reduce Social Security benefits may wonder why his entreaty has elicited mostly a snooze from Republicans, who speak often of their interest in "entitlement reform." I worked on Capitol Hill as an economist for several Republican lawmakers, so let me explain.

The first point to consider is that in reality, Obama and his fellow Democrats would only be persuaded to sign off on changes to Social Security as a part of a grand bargain, in which the Republicans gave up something major in return, like significant additional tax revenues. While suggestions by House leadership this weekend that the party would never accept additional revenue under any circumstances is just posturing, in my view, it's obviously still something conservatives have little reflexive enthusiasm for, having just swallowed them in January.

Social security’s most media-friendly foe

Mon, 03 Dec 2012 12:00:00 +0000

For those familiar with Ayn Rand's writing, the question "Who is John Galt?" is succinct shorthand to summarize conservatives' ideological campaign against government. But to really appreciate how that crusade operates on a day-to-day basis in the most important political battles of the moment, the best question right now is, "Who is Maya MacGuineas?"

The incurious political press' answer to that query can be seen in a quick Google News search of her name. As you will see, she is one of the most oft-quoted, and therefore influential, "experts" in the so-called "fiscal cliff" negotiations. Most often, she is simply described by Washington reporters as the president of the "nonpartisan" Committee for a Responsible Federal Budget and, in that role, as the lead coordinator of the so-called "Fix the Debt" coalition.

Though words like "nonpartisan" are designed to cast both groups, and MacGuineas herself, as apolitical and ideologically dispassionate, the boards of both organizations (which you can see here and here) are teeming with business executives and lawmakers-turned-corporate lobbyists. That is, they are teeming with precisely the kind of hyperpartisan, ideologically driven Big Money interests that have a financial stake in balancing the budget in a way that at once prevents tax increases on the rich and cuts or privatizes social programs.